Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price. (b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy. (c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price. (d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties. (e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights). (f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party. (g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party. (h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement. (i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 3 contracts
Sources: Stock Purchase Agreement (Pinafore Holdings B.V.), Stock Purchase Agreement (Gates Global Inc.), Stock Purchase Agreement (Pinafore Holdings B.V.)
Limitations on Indemnification. (a) A Party may assert a claim for indemnification hereunder only to the extent the Indemnitee gives notice of such claim to the Indemnifying Party in accordance with Section 9.3 prior to the expiration of the applicable survival period with respect to the representation, warranty or covenant on which such claim is based, if any, set forth in Section 9.1.
(b) Notwithstanding the provisions any other provision of this ARTICLE X, Article IX:
(i) Except as provided in Section 9.4(b)(iii), in no Acquiror Indemnified event shall either Party shall be entitled to liable for indemnification pursuant to Section 10.2(a)(i9.2(a)(i), Section 9.2(a)(iv) or Section 9.2(b)(i) hereof (A) for any item or items arising out of the same facts, events or circumstances where the Indemnifiable Loss relating thereto is less than $100,000 and (B) in respect of each individual item where the Indemnifiable Loss relating thereto is equal to or greater than $100,000, unless and until the amount aggregate of all Indemnifiable Losses which are incurred or suffered by the Buyer Indemnitees or the Seller Indemnitees, respectively, exceeds 2% of the Purchase Price, in which case the Buyer Indemnitees or the Seller Indemnitees, as applicable, shall be entitled, subject to Section 9.4(b)(ii), to indemnification for (x) 50% of all such Acquiror Indemnified Party that are Indemnifiable Losses up to 2% of the subject Purchase Price and (y) all such Indemnifiable Losses in excess of 2% of the Purchase Price. All Indemnifiable Losses arising under Section 9.2(a)(iv) shall be deemed to be a claim single item for purposes of the foregoing.
(or any series of related claimsii) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party Except as provided in Section 9.4(b)(iii), neither Seller nor Buyer shall only be entitled required to make payments for indemnification pursuant to Section 10.2(a)(i9.2(a)(i) to the extent the or Section 9.2(b)(i), respectively, in an aggregate amount in excess of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(itwelve and one-half percent (12.5%) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(biii) Notwithstanding the provisions of The limitations specified in Section 10.4(a), (i9.4(b)(i) the De Minimus Amount and the Indemnification Deductible Section 9.4(b)(ii) shall not apply with respect to Indemnifiable Losses relating to breaches arising out of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations and warranties in Section 5.1, 5.2, 5.8, 5.13, 5.17, 6.1, 6.2, or 6.5, but in no case shall either Seller or Buyer be required to make payments for indemnification pursuant to Section 9.2(a)(i) or Section 9.2(b)(i), respectively, in an aggregate amount in excess of one hundred percent (100%) of the Purchase Price.
(c) Notwithstanding anything contained in this Agreement to the contrary, except for the representations and warranties expressly contained in Article V and the Seller Disclosure Schedules, neither Seller nor any other Person is making any other express or implied representation or warranty of any kind or nature whatsoever (including with respect to Seller, the Business, the Purchased Assets, the Assumed Obligations or the transactions contemplated by this Agreement), and Seller hereby disclaims any other representations or warranties, whether made by such Party or its Affiliates, officers, directors, employees, agents, or representatives, including the implied warranty of merchantability and any implied warranty of fitness for a particular purpose.
(d) In the event that Buyer proceeds to the Closing notwithstanding written notice from Seller prior to the Closing that any breach by Seller of any representation or warranty in this Agreement, individually or in the aggregate with any other breaches of Seller’s representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “constitutes a Material Adverse Effect” contained in , no Buyer Indemnitees shall have any claim or recourse against Seller or any of its Affiliates with respect to such representations and warrantiesbreach, under this Article IX or otherwise.
(e) No Indemnified Party will be entitled In addition to the other limitations set forth in this Article IX, with respect to any claim for indemnification regarding any breach of any representation and warranty set forth in Section 5.12: (i) to the extent applicable, Seller’s indemnification obligation shall be limited to the cost of the least restrictive standard or remedy acceptable to each applicable Governmental Entity under applicable Environmental Law (including engineering or institutional controls) based on the industrial use of the relevant facility or property, proximity of commercial and residential areas, and all other relevant factors; provided, that the use of such standards or engineering or institutional controls does not materially interfere with operations at the affected facility and (ii) if any Losses contamination at any Real Property that a court of competent jurisdiction has determined is subject to indemnity by final judgment Seller is exacerbated due to have resulted from the bad faithnegligence, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, Buyer after the Closing Date, to the extent such exacerbation increases the cost of the investigation or remediation of such contamination, Seller shall not be responsible for any Law or any practice of any Governmental Authority (including any such increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectcosts.
Appears in 3 contracts
Sources: Asset Purchase Agreement (Algonquin Power & Utilities Corp.), Asset Purchase Agreement (Atmos Energy Corp), Asset Purchase Agreement (Atmos Energy Corp)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror No amount shall be payable to an Indemnified Party in satisfaction of any claim for indemnification pursuant to Section 13.1(a) or 13.2(a), as applicable, for which the aggregate amount of Losses of the Indemnified Party arising therefrom, together with all related claims, is less than $50,000; provided, that the limitation set forth in this Section 13.6(a) shall not apply unless and until the aggregate amount of all Losses of the Indemnified Party resulting from, arising out of or relating to breaches of representations and warranties contained in this Agreement exceeds the Deductible Amount.
(b) No claim may be made by an Indemnified Party against an Indemnifying Party for indemnification pursuant to Section 13.1(a) or Section 13.2(a), as applicable, unless and until the Indemnified Party has sustained aggregate Losses for which it is entitled to indemnification pursuant to Section 10.2(a)(i13.1(a) unless and until or Section 13.2(a), as applicable, in excess of $14,000,000 in the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 aggregate (the “De Minimus Deductible Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i)exceeds the Deductible Amount, (iv)provided, (v) and (vii) exceed $35,500,000 (however, that the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Deductible Amount and the Indemnification Deductible shall not apply with respect to any Losses resulting from, arising out of or relating to breaches of the representations and warranties set forth in Company Seller Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap Buyer Fundamental Representations, and none of such Losses shall not apply with respect to Losses relating to indemnification count towards the satisfaction of the Deductible Amount. The maximum aggregate recovery of the Indemnified Parties from the Indemnifying Parties pursuant to Section 7.4(a13.1(a) or Section 13.2(a), Section 10.2(a)(iias applicable, shall not exceed an amount equal to $140,000,000 the (“Cap”), (iii), (vi), (viii) or (ix) or except with respect to breaches of the representations and warranties set forth in Company Seller Fundamental Representations or Buyer Fundamental Representations, which are subject to Section 3.15 13.6(c).
(Taxes); (iiic) no Acquiror The maximum aggregate liability or recovery of all Buyer Indemnified Party shall be entitled to indemnification Parties from all Seller Indemnifying Parties under this Article 13 or otherwise pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000this Agreement, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party including for Fraud, shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds not exceed an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred Purchase Price actually received by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent Sellers. The maximum aggregate liability or recovery of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified from all Buyer Indemnifying Parties are entitled to indemnification under this Article 13 or otherwise pursuant to Section 10.2(b) exceeds the Indemnification Deductiblethis Agreement, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amountincluding for Fraud, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the an amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification equal to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer Final Purchase Price actually received by such Indemnified Parties in respect of such Losses, in each case net of costs the Sellers and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties the Sellers shall use commercially reasonable efforts to mitigate all have no indemnification for Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that Article 13 by any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by if such Indemnified Party Liabilities are taken into account in the calculation of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) Net Working Capital. No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to be indemnified, paid or reimbursed more than once for the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementsame Losses.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 3 contracts
Sources: Asset Purchase Agreement (DISH Network CORP), Asset Purchase Agreement (SPRINT Corp), Asset Purchase Agreement (T-Mobile US, Inc.)
Limitations on Indemnification. (a) Notwithstanding Except in the provisions case of this ARTICLE Xfraud or intentional misrepresentation, (i) no Acquiror the Indemnified Party shall be entitled to indemnification Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 10.2(a)(i8.2(a)(i) unless and until the amount of Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $1,500,000 in Losses incurred by such Acquiror Indemnified Party that are in the subject of a claim (or any series of related claims) exceeds $50,000 aggregate (the “De Minimus Deductible Amount”) and such Acquiror ), in which case the Indemnified Party Parties shall only be entitled to indemnification pursuant recover only those Losses in excess of the Deductible Amount that are paid, incurred, suffered or sustained by the Indemnified Parties as a group.
(b) Subject to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”8.3(c), and then only to except in the extent case of such excessfraud or intentional misrepresentation, (iii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(iCompany Indemnitors’ indemnity obligations for Losses under Sections 8.1(a)(i)-(vi), (ivviii)-(x) will be limited, in the aggregate, to an amount equal to the Escrow Amount, plus any interest earned thereon, less any amounts previously paid out of the Escrow Fund to satisfy the Losses claimed under Sections 8.1(a)(i)-(vi), (vviii)-(x) (and (viifor a particular Company Indemnitor, to its Pro Rata Portion thereof) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed For the Purchase Price.
(b) Notwithstanding the provisions avoidance of Section 10.4(a)doubt, (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches even after the expiration of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyEscrow Period.
(c) Notwithstanding Subject to Section 8.3(c) and except in the provisions case of this ARTICLE Xfraud or intentional misrepresentation, the Indemnified Parties’ sole and exclusive sources of recovery for indemnification claims under Section 8.2(a)(i) shall be recourse against (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are cash held in the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess Escrow Fund and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceR&W Policy.
(d) For purposes Subject to the limitations set forth in Section 8.3, the Indemnified Parties shall (i) be entitled to bring indemnification claims directly against the Company Stockholders in their roles as Company Indemnitors and (ii) be permitted to recover Losses directly from the Company Stockholders for indemnification claims pursuant to Sections 8.2(a)(ii) through 8.2(a)(x), and Section 8.2(a)(i) only with respect to claims for fraud or intentional misrepresentation, if and only to the extent that (x) the Escrow Fund is no longer available and (y) such claim has not been satisfied from the R&W Policy (after compliance with Section 8.3(f)), it being agreed that the Indemnified Parties shall look first to the Escrow Fund (to the extent that the R&W Policy does not cover the Loss in accordance with its terms, including because the retention amount has not been satisfied) and then to the R&W Policy; provided, that in each case of determining whether a breach clause (i) and (ii), if the subject matter of such indemnification claim is expressly excluded from coverage pursuant to and as set forth in the R&W Policy, the Indemnified Parties shall have no obligation to look to the R&W Policy for recovery of Losses but rather shall look first to the Escrow Fund and thereafter directly to the Company Indemnitors for recovery of Losses to the extent otherwise permitted under this Article VIII. In no event shall the liability of any of Company Indemnitor for any indemnification claim under Section 8.2(a) exceed the representations or warranties of Seller or Merger Consideration actually received by such Company has occurred and, if so, for purposes of calculating Indemnitor (including any funds from the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or EventsEscrow Fund), unless such indemnity claim is being made in respect of fraud and such Company Indemnitor committed such fraud (in which event there shall be read without giving effect no limitation on the liability of such Company Indemnitor hereunder or under applicable Law except to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesthe extent imposed under applicable Law).
(e) No Any amount of Losses will be calculated: (i) without regard to any punitive, exemplary, special, incidental, or consequential damages unless (x) any such punitive, exemplary, special, incidental, or consequential damages are actually awarded to a third party (provided that all such anticipated Losses may be preliminarily included by an Indemnified Party will be entitled to indemnification in an Indemnification Claim Notice), or (y) in the case of special, incidental or consequential damages only, any such special or consequential damages would have been reasonably foreseeable; (ii) such that costs and expenses incurred in investigating, defending or resolving any applicable claim under this Article VIII shall constitute Losses if and solely to the extent that such underlying claim is indemnifiable hereunder; and (iii) with respect to Losses incurred in respect of any Losses that a court of competent jurisdiction has determined by final judgment representation in Section 3.7, only to have resulted from the bad faith, gross negligence or willful misconduct extent in excess of the party seeking indemnification (provided amount of such Taxes that were included in the bad faithEstimated Closing Statement, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior and excluding such Taxes to the extent such Taxes were included in the Post-Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Statement and actually reduced the Total Merger Consideration.
(f) Notwithstanding The amount of any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled Losses that are subject to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount Article VIII shall be calculated net of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer proceeds, indemnification payments or reimbursements actually received by such the Indemnified Parties from third parties (other than the Company Indemnitors) in respect of such Losses (net of any costs or expenses incurred in obtaining such insurance, indemnification or reimbursement, including any increases in insurance premiums or retro-premium adjustments resulting from such recovery). Except for claims under this Article VIII related to fraud or intentional misrepresentations, for all indemnification claims under Section 8.2(a)(i), (ii) and (ix), Parent agrees to first use commercially reasonable efforts to seek recovery under the R&W Policy before seeking indemnification directly from the Company Indemnitors for any Losses; provided further that the Indemnified Parties may provide the Stockholders’ Representative with notice of an indemnification claim at any time for purposes of tolling the expiration of rights to indemnification under Section 8.1. In the event that an insurance recovery is received by any Indemnified Party with respect to any Losses for which any such Person has been indemnified and which Losses such Person had received from the Company Indemnitors hereunder, in each case then a refund equal to the aggregate amount of the recovery (net of costs and expenses incurred by in recovering such Indemnified Parties or their Affiliates (including amounts, and net of any increase in premium resulting therefrominsurance premiums with respect to insurance policies other than the R&W Policy) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise payable in respect of (i) Employee Company Options held by Specified Optionholders shall be paid to the Surviving Corporation for further payment to such Specified Optionholders through the Surviving Corporation’s payroll processing system net of applicable Tax withholding and deductions and (ii) Company Capital Stock and Company Warrants shall be made to the Payment Agent for distribution to the applicable Company Indemnitors, in each case, in accordance with each such Company Indemnitor’s respective Pro Rata Portion. Nothing in this Agreement shall require Parent or any Losses. All Indemnified Parties shall use commercially reasonable efforts Party to mitigate all seek recovery of Losses under an insurance policy, except with respect to the R&W Policy as set forth in this Section 8.3(f).
(g) Any Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party Agreement shall be determined without duplication of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal recovery due to the amounts so recovered facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant or realized shall promptly be refunded agreement, or being indemnifiable pursuant to the Indemnifying Partymore than one clause of Section 8.2(a).
(h) No Indemnified Party Except for the representations and warranties contained in this Agreement (including the Company Disclosure Letter, schedules and exhibits to this Agreement), each of Parent and Merger Sub acknowledges that neither the Company nor any of its Affiliates, nor any other Person, made or shall be entitled deemed to recover have made (and Parent and Merger Sub have not relied on and shall not rely on) any amount relating representation or warranty to any matter arising under one provision Parent or Merger Sub, express or implied, at Law or in equity, on behalf of the Company. Any claims Parent or Merger Sub may have for breach of representation or warranty shall be based solely on the representations and warranties of the Company expressly set forth in this Agreement (including the Company Disclosure Letter, schedules and exhibits to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement) and the certificates and other documents contemplated hereby.
(i) Notwithstanding any other provision of this Agreement Agreement, the Company Indemnitors shall not have any liability or indemnification obligation for any Taxes of the Company or its Subsidiaries (i) resulting from any election made under Section 338 of the Code with respect to the contraryMerger, no Acquiror Indemnified Party shall be entitled (ii) resulting from any action taken by the Company at the direction of Parent on the Closing Date after the Closing except as specifically contemplated by this Agreement or (iii) the ability of Parent, the Surviving Corporation or any of their affiliates to indemnification under this ARTICLE X in respect of utilize any Losses which occur net operating losses, Tax credits, Tax basis, or are increased as a result other Tax attribute of the entry into force of, Company or its Subsidiaries in any change in, Tax period or portion thereof (including any Straddle Tax Period) beginning on or after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding A Party may assert a claim for indemnification pursuant to this Article X only to the provisions extent the Indemnitee gives a Notice of this ARTICLE XThird Party Claim or Notice of Direct Loss, as applicable, with respect to such claim, to the Indemnifying Party (i) no Acquiror Indemnified Party shall be entitled for claims pursuant to indemnification Section 10.2(a)(ii) or Section 10.2(b)(ii), prior to the expiration of the applicable time period set forth in Section 10.1; (ii) for claims pursuant to Section 10.2(a)(i) unless and until or Section 10.2(b)(i), within fifteen (15) months following the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim Closing Date; (or any series of related claimsiii) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification for claims pursuant to Section 10.2(a)(i10.2(a)(iv), within five years following the Closing Date; and (iv) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification claims pursuant to Section 10.2(a)(i10.2(a)(v) exceeds $3,550,000 (or Section 10.2(a)(vi), within three years following the “Indemnification Deductible”Closing Date. Any claim for indemnification by Buyer with respect to which a Notice of Third Party Claim or Notice of Direct Loss is received by Seller within the applicable time frame set forth in the foregoing sentence shall be deemed timely made regardless of whether Buyer has at such point begun to comply with its obligations pursuant to Section 10.2(c). Any claim for indemnification not made in accordance with Section 10.3 and the foregoing sentence by a Party on or prior to the applicable date set forth in Section 10.1 or this Section 10.4(a), and then only to the extent of such excessother Party’s indemnification obligations with respect thereto, (ii) in no event shall the aggregate amount to will be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) irrevocably and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceunconditionally released and waived.
(b) Notwithstanding the provisions any other provision of Section 10.4(a), this Article X: (i) the De Minimus Amount and the Indemnification Deductible shall Seller will not apply with respect to have any indemnification obligations for Indemnifiable Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(aunder Sections 10.2(a)(i), Section 10.2(a)(ii), (iii10.2(a)(iv), (vi10.2(a)(v), and 10.2(a)(vi) (viiiA) or for any individual item where the Loss relating thereto is less than $100,000 and (ixB) or to breaches in respect of each individual item where the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount Loss relating thereto is equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)or greater than $100,000, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until unless the aggregate amount of all such Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,0005,000,000, and then only to the extent of such excess; and (viii) in no event will the aggregate indemnification to be paid by Seller under Sections 10.2(a)(i), 10.2(a)(ii), 10.2(a)(iv), 10.2(a)(v), and 10.2(a)(vi) exceed 25% of the Purchase Price. Notwithstanding the foregoing, (x) the limitations set forth in Sections 10.4(b)(i) and 10.4(b)(ii) will not apply to claims asserted by Buyer for breaches of Sections 5.1, 5.2, 5.3(a), 5.7, 5.15, 5.16, and 5.17, (y) the aggregate indemnification to be paid by Seller under Section 10.2(a)(ii) with respect to breaches of Sections 5.7 and 5.17, will not exceed 50% of the Purchase Price, less any claim other indemnification payments made by Seller pursuant to Sections 10.2(a)(i) and 10.2(a)(ii), and (z) the aggregate indemnification to be paid by Seller under Section 10.2(a)(iv10.2(a)(ii) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall breaches of Sections 5.1, 5.2, 5.3(a), and 5.16, will not exceed the amount 100% of the deductible applicable Purchase Price, less any other indemnification payments made by Seller pursuant to such claim under the related Seller Insurance PolicySections 10.2(a)(i) and 10.2(a)(ii).
(c) Notwithstanding the provisions any other provision of this ARTICLE Article X, : (i) no Seller Indemnified Party shall be entitled Buyer will not have any indemnification obligations for Indemnifiable Losses under Sections 10.2(b)(i) and 10.2(b)(ii) (A) for any individual item where the Loss relating thereto is less than $100,000 and (B) in respect of each individual item where the Loss relating thereto is equal to indemnification pursuant to Section 10.2(b) or greater than $100,000, unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all such Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible$5,000,000, and then only to the extent of such excess excess; and (ii) in no event shall will the aggregate amount indemnification to be paid as indemnification pursuant to Section 10.2(bby Buyer under Sections 10.2(b)(i) and 10.2(b)(ii) exceed 25% of the Cap; provided that Purchase Price. Notwithstanding the De Minimus Amountforegoing, (x) the Indemnification Deductible limitations set forth in Sections 10.4(b)(i) and the Cap shall 10.4(b)(ii) will not apply to claims asserted by Seller for breaches of Sections 6.1, 6.2, 6.3(a), and 6.6, and (y) the aggregate indemnification to be paid by Buyer under Section 10.2(b)(ii) with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall Sections 6.1, 6.2, 6.3(a), and 6.6 will not exceed 100% of the Purchase Price, less any other indemnification payments made by Buyer pursuant to Sections 10.2(b)(i) and 10.2(b)(ii).
(d) For purposes No representation or warranty of determining whether either Party contained herein will be deemed untrue or incorrect, and such Party will not be deemed to have breached a breach representation, warranty, or covenant as a consequence of the existence of any fact, circumstance, action, or event that is permitted to be taken by such Party under the terms of the representations this Agreement, or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties that is disclosed in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes any Schedule, or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesExhibit hereto.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of anything contained in this Agreement to the contrary, no Acquiror Indemnified Party shall except for the representations and warranties contained in this Agreement, neither Seller nor any other Person is making any other express or implied representation or warranty with respect to Seller, the Purchased Assets, the Assumed Obligations or the transactions contemplated by this Agreement, and Seller disclaims any other representations or warranties, whether made by Seller or its Affiliates, officers, directors, employees, agents, or representatives, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY AND ANY IMPLIED WARRANTY OF FITNESS. Any claims Buyer may have for breach of representation or warranty must be entitled based solely on the representations and warranties of Seller set forth in this Agreement. In furtherance of the foregoing, except for the representations and warranties contained in this Agreement, Buyer acknowledges and agrees that none of Seller, any of its Affiliates or any other Person will have or be subject to indemnification under this ARTICLE X for any liability to Buyer or any other Person for, and Seller hereby disclaims all liability and responsibility for, any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (iorally or in writing) to Buyer or any Losses of Buyer’s Representatives, including any confidential memoranda distributed on behalf of Seller relating to the extent such Losses are reflected Purchased Assets or the Assumed Obligations or other publications or data room information provided to Buyer or Buyer’s Representatives, or any other document or information in the Closing Date Working Capital Statement any form provided to Buyer or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or Buyer’s Representatives in connection with the incurrence sale of the Losses for which indemnity is soughtPurchased Assets, (ii) the amount assumption of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Lossesthe Assumed Obligations, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates the transactions contemplated hereby (including any increase opinion, information, projection, or advice that may have been or may be provided to Buyer or Buyer’s Representatives by Seller or any of Seller’s Representatives). BUYER HEREBY ACKNOWLEDGES THAT, EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN ARTICLE V, THE PURCHASED ASSETS ARE BEING PURCHASED ON AN “AS IS, WHERE IS” BASIS, WITH ALL FAULTS. Notwithstanding the foregoing, nothing contained in premium resulting therefromthis Section 10.4(e) and (iii) shall limit in any other amounts actually received from a third party pursuant respect any remedy to indemnification, contribution or otherwise which any Party may be entitled in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision fraudulent breach of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in fraud by the event of an Acquiror Indemnified other Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Sources: Asset Sale Agreement (ITC Holdings Corp.), Asset Sale Agreement (Interstate Power & Light Co)
Limitations on Indemnification. (a) Notwithstanding anything herein to the provisions contrary, the indemnification obligations of this ARTICLE X, the Parties shall be limited as follows:
(i) no Acquiror Indemnified Party an indemnifying party shall not have any Liability under, nor shall an indemnified party be entitled to indemnification pursuant to to, Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii10.2(b)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror indemnified parties and indemnifiable hereunder exceeds, on a cumulative basis, an amount equal to 0.75% of the Purchase Price (the “Basket”) and, in such event, the indemnifying party shall be required to pay the entire amount of all such Losses including the Basket; provided, however, that the limitation set forth in this Section 10.4(a)(i) shall not apply to Losses resulting from (A) a breach of any Fundamental Representation, (B) Knowing Breaches, (C) Seller Fraud, (D) Purchaser Knowing Breaches or (E) Purchaser Fraud;
(ii) the amount that the Purchaser Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) may recover with respect to any claim and all Losses pursuant to Sections 10.2(a)(i) and 10.2(a)(vi) is and shall be limited, in the aggregate, to the lesser of (x) the amount of such Loss and (y) the amount then remaining in the Indemnity Escrow Account; provided, however, that the limitation set forth in this Section 10.4(a)(ii) shall not apply to Losses resulting from (A) a breach of any Fundamental Representation, (B) Knowing Breaches, (C) Seller Fraud, or (D) a breach of the Specified IP Representation;
(iii) the amount that the Purchaser Indemnified Parties may recover with respect to any and all Losses pursuant to the Specified IP Representation is and shall be limited, in the aggregate, to the lesser of (x) the amount of such Loss and (y) the amount (A) if prior to the General Survival Date, then remaining in the Indemnity Escrow Account or (B) if after the General Survival Date, equal to (1) the sum of the original amount of the Indemnity Escrow Account less the aggregate amount of any other Losses previously paid to any Purchaser Indemnified Party (including any amounts distributed to any Purchaser Indemnified Party from the Indemnity Escrow Account); provided, however, that the limitation set forth in this Section 10.4(a)(iii) shall not apply to Losses resulting from (A) Knowing Breaches or (B) Seller Fraud; and
(iv) the amount that the Seller Indemnified Parties may recover with respect to all Losses pursuant to Section 10.2(a)(iv10.2(b)(i) shall be limited, in the aggregate, to the lesser of (x) the amount of such Loss and (y) the sum of the original amount of the Indemnity Escrow Account less the amount of any other Losses previously paid to any Seller Indemnified Party; provided, however, that is covered by the limitation set forth in this Section 10.4(a)(iii) shall not apply to Losses resulting from (A) a Seller Insurance Policybreach of any Fundamental Representation, Seller’s indemnification obligation (B) Purchaser Knowing Breaches, or (C) Purchaser Fraud.
(b) Notwithstanding anything herein to the contrary, the amount that the Purchaser Indemnified Parties may recover with respect to such claim any and all Losses pursuant to Section 10.2(a) is and shall not exceed be limited, in the aggregate, to the lesser of (x) the amount of such Loss and (y) the deductible applicable Final Purchase Price; provided, however, that the limitation set forth in this Section 10.4(b) shall not apply to Losses resulting from Seller Fraud. Notwithstanding anything herein to the contrary, the amount that the Seller Indemnified Parties may recover with respect to any and all Losses pursuant to Section 10.2(b) is and shall be limited, in the aggregate, to the lesser of (x) the amount of such claim under Loss and (y) the related Seller Insurance PolicyFinal Purchase Price; provided, however, that the limitation set forth in this Section 10.4(b) shall not apply to Losses resulting from Purchaser Fraud.
(c) Notwithstanding anything contained herein to the provisions of this ARTICLE Xcontrary, no Purchaser Indemnified Party shall have any right to indemnification under Section 10.2 with respect to (i) no Seller Indemnified Party shall be entitled any Losses or alleged Losses to indemnification the extent that such Losses are reflected in the Closing RMR as finally determined pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible3.3, and then only to the extent of such excess and or (ii) the failure of the representation and warranty set forth in no event shall the aggregate amount Section 5.16(a)(iii) to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible true and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricecorrect.
(d) For purposes of determining whether a Any claim by an indemnified party shall be limited such that no indemnified party shall be entitled to more than one recovery for any single Loss even though such Loss may have resulted from the breach of any more than one of the representations representations, warranties, covenants or warranties of agreements made by Seller or Company has occurred andPurchaser, if soas applicable, for purposes of calculating the amount of Losses relating in or pursuant to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes the Seller Documents or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesthe Purchaser Documents.
(e) No Indemnified Notwithstanding anything to the contrary contained in this Agreement, any Seller Document or any Purchaser Document or provided for under any applicable Law, no Party will shall be liable to any other Person for, nor shall any Party be entitled to indemnification recover or make a claim for, any amounts in respect of enhanced, punitive or exemplary damages (in each case, except to the extent payable in connection with a Third-Party Claim) and, other than in connection with Losses based upon, attributable to or resulting from a breach of any representation set forth in Article V or Article VI or any covenant set forth in Section 7.3 or Section 7.4, no loss of future income, revenue or profits, business interruption, loss of business reputation or opportunity, diminution in value, “multiple of profits,” “multiple of cash flow” or similar valuation methodology shall be used or taken into account in calculating the amount of any Losses, in each case, regardless of whether or not the possibility of such damages or Losses has been disclosed to the other party in advance or could have been reasonably foreseen by a party, it being understood that this Section 10.4(e) shall not create a presumption that any such methodologies or damages shall be used or taken in to account in connection with Losses based upon, attributable to or resulting from a breach of any representation, warranty, covenant or agreement in this Agreement, including any representation set forth in Article V or Article VI or any covenant set forth in Section 7.3 or Section 7.4.
(f) Notwithstanding anything to the contrary contained in this Agreement, no party shall be entitled to recover or make a claim for any amounts in respect to any Loss to the extent such Loss (i) is a claim, other than a Third-Party Claim, that such party believes may be asserted rather than a Loss, cause of action or claim that has, in fact, been filed of record or asserted against such party or paid or incurred by such party or would reasonably be expected to be filed, asserted, paid or incurred by such party, or (ii) would not have arisen but for, or has been increased or not reduced as a result of, any voluntary disclosure to a Governmental Authority by such party or its Representatives after the Closing.
(g) No indemnifying party shall be required to indemnify any indemnified party to the extent of any Losses Loss that a court of competent jurisdiction has shall have determined by in a final nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyindemnified party.
(h) No Indemnified Party shall be entitled to recover any For purposes of determining the amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount Losses with respect to such matter any breach by Seller of any representation, warranty and covenant made in or pursuant to that this Agreement or any Seller Document (but not for purposes of determining the existence or occurrence of such breach), any qualifications referencing the terms “materiality,” Material Adverse Effect or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party similar terms shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectdisregarded.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Interface Security Systems, L.L.C.), Asset Purchase Agreement (Interface Security Systems Holdings Inc)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror The Indemnified Party shall not be entitled to indemnification pursuant to Section 10.2(a)(i10.2(a) or Section 10.3(a), as applicable, unless and until the aggregate amount of all Losses incurred by such Acquiror in respect of which the Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only would otherwise be entitled to indemnification pursuant to Section 10.2(a)(i10.2(a) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to or Section 10.2(a)(i) 10.3(a), as applicable, exceeds $3,550,000 200,000 (the “Indemnification Deductible”), and then only to for the extent amount of such excessLosses in excess of the Deductible; provided, (ii) in no event shall however, that the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X Deductible shall not exceed apply to Losses arising out of or relating to any inaccuracy in or breach of any Fundamental Representation of the Purchase PriceIndemnifying Party.
(b) Notwithstanding The maximum aggregate amount of all Losses for which the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible Indemnifying Party shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification be liable pursuant to Section 7.4(a10.2(a) or Section 10.3(a), Section 10.2(a)(ii)as applicable, (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to not exceed the sum of (1i) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital $2,500,000 plus (2ii) $250,000, and then only to ten percent (10%) of the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification Earnout Payments actually earned pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant 2.4 (prior to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect giving effect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policyoffset rights set forth in this Agreement), Seller’s indemnification obligation with respect to unless such claim shall not exceed the amount Losses arise out of or result from any inaccuracy in or breach of any Fundamental Representation of the deductible applicable to such claim under the related Seller Insurance PolicyIndemnifying Party (in which case Section 10.4(c) shall apply).
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the The maximum aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled arising out of or relating to indemnification (i) any inaccuracy in or breach of any Fundamental Representation of the Indemnifying Party or (ii) pursuant to Section 10.2(b) exceeds the Indemnification Deductible), and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount10.2(c), the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i10.2(d), Section 10.2(e), Section 10.3(b), Section 10.3(c) or to breaches of Section 10.3(d), as applicable, for which the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X Indemnifying Party shall be liable shall not exceed the Purchase Price.
(d) For purposes Notwithstanding anything contained herein to the contrary, in no event shall an Indemnified Party be entitled to indemnification pursuant to this Article X for, any special, indirect, consequential, incidental or punitive damages (except to the extent any Indemnified Party is required to pay any punitive damages to a third party), lost profits or any diminution in value, or any damages based on a multiple, each of determining whether a breach of any which is hereby excluded by agreement of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesparties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision For purposes of this Agreement to the contraryArticle X, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the incurred by any Indemnified Parties are entitled to assert a claim for indemnification, the amount Party shall be calculated net of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief amounts actually realized recovered by any such Indemnified Parties arising out of or in connection Party from a third party with respect to such Losses, less the incurrence of the Losses for which indemnity is soughtreasonable costs, fees, reserves and expenses incurred to obtain such recovery; and (ii) the amount of any third party insurance proceeds from a third-party insurer actually received by such Indemnified Parties in Party with respect of to such LossesLosses under any applicable insurance policy, in each case net of costs excluding self-insurance arrangements and less any applicable and reasonable collection costs, fees, expenses incurred by such and reserves, deductibles, premium adjustments, retrospectively rated premiums and other similar amounts. If an Indemnified Parties Party receives any amounts under applicable insurance policies or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party alleged to be responsible for any Losses subsequent to receipt by an indemnification set-off or payment, then such Indemnified Party of shall promptly reimburse the Indemnifying Party for any indemnification set-off or payment hereunder made or expense incurred by such Indemnifying Party in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of connection with providing such indemnification payment equal up to the amounts so recovered amount retained or realized shall promptly be refunded to received by the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect net of any Losses which occur or are increased as a result of the entry into force ofapplicable and reasonable collection costs, or any change infees, after the Closing Dateexpenses and reserves, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief)deductibles, even if such entry into force or change has retroactive effectpremium adjustments, retrospectively rated premiums and other similar amounts.
Appears in 2 contracts
Sources: Securities Purchase Agreement (Communications Systems Inc), Securities Purchase Agreement (Lantronix Inc)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) Notwithstanding anything to the contrary contained herein, except as provided in this Section 5.6(c), no Acquiror BCC Indemnified Party shall be entitled to receive an indemnification pursuant payment with respect to any Action specified in this Section 10.2(a)(i) 5.6 unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (Action, or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred Actions made by the BCC Indemnified Party hereunder, equals or exceeds $50,000 (in which case all Acquiror of such Actions back to the first dollar will be recoverable).
(A) Subject to Section 5.6(c)(iii), the Parties agree that the right of any Indemnified Parties for which such Acquiror Indemnified Parties are entitled Party to indemnification undertake an Action pursuant to Section 10.2(a)(iSections 5.6(a) exceeds $3,550,000 and (b) shall survive the Closing until 11:59 p.m. in New York City on the date that is eighteen (18) months following the Closing Date (the “Indemnification DeductibleGeneral Expiration Date”); provided, and then only however, that if, at any time prior to the extent General Expiration Date, any Indemnified Party delivers a written notice in accordance with Section 5.6(a)(i) or Section 5.6(a)(ii) asserting in good faith an Action for recovery under Section 5.6(a) or (b), then the Action asserted in such notice shall survive the General Expiration Date until such time as such Action is fully and finally resolved; (B) notwithstanding anything to the contrary in Section 5.6 (including 5.6(c)(ii)(A) hereof), the Parties agree that the right of such excess, (ii) in no event shall the aggregate amount any Indemnified Party to be paid as indemnification undertake an Action pursuant to Section 10.2(a)(i), (iv), (vSections 5.6(a) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant (1) fraud, gross negligence, willful misconduct or intentional breach shall survive the Closing until the expiration of the statute of limitation applicable to Section 10.2(a)(ivthe subject matter thereof, (2) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to the Tax representations made by BCC and Bona Vida pursuant to the provisions of Sections 3.1(l) and 4.1(l) respectively, shall survive the Closing for a period of ninety (90) days following the expiration of the applicable statute of limitations period, and (3) the covenants and agreements of the Parties in this Agreement and the Transaction Documents which by their terms contemplate actions or impose obligations following the Closing shall survive the Closing and remain in full force and effect in accordance with their respective terms. To the extent that any covenants and agreements in this Agreement or the Transaction Documents contemplate performance prior to the Closing, such claim covenants and agreements shall terminate to such extent upon the Closing; provided, that the failure of such provisions to survive shall not exceed prevent an Indemnified Party from making any claim for a breach of such provisions that occurred prior to the amount of the deductible applicable to such claim under the related Seller Insurance PolicyClosing.
(ciii) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) anything in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party the maximum liability of any Bona Vida Shareholder for Damages shall be entitled to indemnification under this ARTICLE X for (i) any Losses equal to the extent such Losses are reflected in value of the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are Merger Consideration received by a third party from an Indemnified Partysuch Bona Vida Shareholder at the Effective Time.
(giv) Subject to Section 7.3, the Parties agree that the indemnification right set forth in this Agreement shall be the Parties sole and exclusive remedy with respect to the transactions contemplated by this Agreement, except for specific performance or other equitable remedy.
(v) If any Bona Vida Shareholder is liable for Damages hereunder, such Bona Vida Shareholder shall have the option of discharging such liability in cash, BCC Common Stock at a value of $0.1175 per share (subject to adjustment for stock splits, stock dividends, combinations or similar events), or a combination thereof. If BCC is liable for Damages hereunder, BCC shall discharge such liability in cash.
(vi) In determining the amount event of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationreclassification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is soughtrecapitalization, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Lossesstock split, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates stock dividend (including any increase in premium resulting therefromdividend or distribution of securities convertible into BCC Common Stock) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount subdivision with respect to such matter pursuant BCC Common Stock, any change or conversion of BCC Common Stock into other securities, any other dividend or distribution with respect to that the BCC Common Stock (or other provisions if a record date with respect to any of the foregoing should occur), after the date of this Agreement.
(i) Notwithstanding any other provision of this Agreement , appropriate and proportionate adjustments shall be made to the contrary, no Acquiror Indemnified Party shall number of shares of BCC Common Stock and the price per share thereof that may be entitled issuable for indemnification purposes pursuant to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectAgreement.
Appears in 2 contracts
Sources: Merger Agreement (Better Choice Co Inc.), Merger Agreement (Better Choice Co Inc.)
Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement (aexcept in the case of any Fraud Claim or Member Claim, to which none of the limitations described in this Section 15(f) Notwithstanding shall apply, and which shall be indemnified from the provisions of this ARTICLE X, first Dollar and without limitation by the Cap):
(i) no Acquiror Except as otherwise provided in the first sentence of this Section 15(f), the Seller Parties shall not be required to indemnify any Buyer Indemnified Party shall be entitled to indemnification for any Losses pursuant to Section 10.2(a)(i15(b) resulting from any breach or inaccuracy in any representation or warranty specified in Section 6 unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all such indemnifiable Losses resulting from any breach or inaccuracy in any representation or warranty specified in Section 6 sustained or incurred by all Acquiror the Buyer Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(iexceeds Fifty Thousand and No/100 Dollars ($50,000.00) exceeds $3,550,000 (the “Indemnification DeductibleThreshold Amount”), and then only to in such event, the extent Seller Parties shall indemnify all Buyer Indemnified Parties for all such Losses in excess of such excess, Twenty Five Thousand and No/100 Dollars ($25,000.00) the (“Deductible”).
(ii) Except as otherwise provided in no event shall the first sentence of this Section 15(f), the aggregate amount to be paid as indemnification pursuant to liability of the Seller Parties under Section 10.2(a)(i), 15(b) resulting from any breach or inaccuracy in any representation or warranty specified in Section 6 shall not exceed Two Million and No/100 Dollars (iv), (v$2,000,000.00) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X ; provided, however, that the Cap limitation shall not exceed the Purchase Priceapply to Losses sustained or incurred by any Buyer Indemnified Party based upon or with respect any breach or inaccuracy in any Core Representation.
(biii) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible Buyer shall not apply with respect be required to indemnify any Seller Indemnified Party for any Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), 15(c) resulting from any breach or inaccuracy in any representation or warranty specified in Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) 7 unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of all such indemnifiable Losses incurred by resulting from any breach or inaccuracy in any representation or warranty specified in Section 7 exceeds the Acquiror Threshold Amount, and in such event, Buyer shall indemnify all such Seller Indemnified Parties that are indemnifiable pursuant to for all such Losses in excess of the Deductible.
(iv) The aggregate liability of Buyer under Section 10.2(a)(vi15(c) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to resulting from any claim pursuant to breach or inaccuracy in any representation or warranty specified in Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim 7 shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyCap.
(cv) Notwithstanding the provisions of this ARTICLE X, (i) no The Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply be required to indemnify Buyer with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected specific amounts actually deducted in the Closing Date determination of Net Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartyAdjustment Amount.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Unit Purchase Agreement, Unit Purchase Agreement (Lionbridge Technologies Inc /De/)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE Article X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) (other than with respect to Seller Specified Representations) or pursuant to Section 10.2(a)(ii) for breach by Sellers of Section 7.4 or the last sentence of Section 5.7 (A) with respect to any claim or series of related claims unless and until the amount of all Losses incurred by such all Acquiror Indemnified Party that are the subject of a Parties with respect to such claim (or any series of related claims) exceeds claims exceed on a cumulative basis an amount equal to $50,000 250,000 (such amount, the “De Minimus Per-Claim Threshold Amount”) and such in which case the Acquiror Indemnified Party shall only Parties shall, subject to this Section 10.4(a), be entitled to indemnification pursuant to Section 10.2(a)(i) 10.2 with respect to the extent full amount of Losses relating to such claim or series of related claims, and (B) unless and until the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are would, but for this Section 10.4(a)(i), be entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(ii) for breach by Sellers of Section 7.4 or the last sentence of Section 5.7 exceeds $3,550,000 4,750,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), ) (iv), (vother than with respect to Seller Specified Representations) and (viipursuant to Section 10.2(a)(ii) for breach by Sellers of Section 7.4 or the last sentence of Section 5.7 exceed $35,500,000 37,875,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b10.2(b)(i) (other than with respect to Acquiror Specified Representations) or pursuant to Section 10.2(b)(ii) for breach by Acquiror of Section 7.4 (A) with respect to any claim or series of related claims unless and until the amount of all Losses incurred by such all Seller Indemnified Party that are the subject of Parties with respect to such claim exceeds or series of related claims exceed on a cumulative basis the De Minimus Per-Claim Threshold Amount and such in which case the Seller Indemnified Party shall only Parties shall, subject to this Section 10.4, be entitled to indemnification pursuant to Section 10.2(b) with respect to the extent full amount of Losses relating to such claim or series of related claims, and (B) unless and until the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are would, but for this Section 10.4(a)(iii), be entitled to indemnification pursuant to Section 10.2(b10.2(b)(i) and Section 10.2(b)(ii) for breach of Section 7.4 exceeds the Indemnification Deductible, and then only to the extent of such excess and excess, (iiiv) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b10.2(b)(i) (other than with respect to Seller Specified Representations) and pursuant to Section 10.2(b)(ii) for breach of Section 7.4 exceed the Cap; provided that , (v) notwithstanding anything to the De Minimus Amountcontrary in the Agreement, in no event shall the Indemnification Deductible and the Cap shall not apply with respect aggregate amount to Losses relating to be paid by Sellers as indemnification pursuant to Section 7.4(i7.2 and this Article X exceed an amount equal to the Purchase Price, and (vi) or in no event shall the aggregate amount to breaches be paid by Acquiror as indemnification pursuant to Section 7.2 and this Article X exceed an amount equal to the Purchase Price. Furthermore, the rights of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X Indemnified Parties to indemnification with respect to (x) the Section 10.2(a)(v) Indemnified Matters shall not exceed be limited as provided on Schedule 10.2(a)(v) and (y) the Purchase PriceSection 10.2(a)(vi) Indemnified Matters shall be limited as provided on Schedule 10.2(a)(vi).
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(eb) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final non-appealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, any Company or any of its Subsidiaries prior to the Closing shall not affect the Acquiror Indemnified Parties’ indemnification rights).
(fc) Notwithstanding any other provision of this Agreement to the contrary, (i) no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE Article X for (i) any Losses to the extent such Losses are reflected in the reduced Closing Date Working Capital Statement or increased Closing Date Indebtedness or Closing Date Company Transaction Expenses, in each case as finally determined pursuant Section 2.6 and (ii) punitive, consequential, indirect, incidental or special damages, no Indemnified Party shall be entitled to indemnification (x) under this Article X for (A) punitive damages (except to the extent any such damages are received by payable to a third party from in connection with a Third-Party Claim) or (B) lost profits, diminution in value or any “multiple of profits”, “multiple of cash flows” or similar measure (except to the extent payable to a third party in connection with a Third-Party Claim) or (y) with respect to a claim for Section 7.2 or Section 10.2(a)(i) (other than for breach of Section 3.11, Section 3.19 or any representation related to compliance with Laws set forth in the first seven sentences of Section 3.21), Section 10.2(a)(v), or Section 10.2(b)(i), for any special, consequential or incidental damages (and, for the avoidance of doubt, in no event shall the provisions of clause (x) insofar as it presents limitations on indemnification related to lost profits or diminution in value limit, directly or indirectly, Losses to which an Indemnified PartyParty is entitled to indemnification in accordance with this clause (y)); provided that for the avoidance of doubt, to the extent that any Seller covenants or agrees to be responsible for a Liability or Loss under this Agreement except to the extent that such Liability or Loss is included as a current liability or contra-asset is included in the calculation of Closing Date Working Capital, the reduction in indemnification rights of Acquiror Indemnified Parties pursuant to clause (i) of this Section 10.4(c) shall be without duplication to the current liability or contra-asset that reduced the Sellers’ responsibility for such Liability or Loss in the first instance (such that, by way of example, if a particular Liability for which Seller has agreed to be responsible pursuant to this Agreement was $300,000 and the current liability included in Closing Date Working Capital with respect thereto was $200,000, the $100,000 that Sellers agreed to be responsible for shall not be reduced by application of clause (i) of this Section 10.4(c)).
(gd) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationindemnification hereunder, the amount of any such Losses will be determined after deducting therefrom (i) the value amount of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is soughtsought that is actually realized by any such Indemnified Parties during the year in which the Loss occurred or the following year, (ii) the amount of any insurance proceeds from a third-party insurer (but not a captive insurance company) actually received by such Indemnified Parties in respect of such Losses, in each case net of direct costs and expenses (including direct collection expenses and any retention amounts) incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received recovered from a third party pursuant to indemnification, contribution indemnification or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable best efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE Article X. In the event that an Indemnified Party is entitled to any insurance, indemnification or other recovery from any third party (including, without limitation, as provided in the Lease pursuant to which the China Facility is leased), or to any Tax benefit or Relief, with respect to any Losses for which such Indemnified Party seeks indemnification, such Indemnified Party shall use reasonable best efforts, the cost and expenses of which shall be considered Losses hereunder, to obtain any such indemnification or recovery from such third party or Tax benefit or Relief, as the case may be. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the lesser of the amounts so recovered or realized and the amount of the indemnification payment previously received from the Indemnifying Party by the Indemnified Party, less all costs, fees and expenses incurred in seeking and collecting such recovery and realization, shall promptly be refunded to the Indemnifying Party. A Tax benefit or Relief shall be actually realized if and to the extent that the Indemnified Party’s cumulative Liability for Taxes through a taxable period (including in the taxable year in which the Loss occurred and the following taxable year) taking into account the relevant Loss is less than such Indemnified Party’s cumulative Liability for Taxes through such period calculated without regard to such Loss, taking into account such Loss as the last item of deduction or expense in any period.
(he) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such the same matter pursuant to that or other provisions of this Agreement. In addition, no Acquiror Indemnified Party shall be entitled to indemnification with regard to any item to the extent included in the Estimated Closing Statement or a Dispute Notice and subsequently compromised.
(f) Notwithstanding anything herein to the contrary, the Acquiror Indemnified Parties will not be entitled to indemnification with respect to any such claim to the extent that the discovery of such claim resulted from any invasive testing of soil, sediment or groundwater conditions at any Owned Real Property or Leased Real Property conducted by or on behalf of any Acquiror Indemnified Party, other than any such testing (i) required by any Governmental Authority or Environmental Laws; (ii) necessary or appropriate in connection with any bona fide construction, subsurface maintenance or repair activity at any Owned Real Property or Leased Real Property; (iii) necessary to respond to a Third Party Claim or facts that indicate a potentially significant risk to human health or the environment; or (iv) related to remediation or corrective action that had first commenced prior to the Closing Date
(g) In no event shall Acquiror or any of the Companies have any Liability whatsoever to any Seller (or any Affiliate of any Seller) for breaches of the representations, warranties, covenants or agreements of Sellers, and Sellers shall not (and shall cause their Affiliates not to), seek indemnification, contribution, reimbursement, subrogation or other similar rights of payment under common law from the Companies in respect of any representation, warranty, covenant or agreement made by Sellers pursuant to this Agreement.
(h) Notwithstanding anything to the contrary herein, nothing in this Section 10.4 shall operate to limit any claim by any Indemnified Party for fraud in connection with the transactions contemplated by this Agreement.
(i) No indemnity shall be provided under Section 10.2(a) for any Losses to the extent such Losses arise out of or are in connection with any transaction of any Company that occurs after the Closing on the Closing Date and is not in the ordinary course of business.
(j) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE Article X in respect to the extent of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, via final legislative action, including via the enactment into force of any Law statute or any practice of law or treaty by any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect; provided, this Section 10.4(j) shall not be read to exempt Sellers from liability for (i) any change, statement or other practice of any Governmental Authority, including the issuance of regulations, guidance or rulings, Governmental Order, ordinance; (ii) any change, statement or other decision of any court, (iii) any change targeted specifically at counteracting a Tax avoidance scheme, or (iv) any obligation to pay Taxes in connection with the transactions contemplated hereby.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Gates Global Inc.), Stock Purchase Agreement (Pinafore Holdings B.V.)
Limitations on Indemnification. (a) Notwithstanding anything to the provisions of this ARTICLE Xcontrary set forth herein, no Buyers’ Indemnified Party or Sellers’ Indemnified Party will be entitled to recover for Losses under Section 11.2(a) or 11.2(b), as applicable, (i) no Acquiror Indemnified Party shall that individually are in an amount of $25,000 or less (a “Minor Claim”), which Minor Claims will not be entitled to indemnification pursuant to Section 10.2(a)(iaggregated unless such Minor Claims are part of a substantially similar class of, or related, claims, or (ii) unless and until Losses arising out of an individual claim or a series of unrelated claims, aggregate to an amount in excess of $302,500 (the “Threshold Amount”), in which case, the Indemnifying Party will only be liable for the amount of Losses incurred sought by such Acquiror the Indemnified Party that are in excess of the subject of a claim Threshold Amount.
(or b) The Buyers’ Indemnified Parties first will exhaust the Escrow Account for all indemnifiable Losses under Section 11.2(a) before pursuing any series of related claims) exceeds $50,000 other remedy hereunder, second will recover from the R&W Policy (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent covered thereby) until the aggregate maximum amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (recoverable under the “Indemnification Deductible”)R&W Policy has been met, and then only third, solely to the extent of such excessthere are any remaining Losses, (ii) may proceed directly against the Sellers’ Parent. Notwithstanding anything herein to the contrary, in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i)liability of Sellers’ Parent, (iv)collectively, (v) and (vii) exceed $35,500,000 (for all claims by the “Cap”). Seller’s aggregate liability Buyers’ Indemnified Parties for indemnifiable Losses under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) Section 11.2(a)(i) exceed the De Minimus Amount Escrow Amount, and such amounts shall be recoverable solely from the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); Escrow Account, (ii) the Intermediate Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a)Specific Indemnities, Section 10.2(a)(ii)in the aggregate, (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds exceed an amount equal to $9,075,000, and (iii) Sections 11.2(a)(ii) through 11.2(a)(v), in the sum of aggregate (1) the reserve including, for the applicable workers compensation claim avoidance of doubt, any items set forth on Schedule 10.4(bin Annex 11.2(a)(v)), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until exceed the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable Purchase Price, as finally determined pursuant to Section 10.2(a)(vi2.3, actually received by Sellers; provided, however, that the foregoing limitations in clauses (i), (ii) exceeds $500,000, and then only to the extent of such excess; and (viiii) with respect do not apply to any a claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect for Fraud (but exclusively to such claim of Fraud and any claims substantially related to Fraud, and such foregoing limitations shall not exceed apply to other unrelated claims brought in the amount same Action), which claim for Fraud has been proven in a court of competent jurisdiction. In all cases, Buyers shall use commercially reasonable efforts to recover insurance proceeds for all Losses for which the deductible applicable to such claim insurer may be liable under the related Seller Insurance R&W Policy. Nothing herein is intended to limit or affect Buyers’ ability to make claims against or recover amounts under the R&W Policy.
(c) Notwithstanding The indemnification obligation of Buyers shall be capped at the provisions amount of this ARTICLE Xthe Purchase Price, as finally determined pursuant to Section 2.3, actually received by Sellers; provided, however, that the foregoing limitations do not apply to a claim for Fraud (ibut exclusively to such claim of Fraud and any claims substantially related to Fraud, and such foregoing limitations shall apply to other unrelated claims brought in the same Action), which claim for Fraud has been proven in a court of competent jurisdiction.
(d) no Seller Each of the representations, warranties, covenants, agreements or other obligations contained herein that contains any “Material Adverse Effect,” “material,” “in all material respects,” or similar materiality qualifications shall be read as though such qualifications were not contained therein for the purposes of determining whether or not an Indemnified Party shall be is entitled to indemnification pursuant to Section 10.2(b) unless and until this Article XI or the amount of Losses incurred by to which such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only may be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesArticle XI.
(e) No Notwithstanding anything to the contrary in this Agreement, any amounts payable pursuant to the indemnification obligations under this Agreement shall be paid without duplication and in no event shall (i) any Indemnifying Party be obligated to indemnify any Indemnified Party will be entitled with respect to indemnification any Losses with respect to any matter to the extent such matter was taken into account in the Adjustment Amount pursuant to Sections 2.2(b) and 2.3; or (ii) any Indemnified Party be indemnified under different provisions of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from this Agreement for the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)same Losses.
(f) Notwithstanding The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any other provision investigation made by or on behalf of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (iincluding by any of its representatives) or by reason of the fact that the Indemnified Party or any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement of its representatives knew or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent should have known that any such damages are received representation or warranty is, was or might be inaccurate or by a third party from an reason of the Indemnified Party’s waiver of any condition set forth in Article VIII or Article IX, as the case may be.
(g) In determining the amount Amounts in respect of any Losses for which payable by any Indemnifying Party pursuant to the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will indemnification obligations under this Agreement shall be determined after deducting therefrom reduced by (i) the value of any Tax benefit amounts actually received from third parties by or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence on behalf of the Losses for which indemnity is soughtIndemnified Party (including applicable insurance proceeds), (ii) the an amount of equal to any insurance proceeds from a third-party insurer actually Tax Benefit received by such the Indemnified Parties in respect Party or any of its Affiliates as a result of such LossesLosses or any of the circumstances giving rise thereto, in each case net of costs or prior to the taxable year in which indemnification for such Losses is paid by the Indemnifying Party (provided that this Section 11.4(g)(ii) shall only apply to the extent that a Loss is actually paid by an Indemnifying Party and expenses incurred shall exclude any Loss covered by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) the R&W Policy), and (iii) any other insurance proceeds (net of direct collection expenses) recovered by the Indemnified Party (such amounts actually received from a third party pursuant and benefits are collectively referred to indemnification, contribution or otherwise herein as “Indemnity Reduction Amounts”). If any Indemnified Party receives any Indemnity Reduction Amounts in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses a claim for which such Indemnified Parties are entitled or may be entitled to indemnification is provided under this ARTICLE X. In Agreement after the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized 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 subsequent shall promptly remit to receipt the Indemnifying Party an amount equal to the excess (if any) of (x) the amount theretofore paid by such Indemnified the Indemnifying Party of any indemnification payment hereunder in respect of such claim, less (y) the claims to which amount of the indemnity payment that would have been due if such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X Indemnity Reduction Amounts in respect thereof had been received before the indemnity payment was made. For the avoidance of doubt, it is not intended that any Losses which occur insurer be released from any obligation or are increased liability that it otherwise would have had under any of the Target Companies Insurance Policies set forth on Schedule 5.19(a) or under the R&W Policy as a result of the entry into force of, indemnification provisions of this Agreement or be entitled to any change in, after the Closing Date, rights of subrogation in relation to any Law or any practice party’s rights under this Agreement as a result of any Governmental Authority (including claims paid or payable by such insurer under any increase of the Target Companies Insurance Policies set forth on Schedule 5.19(a). For purposes of this Section 11.4(g), “Tax Benefit” shall mean any refund of Taxes paid or reduction in the amount of Taxes that otherwise would have been due and payable by the Indemnified Party, in each case determined at the Tax rates rate applicable to the character of income or any new Tax gain of the Indemnified Party offset by such Losses in the taxable year such income or any withdrawal of Relief), even if such entry into force or change has retroactive effectgain is offset.
Appears in 2 contracts
Sources: Purchase and Sale Agreement (Tredegar Corp), Purchase and Sale Agreement (Tredegar Corp)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, :
(i) no Acquiror Indemnified SRI Indemnifying Party shall be entitled liable in respect of any indemnification obligation for Damages under Section 7.1(i) (other than in respect of any failure of the representations in Section 3.4 or Section 3.5(u) to be true), unless and until (A) the aggregate amount of Damages of the Goodyear Indemnitees arising from any particular claim, together with all related claims, is in excess of $100,000 (the “De Minimis Amount”) and (B) the aggregate cumulative amount of such Damages of the Goodyear Indemnitees for which indemnification would be available but for this Section 7.3(a) exceeds $3,000,000 (such amount, the “Indemnity Deductible”), in which case the SRI Indemnifying Parties shall be liable for such Damages in excess of the Indemnity Deductible, subject to any limitations provided in this Section 7.3 and in other provisions of this Article VII, up to $45,000,000 (such amount, the “Indemnity Cap”);
(ii) no Goodyear Indemnifying Party shall be liable in respect of any indemnification obligation for Damages under Section 7.2(i) (other than in respect of any failure of the representations in Section 3.1 or Section 3.2(n) to be true), unless and until (A) the aggregate amount of Damages of the SRI Indemnitees arising from any particular claim, together with all related claims, is in excess of the De Minimis Amount and (B) the aggregate cumulative amount of such Damages of the SRI Indemnitees for which indemnification would be available but for this Section 7.3(a) exceeds the Indemnity Deductible, in which case the Goodyear Indemnifying Parties shall be liable for such Damages in excess of the Indemnity Deductible, subject to any limitations provided in this Section 7.3 and in other provisions of this Article VII, up to the Indemnity Cap; and
(iii) no Party shall have any liability under this Article VII for any special, exemplary or punitive damages; provided that the foregoing shall not limit the right of any Indemnitee to indemnification in accordance with this Agreement with respect to any component of any claim, settlement, award or judgment against such party by any unaffiliated third party.
(b) Any liability for any Damages shall be determined without duplication of recovery by reason of the state of facts giving rise to such Damages constituting a breach of more than one representation, warranty, covenant or agreement of this Agreement or any other Dissolution Document.
(c) The amount of any Damages for which indemnification is provided under this ARTICLE X for Section 7.1 or Section 7.2 shall be net of (i) any Losses to the extent actual Tax benefit realized by an Indemnitee on account of the incurrence, accrual or payment of such Losses are reflected Damages; provided, that in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining computing the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationTax benefit realized by an Indemnitee, the amount Indemnitee shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is soughtDamages, (ii) the amount any amounts recovered by an Indemnitee (net of any insurance proceeds from a third-party insurer actually received costs or expenses of investigation of the underlying claim and of collection) pursuant to any indemnification by such Indemnified Parties in respect of such Lossesor indemnification agreement with any Person (other than this Agreement), in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received by an insured Indemnitee from an insurance carrier, or paid by an insurance carrier on behalf of an insured Indemnitee (net of any costs or expenses of investigation of the underlying claim and of collection) received as an offset against such Damages (each source of recovery referred to in clauses (ii) and (iii), a third party “Collateral Source”). If the amount to be netted hereunder in connection with a Collateral Source from any payment required under Section 7.1 or Section 7.2 is received by an Indemnitee or any of its Affiliates after payment by the applicable Indemnifying Party of any amount otherwise required to be paid to an Indemnitee pursuant to indemnificationthis Article VII, contribution or otherwise such Indemnitee shall repay to the applicable Indemnifying Party, promptly after such receipt, any amount that the Indemnifying Party would not have had to pay pursuant to this Article VII had such receipt occurred at the time of such payment.
(d) The amount of any Damages for which indemnification is provided by SRI under Section 7.1 in respect of a breach of the representations and warranties made by SRI in Section 3.5 regarding NGY and the NGY Subsidiaries shall be reduced by twenty-five percent (25%) to reflect Goodyear’s twenty-five percent (25%) pre-closing interest in NGY; provided, that to the extent that SRI or any Losses. All Indemnified Parties of its Affiliates actually bears any costs and expenses of indemnifying the Goodyear Indemnitees for any such matters, then SRI shall use commercially reasonable efforts to mitigate all Losses for which provide Goodyear with a written invoice setting forth such Indemnified Parties are entitled costs and expenses actually borne by or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party on behalf of any indemnification payment hereunder SRI in respect of such matters as well as the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment costs and expenses for which Goodyear is responsible pursuant to this Section 7.3(d), and Goodyear shall pay to SRI an amount equal to the amounts so recovered or realized shall promptly be refunded portion of such costs and expenses for which Goodyear is responsible pursuant to the Indemnifying Partythis Section 7.3(d) within thirty (30) days following receipt of such written invoice.
(he) No Indemnified Party The amount of any Damages for which indemnification is provided by Goodyear under Section 7.2 in respect of a breach of the representations and warranties made by Goodyear in Section 3.2 regarding GDTNA, shall be entitled reduced by twenty-five percent (25%) to recover any amount relating to any matter arising under one provision of this Agreement reflect SRI’s twenty-five percent (25%) pre-closing interest in GDTNA; provided, that to the extent that Goodyear or any of its Affiliates actually bears any costs and expenses of indemnifying the SRI Indemnitees for any such Indemnified Party (matters, then Goodyear shall provide SRI with a written invoice setting forth such costs and expenses actually borne by or other Acquiror Indemnified Parties on behalf of Goodyear in respect of such matters as well as the event portion of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter costs and expenses for which SRI is responsible pursuant to that or other provisions this Section 7.3(e), and SRI shall pay to Goodyear an amount equal to the portion of such costs and expenses for which SRI is responsible pursuant to this AgreementSection 7.3(e) within thirty (30) days following receipt of such written invoice.
(if) Notwithstanding Each Indemnitee shall take commercially reasonable steps to mitigate any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect Damages as soon as reasonably practicable after such Indemnitee becomes aware of any Losses event which occur or are increased as a result of the entry into force ofdoes, or could reasonably be expected to, give rise to any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectDamages.
Appears in 2 contracts
Sources: Framework Agreement, Framework Agreement (Goodyear Tire & Rubber Co /Oh/)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled Fox’s obligation to indemnification indemnify Newco Indemnitees for Losses pursuant to Section 10.2(a)(i4.3(d)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the or Section 4.3(e) is subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred limitation that no indemnification shall be made by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply Fox with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a any claim (or including any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(viLosses) until the aggregate amount of all such Losses incurred by for which indemnification may be sought under Section 4.3(d)(i) and Section 4.3(e) exceeds $5,000,000 (the Acquiror Indemnified Parties “Newco Deductible”), at which point the Newco Indemnitees shall be entitled to indemnification only for those Losses in excess of the Newco Deductible; provided, however, that are indemnifiable only individual claims or a series of related claims involving Losses in excess of $100,000 shall be included in the Newco Deductible or be counted for determining the amount of Losses to be indemnified to the Newco Indemnitees. Notwithstanding the foregoing, in no event shall the obligation of Fox to indemnify Newco Indemnitees pursuant to Section 10.2(a)(vi4.3(d)(i) exceeds or Section 4.3(e) exceed, in the aggregate, $500,000250,000,000. For the avoidance of doubt, the limitations in this Section 4.5 shall not apply to any claims for indemnification pursuant to Section 4.3(a), Section 4.3(b), Section 4.3(c), Section 4.3(d)(ii) and then only Section 4.3(d)(iii). For the avoidance of doubt, nothing herein shall limit the ability of Fox to Convey A&S Assets to Ainge or Newco in respect of any alleged breach of any provision of the Merger Agreement (including, for the avoidance of doubt, Section 2.6(a), Section 2.6(b), Section 2.8(d) and Section 2.8(h) of the Merger Agreement).
(b) The obligation of the Newco Group to indemnify Fox Indemnitees for Losses pursuant to Section 4.2(d) is subject to the extent limitation that no indemnification shall be made by any member of such excess; and (vi) the Newco Group with respect to any claim (including any Losses) until the aggregate amount of all such Losses for which indemnification may be sought under Section 4.2(d) exceeds $5,000,000 (the “Fox Deductible”), at which point the Fox Indemnitees shall be entitled to indemnification only for those Losses in excess of the Fox Deductible; provided, however, that only individual claims or a series of related claims involving Losses in excess of $100,000 shall be included in the Fox Deductible or be counted for determining the amount of Losses to be indemnified to the Fox Indemnitees. Notwithstanding the foregoing, in no event shall the obligation of Ainge to indemnify Fox Indemnitees pursuant to Section 10.2(a)(iv4.2(d) that is covered by a Seller Insurance Policyexceed, Seller’s indemnification obligation with respect to such claim in the aggregate, $250,000,000. For the avoidance of doubt, the limitations in this Section 4.5 shall not exceed the amount of the deductible applicable apply to such claim under the related Seller Insurance Policyany claims for indemnification pursuant to Section 4.2(a), Section 4.2(b) or Section 4.2(c).
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party No Indemnitee shall be entitled to payment and indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply more than once with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches the same matters (including by being taken into account in the determination of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed Final Net Working Capital Amount and the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rightsA&S Business 2017 Adjusted EBITDA).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Separation and Distribution Agreement, Separation and Distribution Agreement (Altra Industrial Motion Corp.)
Limitations on Indemnification. (a) Notwithstanding Except with respect to breaches of the provisions ED&F Fundamental Representations and of this ARTICLE Xthe representations and warranties in Section 5.17 (Taxes), ED&F and Holdings shall not be required to indemnify or hold harmless the Parent Indemnified Parties for Losses under clauses (i), (iiv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to or (v) of Section 10.2(a)(i10.2(a) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all such Losses incurred by all Acquiror with respect to which a Claim Notice was delivered in accordance with Section 10.3 exceeds $7,000,000 (the “Basket Amount”), in which event ED&F and Holdings shall be obligated to indemnify the Parent Indemnified Parties for which such Acquiror all Losses in excess of the Basket Amount.
(b) Except with respect to breaches of the ED&F Fundamental Representations and of the representations and warranties in Section 5.17 (Taxes) and in Section 5.28 (Proxy Statement), ED&F and Holdings shall not be required to indemnify or hold harmless the Parent Indemnified Parties are entitled to indemnification pursuant to for Losses under Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed in excess of $35,500,000 30,000,000 (the “Cap”). Seller’s .
(c) ED&F and Holdings shall not be required to indemnify or hold harmless the Parent Indemnified Parties for any Losses arising or resulting from any breach of Section 5.28 (Proxy Statement) except to the extent such Losses arise in connection with a Third Party Claim.
(d) Notwithstanding anything in this Agreement to the contrary, neither ED&F nor Holdings shall have any liability under Section 10.2(a) for any individual item or series of related items where the Loss relating thereto is less than $75,000 and such items shall not be aggregated for purposes of Section 10.4(a); provided, however, that, solely for purposes of determining whether the amount of a Loss for a Tax indemnifiable under Section 10.2(a)(iii) is less than $75,000, no offset or reduction for any other Tax included in the determination of Merger Closing Date Net Indebtedness or Stock Sale Closing Date Net Indebtedness shall be taken into consideration.
(e) Notwithstanding anything in this Agreement to the contrary, except with respect to Losses resulting or arising from (i) ED&F Indemnifiable Taxes, (ii) breaches of the ED&F Fundamental Representations or the representations and warranties in Section 5.17 (Taxes) and (iii) the Designated Pre-Closing Activities, the aggregate liability of ED&F and Holdings for Losses under this ARTICLE X Section 10.2(a) shall not in any event exceed the Adjusted Stock Sale Purchase Price.
(bf) Notwithstanding anything in this Agreement to the provisions contrary, neither ED&F nor Holdings shall have any obligation to indemnify or hold harmless any Parent Indemnified Party with respect to any Losses resulting or arising from any breach of the representations and warranties contained in Section 10.4(a5.15 (Environmental Matters), any Additional Indemnification Matter or any claim relating to any environmental matters, Environmental Liabilities, Hazardous Substances or Environmental Laws to the extent any such Loss or claim relates to, arises out of or is triggered by any condition that is discovered or identified as a result of any environmental investigation, testing or sampling conducted by or on behalf of Parent after the Closing other than any such investigation, testing or sampling that is (i) required by a Governmental Authority (except to the De Minimus Amount extent such requirement results from a condition caused by the Parent after the Closing or results from the solicitation or encouragement of Parent or its Affiliates after the Closing) or (ii) required by a third party purchaser in connection with the sale of a terminal facility.
(g) For purposes of this ARTICLE X, the determination of (i) whether there has been a breach of a representation or warranty and the Indemnification Deductible (ii) Losses resulting or arising from such breach shall not apply with respect be made without regard to Losses relating any materiality qualification (including any reference to breaches of Business Material Adverse Effect or Parent Material Adverse Effect), except for such qualifications contained in the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(aSections 5.5(c), Section 10.2(a)(ii5.5(e), (iiithe first sentence of Section 5.6, and Sections 5.11(a), (vi5.11(c), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b5.11(f), to the extent such reserve is reflected in Final Net Working Capital plus (25.12(g) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy5.28.
(ch) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) anything in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror a Parent Indemnified Party’s right to commence any claim under clauses (iv) and (v) of Section 10.2(a) shall terminate on the date that is the second anniversary of the date of this Agreement, and neither ED&F nor Holdings shall have any obligation to indemnify or hold harmless any Parent Indemnified Party shall be entitled to indemnification under this ARTICLE X for clauses (iiv) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or and (iiv) punitive, consequential, indirect, incidental or special damages, of Section 10.2(a) unless and except to the extent any such damages are received by that a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity bona fide Claim Notice specifically relating thereto is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect delivered prior to such matter pursuant to that or other provisions of this Agreementdate in accordance with Section 10.3(a).
(i) Notwithstanding any other provision of anything in this Agreement to the contrary, no Acquiror neither ED&F nor Holdings shall have any obligation to indemnify or hold harmless any Parent Indemnified Party shall be entitled under Section 10.2(a)(v) to the extent the claim for indemnification under this ARTICLE X in respect of relates to any Losses which occur environmental matters, Environmental Liabilities, Hazardous Substances or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectEnvironmental Laws.
Appears in 2 contracts
Sources: Transaction Agreement (Shermen WSC Acquisition Corp), Transaction Agreement (Shermen WSC Acquisition Corp)
Limitations on Indemnification. 12.4.1. Except for claims for indemnification against Seller in respect of a breach by Seller of a covenant or obligation of Seller under Section 2, Section 3, Section 7, Section 8, Section 11, Section 12.2(c) or Section 14.1 of this Agreement or in respect of a breach by Seller of a representation or warranty of Seller under Section 5.10 or Section 5.27 of this Agreement:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party claim shall be entitled to made for indemnification against Seller pursuant to Section 10.2(a)(i) this Agreement unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses Damages incurred by all Acquiror the Buyer Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) Persons under this Agreement exceeds $3,550,000 500,000 (the “"Buyer Indemnification Deductible”), Threshold") and then Seller shall be liable for Damages only to the extent of such excessthe excess over the Buyer Indemnification Threshold; and
(b) the total Liability of Seller to Buyer under Section 12.2 hereof shall be limited (i) in respect of Damages incurred by Buyer which relate to the ownership or operation of any formerly owned Company Property, in the aggregate to $5 million; and (ii) in no event shall respect of all Damages incurred by Buyer, in the aggregate amount to be paid as indemnification pursuant to $15 million, which limit shall include the limit set forth in clause (i) of this Section 10.2(a)(i12.4.1(b), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b12.4.2. Except for claims for indemnification against Buyer under Section 12.3(b) Notwithstanding or under the provisions of Section 10.4(a)11 of this Agreement, (i) the De Minimus Amount and the Indemnification Deductible no claim shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to be made for indemnification against Buyer pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) this Agreement unless and until the aggregate amount of Losses Damages incurred by such Acquiror the Seller Indemnified Party that are the subject of a claim (or any series of related claims) Persons exceeds $250,000, 500,000 (the "Seller Indemnification Threshold") and then Buyer shall be liable for Damages only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are excess over the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyIndemnification Threshold.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Stock Purchase Agreement (WHX Corp), Stock Purchase Agreement (Worthington Industries Inc)
Limitations on Indemnification. (a) Notwithstanding Sections 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7 hereof, the provisions rights and obligations under this Article X of this ARTICLE Xthe JV Indemnitees, the AMD Indemnitees and the Fujitsu Indemnitees are subject to the following:
(i) no Acquiror Indemnified Party the JV Indemnitees, the AMD Indemnitees and the Fujitsu Indemnitees shall not be entitled to any recovery under Sections 10.2(a)(i), 10.3(a)(i) 10.6(a) or 10.7(a), unless the claim for indemnification is made within the time period of survival set forth in Section 10.1; provided, that if any claim for indemnification pursuant to this Agreement which relates to a representation or warranty is made prior to the time such representation or warranty terminates under Section 10.1, then such representation and warranty shall survive solely for purposes of such claim until such time as it has been finally resolved in accordance with the terms of this Agreement;
(ii) the JV Indemnitees shall not be entitled to any indemnification hereunder under Section 10.2(a)(i) unless and until the amount Losses that the JV Indemnitees are entitled to be indemnified for under Section 10.2(a)(i) of Losses incurred by such Acquiror Indemnified Party that are this Agreement and Section 9.2(a) of the subject of a claim (or any series of related claims) exceeds $50,000 AMD Asset Purchase Agreement exceed, in the aggregate, US$15 million (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification AMD Deductible”), in which event the JV Indemnitees shall be entitled to recover all such Losses, excluding Losses included in the determination of the AMD Deductible;
(iii) the JV Indemnitees shall not be entitled to any indemnification hereunder under Section 10.3(a)(i) unless and then only until the Losses that the JV Indemnitees are entitled to be indemnified for under such Section exceed, in the aggregate, US$15 million (the “Fujitsu Deductible”), in which event the JV Indemnitees shall be entitled to recover all such Losses, excluding Losses included in the determination of the Fujitsu Deductible;
(iv) a Fujitsu Indemnitee shall not be entitled to any indemnification under Section 10.6 unless (A) the Loss is the result of a Third Party Claim made or threatened directly against such Fujitsu Indemnitee, or (B) if clause (A) is not applicable, Fujitsu determines in good faith that the Losses that the Fujitsu Indemnitees are entitled to be indemnified for under Section 10.6 and Section 9.4 of the AMD Asset Purchase Agreement exceed, in the aggregate, US$100 million (the “AMD Threshold”), in which event the Fujitsu Indemnitees shall be entitled to recover all such Losses, including Losses included in the determination of the AMD Threshold;
(v) an AMD Indemnitee shall not be entitled to any indemnification under Section 10.7 unless (A) the Loss is the result of a Third Party Claim made or threatened directly against such AMD Indemnitee, or (B) if clause (A) is not applicable, AMD determines in good faith that the Losses that the AMD Indemnitees are entitled to be indemnified for under Section 10.7 exceed, in the aggregate, US$100 million (the “Fujitsu Threshold”), in which event the AMD Indemnitees shall be entitled to recover all such Losses, including Losses included in the determination of the Fujitsu Threshold; and
(vi) the aggregate maximum liability (A) of AMD to the extent JV Indemnitees and the Fujitsu Indemnitees, collectively, for Losses under Section 10.2(a)(i) and 10.6(a) of such excessthis Agreement together with Losses under Section 9.2(a) and Section 9.4(a) of the AMD Asset Purchase Agreement and (B) of Fujitsu to the JV Indemnitees and the AMD Indemnitees, collectively, for Losses under Section 10.3(a)(i) and Section 10.7(a), in the case of each of (A) and (B) shall not in any event exceed US$400 million.
(vii) if, based upon a substantially identical underlying factual basis, (iiA) an arbitrator, court, tribunal or other judicial authority determines in no event an enforceable award, judgment or decision that AMD or an Affiliate of AMD shall make payments to, or on behalf of, the Joint Venture, and to or on behalf of Fujitsu or an Affiliate of Fujitsu, in satisfaction of a breach of contract claim, indemnification claim, enforcement action or other legal or equitable claims of the Joint Venture and of Fujitsu or an Affiliate of Fujitsu (other than in each case, for indemnification of Fujitsu or an Affiliate of Fujitsu against a Third Party Claim), related to any Transaction Document or the transactions contemplated thereunder, and (B) AMD makes the payments in satisfaction of the claims of the Joint Venture, the amounts payable to, or on behalf of, Fujitsu or its Affiliate by AMD or its Affiliate shall be reduced by an amount equal to the product of (X) Fujitsu’s Membership Interest at the time of the claim of the Joint Venture multiplied by (Y) the aggregate amount paid by AMD to, or on behalf of, the Joint Venture, in satisfaction of the claim of the Joint Venture.
(viii) if, based upon a substantially identical underlying factual basis, (A) an arbitrator, court, tribunal or other judicial authority determines in an enforceable award, judgment or decision that Fujitsu or an Affiliate of Fujitsu shall make payments to, or on behalf of, the Joint Venture, and to be paid as or on behalf of AMD or an Affiliate of Fujitsu, in satisfaction of a breach of contract claim, indemnification pursuant to Section 10.2(a)(iclaim, enforcement action or other legal or equitable claims of the Joint Venture and of AMD or an Affiliate of AMD (other than in each case, for indemnification of AMD or an Affiliate of AMD against a Third Party Claim), (iv)related to any Transaction Document or the transactions contemplated thereunder, (v) and (viiB) exceed $35,500,000 Fujitsu makes the payments in satisfaction of the claim of the Joint Venture, the amounts payable to, or on behalf of, AMD or its Affiliate by Fujitsu or its Affiliate shall be reduced by an amount equal to the product of (X) AMD’s Membership Interest at the “Cap”). Seller’s time of the claim of the Joint Venture multiplied by (Y) the aggregate liability under this ARTICLE X shall not exceed amount paid by Fujitsu to, or on behalf of, the Purchase PriceJoint Venture, in satisfaction of the claim of the Joint Venture.
(b) Notwithstanding The parties hereto agree that irreparable damage would occur if the representations and warranties set forth in Section 5.22 or 6.22 are breached. Accordingly, AMD, AMD Investments and the Joint Venture shall be entitled to specifically enforce the provisions of Section 10.4(a)10.3(b) as provided in Section 12.11, (i) the De Minimus Amount and Fujitsu, Fujitsu Sub and the Indemnification Deductible Joint Venture shall not apply be entitled to specifically enforce the provisions of Section 10.2(b) as provided in Section 12.11, in each case in addition to any other remedy to such parties are entitled at law or in equity.
(c) The parties shall make appropriate adjustments for insurance proceeds actually received (with respect to Losses) in calculating such Losses under this Agreement. Any insurance proceeds actually recovered by an indemnified party to the extent relating to breaches any Losses previously paid by an Indemnifying Party hereunder shall be paid over promptly to such Indemnifying Party. All indemnification payments made pursuant to this Article X shall be made on an After Tax Basis.
(d) Following the Closing, the indemnification provisions in this Article X shall provide the exclusive remedy for any breach of the representations and warranties set forth in Company Fundamental Representations or this Agreement.
(e) Notwithstanding anything herein to the contrary, the limitations set forth in this Section 3.15 (Taxes); (ii) the Cap 10.8 shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches any claims arising out of fraud in the making of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policyherein.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Contribution and Assumption Agreement, Contribution and Assumption Agreement (Advanced Micro Devices Inc)
Limitations on Indemnification. With respect to indemnification claims brought against any Equityholder pursuant to this Section 8:
(a) Notwithstanding The Equityholders’ maximum aggregate liability with respect to claims arising out of Section 8.2(a)(i), other than as otherwise expressly set forth herein, shall be limited to the provisions Indemnification Escrow; provided, that with respect to claims based upon the IP Representations, the Equityholders’ maximum aggregate liability shall be an amount equal to $20,000,000 (inclusive of this ARTICLE Xany claims based upon the IP Representations otherwise satisfied out of the Indemnification Escrow); provided, further that with respect to claims based upon the Fundamental Representations or fraud, intentional misrepresentation or willful misconduct, each of the Equityholders’ maximum aggregate liability (ion a cumulative basis) shall be such Equityholders’ Percentage of the Net Merger Consideration actually received by such Equityholder (other than claims based on fraud, intentional misrepresentation or willful misconduct of an Equityholder for which there shall be no limit on liability with respect to such Equityholder).
(b) The Acquiror Indemnified Party Parties shall not have the right to be entitled to indemnification indemnified pursuant to Section 10.2(a)(i8.2(a)(i) (excluding with respect to the Fundamental Representations, fraud, intentional misrepresentation or willful misconduct) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (shall have incurred, on a cumulative basis following the “Indemnification Deductible”)Closing, and then only to the extent Losses in excess of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to $1,050,000 (the sum “Basket”) in which event the right to be indemnified shall apply to all Losses (i.e., inclusive of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyBasket).
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification anything to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties contrary in this Agreement, except the Equityholders’ liability for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes Losses based upon, arising out of, relating to or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted resulting from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is soughtVDA Proceeding, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties Dutch Returns or their Affiliates (including any increase in premium resulting therefrom) and (iii) any the other amounts actually received from a third party pursuant Tax Returns contemplated in Section 5.10(f) shall be limited, in the aggregate to indemnification, contribution or otherwise in respect the sum of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect (A) $50,000 and (B) fifty percent (50%) of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion amount of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyLosses in excess of $50,000.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Merger Agreement (Q2 Holdings, Inc.), Merger Agreement
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(i9.3(a) (other than for Losses related to a breach of the representations and warranties in Section 4.6), Anadarko shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 1% of the sum of (i) the Cash Consideration, plus (ii) the dollar value of the Unit Consideration on the Closing Date, plus (iii) the dollar value of the GP Consideration on the Closing Date (with each general partner unit being deemed for this purpose to have the same value as a common unit) (the sum of (i), (ii) and (iii) being the “Aggregate Consideration”) (the “Indemnification Deductible”), and then only to the extent of any such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Partnership Indemnified Party shall be Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,0009.3(a), and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim Anadarko shall not exceed be liable for such Losses that exceed, in the amount aggregate, 25% of the deductible applicable to such claim under Aggregate Consideration less the related Seller Insurance PolicyDeductible.
(c) Notwithstanding the provisions of this ARTICLE XSection 9.8(a) and (b), (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b9.3(b), 9.3(c), 9.3(d), 9.3(e), or 9.3(f) exceeds or for claims arising from fraud, Anadarko shall be fully liable for such Losses without respect to the Indemnification Deductible in Section 9.8(a) and the limitations in Section 9.8(b).
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 9.2(a), the Partnership shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess and (ii) in no event shall excess. In addition, to the aggregate amount extent the Anadarko Indemnified Parties are entitled to be paid as indemnification for Losses pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount9.2(a), the Indemnification Deductible and the Cap Partnership shall not apply with respect to be liable for such Losses relating to indemnification pursuant to Section 7.4(i) or to breaches that exceed, in the aggregate, 10% of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed Aggregate Consideration less the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesDeductible.
(e) No Indemnified Party will be entitled to indemnification Notwithstanding Section 9.8(d), to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Anadarko Indemnified Parties are entitled to assert a claim indemnification for indemnificationLosses pursuant to Section 9.2(b) or for claims arising from fraud, the amount of any Partnership shall be fully liable for such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in without respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to Deductible and the Indemnifying Partylimitations in Section 9.8(d).
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Contribution Agreement, Contribution Agreement (Western Gas Partners LP)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary:
(i) for purposes of Section 11.2(a), with respect to each representation or warranty contained in this Agreement that is Qualified, no Acquiror Indemnified Party such Qualification shall be permitted for the purpose of determining whether an inaccuracy or breach of such representation or warranty has occurred or the amount of any Loss that is the subject of indemnification hereunder, and all Losses shall be calculated without regard to any Qualification;
(ii) no individual claim (or series of related claims) by an Indemnitee may be asserted (and no Indemnitee shall be entitled to indemnification under this ARTICLE X with respect to any such claim or series of related claims) with respect to Section 11.2(a)(i) (excluding any inaccuracy or breach of the representations and warranties set forth in Section 3.4(e)) unless the aggregate amount of Losses that would be payable with respect to such claim (or series of related claims) exceeds an amount equal to $50,000 (it being understood that any such individual claim (or series of related claims) for amounts less than $50,000 shall be ignored for purposes of determining whether the Threshold has been exceeded);
(iiii) the right of any Indemnitee to indemnification pursuant to Sections 11.2(a)(i) (excluding any inaccuracy or breach of the representations and warranties set forth in Section 3.4(e)) shall not be effective until the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant thereto exceeds $1,500,000 (the “Threshold Amount”) and then only to the extent such Losses are reflected aggregate amount exceeds the Threshold Amount;
(iv) except as increased pursuant to Section 9.4(i) solely for purposes of any Tax Opinion Indemnification, the right of any Indemnitee to indemnification pursuant to Section 11.2(a) shall be limited to $27,500,000 in the Closing Date Working Capital Statement or aggregate and no indemnification pursuant to such provisions shall be payable thereafter;
(iiv) punitive, consequential, indirect, incidental or special damages, except the right of any Seller Indemnitee to indemnification pursuant to this Agreement shall be limited to an aggregate amount equal to the extent Purchase Price and no indemnification pursuant to this Agreement shall be payable thereafter; and
(vi) Buyer Indemnities, on the one hand, and Seller Indemnitees on the other hand, shall only be entitled to recover the full amount of a Loss once with respect to any such damages are received by item giving rise to a third party from an Indemnified PartyLoss.
(gb) In For purposes of determining the amount of any Losses and all Taxes for which the Indemnified Parties Buyer Indemnities are entitled to assert a claim for indemnificationindemnification pursuant to Section 11.2(a)(iv), the amount of Taxes imposed on any such Losses will Company Entity (other than the Company, the Subsidiaries and the Cluster Subsidiary Holding Companies) that are attributable to any Pre-Closing Tax Period shall be determined after deducting therefrom (i) limited to the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect applicable ARA Ownership Percentage of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyTaxes.
(hc) No Indemnified Party Any amounts deposited and held under the Escrow Agreement pursuant to Section 9.4(i) and any amounts retained in and held under the Escrow Agreement pursuant to Section 9.4(i) shall only be entitled used to recover any amount relating satisfy Losses attributable to any matter arising under one provision of this Agreement position subject to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementTax Opinion Indemnification.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Contribution and Merger Agreement, Contribution and Merger Agreement (American Renal Associates LLC)
Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification the aggregate liability of each of Parent and Buyer pursuant to Section 10.2(a)(i) unless and until 8.2 or Section 8.3, as the amount of Losses incurred by such Acquiror Indemnified Party case may be, shall not exceed the Base Purchase Price, except that are the subject of a claim foregoing limitation shall not apply to Parent’s obligations under Section 8.2(d), (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”e) and such Acquiror Indemnified Party (g) or Buyer’s obligations under Section 8.3(c); (ii) the aggregate liability of Parent or Buyer pursuant to Sections 8.2(a), or 8.3(a), as the case may be (other than in respect of any inaccuracy or breach of the Specified Representations), shall only be entitled not exceed, as to indemnification each party, an amount equal to 30% of the Purchase Price; (iii) the aggregate liability of Parent pursuant to Section 10.2(a)(i8.2(g) shall not exceed an amount equal to 30% of the extent Base Purchase Price, and (iv) the aggregate amount liability of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification Parent and Buyer pursuant to Section 10.2(a)(iSections 8.2(l)8.3(c) exceeds $3,550,000 (the “Indemnification Deductible”and 8.3(d), and then only to as the extent of such excesscase may be, shall be as set forth in Section 8.9; provided, however, that the limitations in clauses (i), (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (viiiii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceapply to any fraud or Willful Breach.
(b) Notwithstanding no Indemnified Party will be entitled to recover Remote Damages pursuant to Sections 8.2 or 8.3, except to the provisions extent that Remote Damages are awarded in the case of Section 10.4(a)fraud or to the extent such damages are actually paid by the Indemnified Party to a third Person pursuant to a final, non-appealable Order or settlement in any Third-Party Claim, in which case such Remote Damages paid to such third Person shall be considered Losses for which recovery may be sought in accordance with the terms of this Agreement;
(c) no claim for indemnification may be made (i) by a Buyer Indemnitee pursuant to Section 8.2(a) or by a Seller Indemnitee pursuant to Section 8.3(a) unless written notice of such claim (describing the De Minimus facts or events giving rise to such claim with reasonable specificity to the extent of the knowledge of the noticing party) has been given to the party from whom indemnification is sought (the “Indemnifying Party”) during the relevant survival period set forth in Section 8.1 (which will be the survival period of the representation and warranty alleged to have been breached); or (ii) by a Buyer Indemnitee pursuant to Section 8.2(g) unless written notice of such claim (describing the facts or events giving rise to such claim with reasonable specificity to the extent of the knowledge of the noticing party) has been given to Parent prior to the seventh (7th) anniversary of the Closing Date;
(d) Parent shall have no liability pursuant to Section 8.2(a): (i) for any Losses with respect to an individual matter or series of related matters until the cumulative aggregate amount of the Losses with respect to such matter or series of related matters arising out of the same facts or circumstances exceeds U.S.$175,000 (the “Threshold Amount”), in which case the amount of all such Losses (including those that are less than the Threshold Amount) shall be included for purposes of computing the Losses that are indemnifiable hereunder and/or applicable against the Basket Amount pursuant to clause (ii) below; and (ii) until the Indemnification Deductible aggregate amount of the Losses of the Buyer Indemnitees for which indemnification would otherwise be available under Section 8.2(a) exceeds 0.75% of the Base Purchase Price (the “Basket Amount”), after which Parent will be obligated to indemnify for only that portion of such Losses of the Buyer Indemnitees that exceed the Basket Amount; provided, however, that the limitations on liability set forth in this clause (d) shall not apply with respect to Losses relating incurred by a Buyer Indemnitee by reason of any inaccuracy or breach of a Specified Representation.
(e) Parent shall have no liability pursuant to breaches Section 8.2(g) until the aggregate amount of the Losses of the Buyer Indemnitees for which indemnification would otherwise be available under Section 8.2(g) exceeds 1.0% of the Base Purchase Price (the “Environmental Deductible”), after which Parent will be obligated to indemnify Buyer Indemnitee for only Sellers’ Portion of such Losses of the Buyer Indemnitees that exceed the Environmental Deductible; provided, however, that the limitations on liability set forth in this clause (e) shall not apply to Losses incurred by a Buyer Indemnitee by reason of any inaccuracy or breach of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 2.14.
(Taxes); (iif) Parent shall have no liability pursuant to Section 8.2 for any Loss to the Cap shall not apply extent a specific identified reserve with respect to Losses relating to indemnification pursuant to such Loss is reflected in the Purchase Price Adjustments for Closing Working Capital or Transferred Company Indebtedness or reflected on Schedule 8.4(f) of the Disclosure Letter.
(g) Notwithstanding any other provision of this Agreement, Parent’s obligations under Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii8.2(a) in respect of any asserted breach or (ix) or to breaches inaccuracy of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party 2.14 related to a Remedial Action shall be entitled limited to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party the least stringent, lowest cost approach to Remedial Action that are the subject of a claim (is allowed under Environmental Requirements or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties relevant Governmental Authority, that are indemnifiable pursuant to in either case is consistent with continued prudent operation of the relevant facility and generally accepted industry practices and that is reasonably available.
(h) Parent shall have no liability under Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi8.2(d) with respect to the Leased Sites for Losses to the extent occurring as a result of or triggered by (i) the closure, decommissioning or demolition after the Closing of any claim part of any facility or structure of any Transferred Company, other than as required under a Lease Agreement; or (ii) under Section 8.2 to the extent occurring as a result of or triggered by any sampling, monitoring, testing, or surface or subsurface investigation conducted after the Closing that is not expressly required pursuant to an Environmental Requirement of any Governmental Authority (except where the Governmental Authority has requested such Remedial Action by reason of a request initiated by Buyer or its Representatives). Notwithstanding the foregoing, Buyer shall be permitted to conduct any routine maintenance of any existing facility or structure on the Leased Sites without affecting the liability of Parent under Section 10.2(a)(iv8.2(d) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyLeased Sites.
(ci) Notwithstanding Parent shall have no liability under Section 8.2(g) for Losses to the provisions extent occurring as a result of this ARTICLE X, or triggered by (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to the closure, decommissioning or demolition after the Closing of any part of any facility or structure of any Transferred Company; or (ii) under Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification 8.2 to the extent occurring as a result of or triggered by any sampling, monitoring, testing, or surface or subsurface investigation conducted after the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification Closing that is not expressly required pursuant to an Environmental Requirement of any Governmental Authority (except where the Governmental Authority has requested such Remedial Action by reason of a request initiated by Buyer or Representatives). Notwithstanding the foregoing, Buyer shall be permitted to conduct the following activities without affecting the liability of Parent under Section 10.2(b8.2(g): (A) exceeds any routine maintenance of any existing facility or structure; (B) any demolition of any portion of any existing facility or structure and related utilities down to ground surface (but not below ground surface unless necessary to properly isolate the Indemnification Deductibleunderground structure from the operating portions of the facility); and (C) any construction of new facilities or modification of any existing facility or structure but not environmental sampling facilities other than sampling that would be performed by a reasonable and prudent operator acting without the benefit of indemnification; provided, and then only however, that, in each case (1) Buyer shall provide written notice to Parent at least thirty (30) days prior to such activity with information sufficient to enable Parent reasonably to evaluate the extent and nature of such excess the contemplated disturbance of the property; (2) Parent shall have thirty (30) days in which to provide Buyer with comments and suggestions on the activity; and (ii3) in no event Buyer shall take into account and, where commercially reasonable, accommodate Parent’s comments and suggestions regarding the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceactivity.
(dj) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events8.2(g), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for include (i) any Losses arising primarily from any change to a non-industrial use of the extent such Losses are reflected in Real Property by Buyer after the Closing Date Working Capital Statement or Closing; (ii) punitiveany Loss resulting primarily from any increase in, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out worsening of or other adverse change in connection with any Environmental Condition that arises from any act or omission attributable to Buyer or any Transferred Company (and their Representatives) following the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) Closing; and (iii) any expense related to management or employee time (whether opportunity costs, direct costs or otherwise).
(k) For purposes of Section 8.2(d) with respect to the Leased Sites, Losses shall not include (i) any Losses arising primarily from any change in use of the Real Property by Buyer after the Closing (including an increase in capacity of the facilities or structures thereon) other amounts actually received than as required under a Lease Agreement; (ii) any Loss resulting primarily from any increase in, worsening of or other adverse change in any Environmental Condition that arises from any act or omission attributable to Buyer or any Transferred Company (or their Representatives) following the Closing; (iii) any Loss resulting from any Environmental Condition caused or created by Buyer or its Representatives, or that arises from Buyer’s operation of the Business or a third party pursuant change in Legal Requirements applicable thereto (except as it relates to indemnificationPre-Closing Environmental Conditions), contribution in each case, during the term of the applicable Lease Agreement; and (iv) any cost and expense related to Buyer’s management or otherwise in respect employee time (whether opportunity costs, direct costs or expenses, or otherwise).
(l) Buyer and Parent shall each take, and shall cause their respective Affiliates to take, all reasonable measures consistent with the safe and prudent operation of any Losses. All Indemnified Parties shall use commercially reasonable efforts the applicable property to mitigate all Losses any Loss for which such Indemnified Parties are entitled or indemnification may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief sought hereunder promptly upon a responsible officer or other amounts from any third party are actually recovered or realized by employee of an Indemnified Party subsequent or its Affiliates becoming aware of such Loss, and neither Buyer nor Parent shall be liable for any Loss to receipt the extent the Indemnified Party or its Affiliates could have mitigated such Loss by taking measures consistent with the safe and prudent operation of the applicable property after a responsible officer or employee of such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyits Affiliates becomes aware thereof.
(hm) No Indemnified Party The Seller Indemnitees shall be entitled to recover have no recourse against any amount relating to Transferred Company, their Affiliates or their respective Representatives, assigns or successors for any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of indemnification claim asserted by a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementBuyer Indemnitee.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Rockwood Holdings, Inc.), Stock Purchase Agreement (Huntsman International LLC)
Limitations on Indemnification. Notwithstanding the foregoing, the right to indemnification under this Section 8 shall be subject to the following terms:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party No indemnification shall be entitled to indemnification payable pursuant to Section 10.2(a)(i) 8.2 or Section 8.3 unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to all claims for indemnification pursuant to the applicable Section 10.2(a)(i) to exceeds $250,000 in the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to aggregate, whereupon indemnification pursuant to such Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of shall be payable for all such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceclaims without any deduction.
(b) Notwithstanding No indemnification shall be payable pursuant to Section 8.2 or Section 8.3 after the provisions of Section 10.4(a)Expiration Date, except with respect to (i) claims made prior to the De Minimus Amount Expiration Date, but not resolved by the Expiration Date and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) claims made with respect to any claim pursuant to Section 10.2(a)(ivbreach of Sections 3.1, 3.2, 3.3 and 3.17, which may be made at any time until the thirty (30) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount month anniversary of the deductible applicable to such claim under the related Seller Insurance PolicyClosing Date.
(c) Notwithstanding the provisions of this ARTICLE XExcept as provided in Section 8.6(d), (i) no Seller Indemnified Party all indemnification claims under Section 8.2 shall be entitled to indemnification satisfied solely from the shares held pursuant to Section 10.2(b) unless the Escrow Agreement and until no person shall have any right to recovery directly from any person who was a holder of Seller Stock immediately prior to the amount Effective Time. Without limitation of Losses incurred by the foregoing, the maximum liability of any former holder of Seller Stock for any breach of a representation, warranty or covenant of Seller shall be limited to those shares in which such Seller Indemnified Party holder has an interest that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification held pursuant to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceEscrow Agreement.
(d) For purposes The limitations of determining whether Section 8.6(a), (b) and (c) shall not apply in the case of a fraudulent or intentional misrepresentation or breach by any party, but no person shall be liable for any such misrepresentation or breach by any other person (except to the extent of any its share of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating shares held under the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Escrow Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationindemnity, the amount of there shall be taken into account any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is soughttax benefit, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third similar recovery or offset realized, directly or indirectly, by the party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyindemnified.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 2 contracts
Sources: Merger Agreement (Bea Systems Inc), Merger Agreement (Bea Systems Inc)
Limitations on Indemnification. (a) Notwithstanding anything to the provisions of contrary set forth in this ARTICLE X, Agreement:
(i) no Acquiror the maximum aggregate amount of indemnifiable Losses that may be recovered from the Seller Parties by the Purchaser Indemnified Party shall be entitled to indemnification Parties pursuant to Section 10.2(a)(i6.3(a) unless (other than with respect to claims for inaccuracy or breach of Fundamental Reps or fraud) shall be Five Million Two Hundred Fifty Thousand and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim 00/100 Dollars (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”5,250,000.00), and then only to the extent of such excess, ;
(ii) other than in the case of fraud, in no event shall the aggregate amount of Losses for which the Seller Parties are obligated to be paid as indemnification pursuant to indemnify the Purchaser Indemnified Parties under Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not 6.3 exceed the Purchase Price.;
(b) Notwithstanding the provisions of Section 10.4(a), (iiii) the De Minimus Amount and maximum aggregate amount of indemnifiable Losses that may be recovered from the Indemnification Deductible shall not apply Purchaser Parties by the Seller Indemnified Parties pursuant to Section 6.2(a) (other than with respect to Losses relating to breaches claims for inaccuracy or breach of the representations and warranties set forth in Company Purchaser Fundamental Representations Reps or Section 3.15 (Taxes); (iifraud) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or shall be Five Million Two Hundred Fifty Thousand and 00/100 Dollars (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; 5,250,000.00);
(iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until other than in the amount case of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)fraud, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount of Losses for which the Purchaser Parties are obligated to indemnify the Seller Indemnified Parties under Section 6.2 exceed the Purchase Price;
(v) the Seller Parties shall not be paid as liable to any Purchaser Indemnified Party for any claim for indemnification pursuant to Section 10.2(b6.3(a) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply (other than with respect to claims for inaccuracies in or breaches of the Fundamental Reps, fraud or a claim for indemnity for the failure described in Section 6.3(d)) unless and until the aggregate amount of indemnifiable Losses relating that may be recovered from the Seller Parties equals or exceeds Two Hundred Twenty-Five Thousand and 00/100 Dollars ($225,000.00) (the “Basket Amount”), in which case the Seller Parties shall be liable for all indemnifiable Losses in excess of the Basket Amount;
(vi) the Purchaser Parties shall not be liable to any Seller Indemnified Party for any claim for indemnification pursuant to Section 7.4(i6.2(a) (other than with respect to claims for inaccuracies in or to breaches of Purchaser Fundamental Reps or fraud) unless and until the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X amount of indemnifiable Losses that may be recovered from the Purchaser Parties equals or exceeds the Basket Amount, in which case the Purchaser Parties shall not exceed be liable for all indemnifiable Losses in excess of the Purchase Price.Basket Amount;
(dvii) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Purchaser Indemnified Parties in the event of an Acquiror a Purchaser Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had has already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.;
(iviii) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to recover any Loss to the extent that the Loss comprising a claim (or part thereof) with respect to such matter has been included in the calculation of the Closing Net Working Capital Adjustment;
(ix) Seller Parties shall not be liable to any Purchaser Indemnified Party for any claim for indemnification under this ARTICLE X in respect Article VI for any Losses based upon or arising out of any Losses which occur inaccuracy in or are increased as a result breach of any of the entry into force ofrepresentations or warranties of the Seller Parties contained in this Agreement if any of the Purchaser Parties had Knowledge of such inaccuracy or breach prior to the Closing; and
(b) in no event shall an Indemnifying Party have liability to the Indemnified Party for any consequential, special, incidental, punitive or exemplary damages, except if and to the extent any change insuch damages are recovered against an Indemnified Party pursuant to a Third Party Claim. The parties acknowledge and agree that, after following the Closing DateClosing, their sole and exclusive remedy with respect to any and all claims relating to this Agreement and the transactions contemplated hereby (other than claims arising from fraud or intentional or willful misconduct) shall be pursuant to the indemnification provisions set forth in this ARTICLE VI. In furtherance of the foregoing, each party hereby waives on its own behalf and (in the case of the Purchaser Parties, on behalf of the Purchaser Indemnified Parties and in the case of the Seller Parties, on behalf of the Seller Indemnified Parties) to the fullest extent permitted under Law, any and all claims it may have against any of the other parties or their Affiliates arising under or based upon this Agreement, any document or certificate delivered in connection herewith, any Law or otherwise, except pursuant to the indemnification provisions set forth in this ARTICLE VI. Nothing in this Section 6.4(b) shall limit any practice Person’s right to seek and obtain any equitable relief to which any Person shall be entitled or to seek any remedy on account of any Governmental Authority (including any increase in the Tax rates Person’s fraudulent, intentional or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectwillful misconduct.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to (i) Section 10.2(a)(i9.3(a) (other than for Losses related to a breach of the representations and warranties in Section 4.6), Anadarko shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 one percent (1%) of the sum of (A) the Cash Consideration plus (B) the dollar value of the Unit Consideration on the Closing Date (the sum of (A) and (B) being the “Aggregate Consideration”) (the “Indemnification Deductible”), and then only to the extent of any such excess, excess and (ii) in no event shall the aggregate amount Section 9.3(a) for Losses related to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches a breach of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap 4.6, Anadarko shall not apply with respect to be liable for those Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of unless the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the aggregate amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, 100,000 and then only to the extent of any such excess; .
(ivb) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Partnership Indemnified Party shall be Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,0009.3(a), and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim Anadarko shall not exceed be liable for such Losses that exceed, in the amount aggregate, twenty-five percent (25%) of the deductible applicable to such claim under Aggregate Consideration less the related Seller Insurance PolicyDeductible.
(c) Notwithstanding the provisions of this ARTICLE Xclauses (a) and (b) above, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b9.3(b), 9.3(c), 9.3(d) exceeds or 9.3(e) or for claims arising from fraud, Anadarko shall be fully liable for such Losses without respect to the Indemnification Deductible in Section 9.8(a) and the limitations in Section 9.8(b).
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 9.2(a), the Partnership shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess and (ii) in no event shall excess. In addition, to the aggregate amount extent the Anadarko Indemnified Parties are entitled to be paid as indemnification for Losses pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount9.2(a), the Indemnification Deductible and the Cap Partnership shall not apply with respect to be liable for such Losses relating to indemnification pursuant to Section 7.4(ithat exceed, in the aggregate, ten percent (10%) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed Aggregate Consideration less the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesDeductible.
(e) No Indemnified Party will be entitled to indemnification Notwithstanding clause (d) above, to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Anadarko Indemnified Parties are entitled to assert a claim indemnification for indemnificationLosses pursuant to Section 9.2(b) or for claims arising from fraud, the amount of any Partnership shall be fully liable for such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in without respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to Deductible and the Indemnifying Partylimitations in Section 9.8(d).
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall The Parent Claimants will not be entitled to such indemnification pursuant to under Section 10.2(a)(i9.2(a) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for the Parent Claimants exceeds $1,125,000 (the "Basket Amount"), in which such Acquiror Indemnified Parties are event the Parent Claimants will be entitled to indemnification pursuant for all Losses so incurred, not just Losses in excess of the Basket Amount. The maximum aggregate amount of indemnification that the Stockholders shall be obligated to pay under Section 10.2(a)(i9.2(a) exceeds $3,550,000 shall be equal to 10% of the aggregate value (calculated using the Average Closing Price) of the Merger Shares (the “Indemnification Deductible”"Cap Amount"); provided, however, that the Basket Amount threshold and then only the Cap Amount shall not apply to the extent Losses arising with respect to any misrepresentation or breach of such excessany representation or warranty made in Section 3.1, (ii) 3.2, 3.3, 3.4, 3.5, 3.12, 3.16, 3.18 or 3.20 or any covenant contained in Section 6.9, but in no event shall the aggregate amount to be paid as of indemnification pursuant to payments made under Section 10.2(a)(i), (iv), (v) and (vii9.2(a) exceed $35,500,000 the aggregate value (calculated using the average closing price of the Parent Common Stock as reported on the Nasdaq Stock Market for the ten consecutive trading day period immediately preceding the Closing Date (the “Cap”"Average Closing Price"). Seller’s aggregate liability under this ARTICLE X shall not exceed ) of the Purchase PriceMerger Shares.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall The Stockholder Claimants will not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to seek indemnification pursuant to under Section 10.2(a)(iv) or (vii9.2(b) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for the Stockholder Claimants exceeds the Basket Amount, in which such Seller Indemnified Parties are event the Stockholder Claimants will be entitled to indemnification pursuant for all Losses so incurred, not just Losses in excess of the Basket Amount. The maximum aggregate amount of indemnification that Parent shall be obligated to pay under Section 10.2(b9.2(b) exceeds shall be equal to the Indemnification DeductibleCap Amount; provided, however, that the Basket Amount threshold and the foregoing limitation shall not apply to Losses arising with respect to any misrepresentation or breach of any representation or warranty made in Section 4.1, 4.2, 4.3 or 4.4, and then only the Cap Amount shall not apply to Losses arising out of any material breach by Parent under the extent of such excess and (ii) Registration Rights Agreement, but in no event shall the aggregate amount to be paid as of indemnification pursuant to payments made under Section 10.2(b9.2(b) exceed the Cap; provided that aggregate value (calculated using the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(iAverage Closing Price) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceMerger Shares.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Sources: Merger Agreement (Schein Henry Inc)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(i9.3(a) (other than for Losses related to a breach of the representations and warranties in Section 4.6), Anadarko shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 1% of the sum of (i) the Cash Consideration, plus (ii) the dollar value of the Unit Consideration on the Closing Date (the sum of (i) and (ii) being the “Aggregate Consideration”) (the “Indemnification Deductible”), and then only to the extent of any such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Partnership Indemnified Party shall be Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,0009.3(a), and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim Anadarko shall not exceed be liable for such Losses that exceed, in the amount aggregate, 25% of the deductible applicable to such claim under Aggregate Consideration less the related Seller Insurance PolicyDeductible.
(c) Notwithstanding the provisions of this ARTICLE XSection 9.8(a) and (b), (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b9.3(b), 9.3(c), or for claims arising from fraud, Anadarko shall be fully liable for such Losses without respect to the Deductible in Section 9.8(a) exceeds and the Indemnification limitations in Section 9.8(b).
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 9.2(a), the Partnership shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess and (ii) in no event shall excess. In addition, to the aggregate amount extent the Anadarko Indemnified Parties are entitled to be paid as indemnification for Losses pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount9.2(a), the Indemnification Deductible and the Cap Partnership shall not apply with respect to be liable for such Losses relating to indemnification pursuant to Section 7.4(i) or to breaches that exceed, in the aggregate, 10% of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed Aggregate Consideration less the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesDeductible.
(e) No Indemnified Party will be entitled to indemnification Notwithstanding Section 9.8(d), to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Anadarko Indemnified Parties are entitled to assert a claim indemnification for indemnificationLosses pursuant to Section 9.2(b) or for claims arising from fraud, the amount of any Partnership shall be fully liable for such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in without respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to Deductible and the Indemnifying Partylimitations in Section 9.8(d).
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (ai) Notwithstanding No ATP Indemnified Person shall be entitled to indemnification pursuant to Section 11(a)(i), unless and until the aggregate Losses incurred by all ATP Indemnified Persons in respect of all claims under Section 11(a) collectively exceed $50,000 whereupon ATP Indemnified Persons shall be entitled to indemnification hereunder (subject to the other provisions of this ARTICLE XSection 11) from the Seller or C▇▇▇▇ for all such Losses incurred by ATP Indemnified Persons in excess of such $50,000 deductible. Notwithstanding the foregoing, the limitations set forth in this Section 11(c)(i) shall not apply to claims for indemnification pursuant to Section 11(a)(i) that relate to the representations and warranties contained in Section 4(n) or pursuant to Section 11(a)(i)(ii).
(iii) no Acquiror No Seller Indemnified Person shall be entitled to indemnification pursuant to Section 11(a)(ii), unless and until the aggregate Losses incurred by all Seller Indemnified Persons in respect of all claims under Section 11(a) collectively exceed $50,000 whereupon Seller Indemnified Persons shall be entitled to indemnification hereunder (subject to the other provisions of this Section 11) from ATP for all such Losses incurred by Seller Indemnified Persons in excess of such $50,000 deductible. Notwithstanding the foregoing, the limitations set forth in this Section 11(c)(ii) shall not apply to claims for indemnification pursuant to Section 11(a)(i) that relate to the representations and warranties contained in Section 5(f) or pursuant to Section 11(a)(ii)(ii).
(iii) No Party shall be entitled to indemnification pursuant to Section 10.2(a)(i11(a)(i)(i) or Section 11(a)(ii)(i), as the case may be, unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are party seeking indemnification notifies the subject other party of a claim specifying the factual basis of the claim in reasonable detail on or before the fifth (or any series 5th) anniversary of related claims) exceeds $50,000 (the “De Minimus Amount”) and initial Closing hereunder, in which case, the survival period shall continue until such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), claim is fully resolved.
(iv), ) Except as set forth in (vvi) and (vii) exceed $35,500,000 (below, the “Cap”). Seller’s maximum aggregate liability of the Seller to ATP and ATP Indemnified Persons for indemnification under Section 11(a)(i)(i) of this ARTICLE X Agreement shall not exceed the sum of (A) the aggregate Base Purchase PricePrice paid for the Assigned CDO Agreements, (B) the amount of the Service Fees and (C) the aggregate of Losses that constitute out-of-pocket costs of such ATP Indemnified Persons.
(bv) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties Except as set forth in Company Fundamental Representations or (vi) and (vii) below, the maximum aggregate liability of C▇▇▇▇ to ATP and ATP Indemnified Persons for indemnification under Section 3.15 (Taxes); (ii11(a)(i) the Cap of this Agreement shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), exceed the then applicable C▇▇▇▇ Indemnification Limit.
(vi)) The maximum aggregate liability of the Seller and C▇▇▇▇ to ATP and ATP Indemnified Persons for indemnification under (A) Section 11(a)(i)(ii) in connection with a breach of Section 6(b) of this Agreement or (B) Section 11(a)(i)(iv) of this Agreement shall not exceed the then applicable Tax Indemnification Limit.
(vii) Each of the Seller, C▇▇▇▇ and ATP hereby agrees that the liability of the Seller and C▇▇▇▇ to ATP and ATP Indemnified Persons if this Agreement is terminated by ATP and the transactions contemplated hereby are abandoned as described in Section 10(a)(ii)(i) as a result of breach or failure by the Seller or C▇▇▇▇ of any of their respective representations or warranties prior to the initial Closing under this Agreement, be deemed to be equal to ATP’s out-of-pocket expenses.
(viii) or (ix) or to breaches of the representations ATP and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror ATP Indemnified Party Persons shall not be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of in connection with a claim (under Section 11(a)(i)(iv) of this Agreement, if such Loss arises out of or any series relates to a change, following a Closing Date, by ATP or in the business of related claims) exceeds $250,000managing the Assigned CDO Agreements or a change, and then following a Closing Date, by ATP in the United States federal income tax reporting positions heretofore taken by or on behalf of the Issuer or Issuers, in question, but only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (change in operations or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve reporting is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim required or permitted under the related Seller Insurance PolicyAssigned CDO Agreements.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement, (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party UCB shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or not have any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
Section 9.01(a) hereof (b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to other than for breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (viiSpecified Representations) unless and until the amount of aggregate liability for Losses incurred suffered by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) Purchaser Indemnitees thereunder exceeds $250,000[***], and then only to the extent of such excess; (ivb) UCB’s aggregate maximum liability under Section 9.01(a) hereof (other than for breaches of the Specified Representations) shall not exceed [***] (the “Cap”); (c) no Acquiror Indemnified Party party shall have any liability under Section 9.01(a) or Section 9.02(a) hereof for any individual Loss of less than [***] and such individual Losses shall not be entitled aggregated for purposes of the preceding clauses (a) and (b); (d) UCB shall not have any liability for any otherwise indemnifiable Loss to indemnification pursuant the extent (x) the matter giving rise to Section 10.2(a)(vsuch Loss had been specifically reserved or provided for in the Most Recent Balance Sheet or (y) taken into account in the Working Capital Statement; (e) no party shall have any liability for an otherwise indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the amount of Losses incurred by such Acquiror Indemnified Party that are and is due and payable, so long as the subject claim for such Loss was timely submitted pursuant to the provisions of this Article IX; and (f) no party shall be liable for any otherwise indemnifiable Loss arising out of any breach of any representation, warranty, covenant or agreement of such party unless a claim (or therefor is asserted with specificity and in writing by the Indemnified Party timely in accordance with Section 9.08 hereof, failing which such claim shall be waived and extinguished. The waiver of any series of related claims) exceeds an amount equal condition to the sum Closing based on the accuracy of any representation or warranty or on the performance of or compliance with any covenant or agreement shall be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or warranty, covenant, agreement or obligation. Purchaser’s aggregate maximum liability under Section 9.02(a) hereof (1other than for breaches of the Purchaser Specified Representations) shall not exceed the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), Cap. Notwithstanding anything to the extent such reserve is reflected contrary contained in Final Net Working Capital plus (2this Agreement, UCB shall not have any liability under Section 9.01(d) hereof unless the aggregate liability for Losses suffered by the Purchaser Indemnitees thereunder exceeds $250,00015,000,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding The rights of the Buyer Indemnified Parties and the Seller Indemnified Parties to indemnification pursuant to the provisions of this ARTICLE XArticle 8 are subject to the following limitations, notwithstanding anything in this Agreement to the contrary:
(ia) no Acquiror No individual claim or series of related or similar claims for indemnification by any Buyer Indemnified Party pursuant to Section 8.02(a) (other than with respect to a claim arising from a breach of a Fundamental Representation), or any Seller Indemnified Party pursuant to Section 8.03(a) (other than with respect to a claim arising from a breach of the representations set forth in Sections 5.01 (Organization and Power), 5.02 (Authorization; Valid and Binding Agreement) and 5.06 (Brokerage)), shall be asserted unless and until the aggregate amount of Losses that would be payable pursuant to such claim exceeds an amount equal to $35,000 (the “Mini-Basket”) (it being understood that any such individual claims or series of related claims for amounts less than the Mini-Basket shall be ignored in determining whether the Deductible has been exceeded and any claim or series of related or similar claims in excess of the Mini-Basket shall include the Mini-Basket from dollar one and be included for purposes of determining whether the Deductible has been exceeded). For the purpose of this Section 8.04(a), any claims pursuant to Section 3.19 (Sufficiency of Assets) shall be deemed to be related claims;
(b) No Buyer Indemnified Party shall be entitled to recover any Losses in respect of any indemnification claim made pursuant to Section 10.2(a)(i) 8.02(a), unless and until the aggregate amount of Losses incurred by that would otherwise be payable pursuant to Section 8.02(a) collectively exceeds on a cumulative basis the Deductible, and if the amount of such Acquiror Losses exceeds the Deductible, the Buyer Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party Parties shall only be entitled to indemnification pursuant to Section 10.2(a)(i) be indemnified and held harmless from such Losses in excess of the Deductible, but subject in all cases to the extent other terms set forth in this Article 8; provided, that the aggregate amount Deductible shall not apply to (i) Losses suffered, incurred or paid by any Buyer Indemnified Party as a result of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled or arising out of the inaccuracy in or breach of any representation or warranty of Sellers contained in Sections 3.01 (Organization and Power), 3.02(a) (Authorization; Valid and Binding Agreement), 3.03 (Capitalization and Subsidiaries), 3.07(a) (Title to indemnification pursuant to Section 10.2(a)(iOther Properties), 3.08 (Tax Matters), 3.20 (Brokerage), 4.01 (Organization and Power) exceeds $3,550,000 and 4.02 (Ownership) or of Sellers contained in the Contribution Agreement (collectively, the “Indemnification DeductibleFundamental Representations”), and then only to the extent of such excess, (ii) Losses suffered, incurred or paid by any Buyer Indemnified Party as a result of or arising out of the inaccuracy in no event shall or breach of any representation or warranty of Sellers contained in Section 3.19 (Sufficiency of Assets) or (iii) claims relating to Fraud, it being agreed that, in such circumstances, the aggregate amount applicable Buyer Indemnified Party shall, subject to the other limitations set forth in this Article 8, be entitled to be paid indemnified and held harmless from all such Losses from the first dollar of such Losses (except for the Mini-Basket as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating it applies to breaches of the representations and warranties set forth in Company Section 3.19 (Sufficiency of Assets)), and any such Losses shall not count towards the Deductible;
(c) In no event shall the Buyer Indemnified Parties be entitled to recover any Losses in respect of any indemnification claim or claims made pursuant to Section 8.02(a) in an aggregate amount in excess of the Cap Amount; provided, that the Cap Amount shall not apply to (i) Losses suffered, incurred or paid by any Buyer Indemnified Party as a result of or arising out of the inaccuracy in or breach of any Fundamental Representations or as a result of or arising out of the inaccuracy in or breach of Section 3.15 3.19 (TaxesSufficiency of Assets); , or (ii) claims relating to Fraud;
(d) In no event shall the Buyer Indemnified Parties be entitled to recover any Losses in respect of any indemnification claim or claims (other than claims relating to Fraud) made pursuant to Section 8.02(a) as a result of or arising out of the inaccuracy in or breach of Section 3.19 (Sufficiency of Assets) in excess of $25,000,000.
(e) In no event shall the Buyer Indemnified Parties be entitled to recover any Losses in respect of any indemnification claim or claims (other than claims relating to Fraud) made pursuant to Section 8.02(c)(iii) in excess of $2,000,000.
(f) In no event shall the Buyer Indemnified Parties be entitled to recover any Losses in respect of any indemnification claim or claims (other than claims relating to Fraud) made pursuant to Sections 8.02(a) and/or 8.02(b) in an aggregate amount in excess of the Purchase Price (as adjusted in accordance with Section 1.03);
(g) The amount of any Loss subject to indemnification under Sections 8.02 or 8.03 shall be calculated net of (i) any Tax Benefit realized by the Indemnitee on account of such Loss in any taxable year that begins prior to the second anniversary of the Closing Date and (ii) any third party insurance proceeds actually received by the Indemnitees on account of such Loss, net of the aggregate amount of all costs and expenses (including reasonable attorney’s fees and expenses) of recovery or collection, including deductibles, retention or similar costs or payments and any increases in premiums (collectively, “Recovery Costs”), and (iii) any indemnification payments made by any third party to, and actually received by, the Indemnitees on account of such Loss, net of any Recovery Costs. If the Indemnitee realizes a Tax Benefit in any taxable year that begins prior to the second anniversary of the Closing Date) and the amount of the indemnity payment was not previously reduced by the amount of such Tax Benefit (or any portion thereof), the Indemnitee shall promptly pay to the Indemnitor, the amount of such Tax Benefit (or such portion thereof as was not previously taken into account) at such time or times as and to the extent that such Tax Benefit is realized by the Indemnitee, but in no event shall the amount of such payment to the Indemnitor exceed the amount of the indemnification payment made to the Indemnitee and not previously reimbursed. For purposes hereof an Indemnitee shall realize, a “Tax Benefit” on account of a Loss for any taxable year to the extent that (i) the Indemnitee’s cash Tax liability for such taxable year determined without taking such Loss and the Tax consequences of any related indemnification payment into account (which Tax consequences for the purposes of this Section 8.04(g) shall include the present value, calculated at an eight percent (8%) discount rate, of any reduced amortization and depreciation deductions resulting from an indemnification payment) is greater than (ii) the Cap Indemnitee’s Tax liability for the relevant taxable year determined taking into account such Loss and the Tax consequences of any related indemnification payment. The Indemnitee shall use commercially reasonable efforts to seek realization of such Tax Benefit or recovery under any third party insurance policies covering any Losses, in each case to the same extent as such Indemnitee would pursue such recovery or realization if the related Losses were not subject to indemnification hereunder (but for the avoidance of doubt, only after the amount of any deductibles, retentions or similar costs have been satisfied and only the extent such policies cover such Losses); provided, however, notwithstanding anything to the contrary herein, the Indemnitees shall not apply be required to engage counsel or file or bring a lawsuit, arbitration or other action or Proceeding with respect to Losses relating any insurance policies or third party indemnification rights. For the avoidance of doubt, notwithstanding anything to indemnification pursuant to Section 7.4(a)the contrary in this Agreement, Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party Indemnitees shall be entitled to seek indemnification pursuant under this Article 8 concurrently with seeking recovery from any third party insurance policies or other third party. In the event that an insurance recovery under a third party insurance policy or third party indemnity payment is actually received by any Indemnitee with respect to Section 10.2(a)(iv) or (vii) unless and until any Loss for which any such Indemnitee has been indemnified hereunder, then the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only Indemnitee shall promptly pay to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds Indemnitor, an amount equal to the sum lessor of (1x) the reserve for amount of such insurance recovery or third party indemnity payment actually received by the applicable workers compensation claim set forth on Schedule 10.4(b)Indemnitees, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000net of any Recovery Costs, and then only to (y) the extent amount of such excess; (v) no Acquiror Indemnified Party shall be entitled to the indemnification payment previously received by the Indemnitees pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation 8.02 with respect to such claim Losses and not previously reimbursed. To the extent that any Tax Benefit that is used to reduce a Loss pursuant to this Section 8.04(g) is disallowed, the Indemnitor shall not exceed the pay an amount of the deductible applicable equal to such claim disallowed Tax Benefit to the Indemnitee within five (5) days after Indemnitor’s receipt of notice of such disallowance, and such Tax Benefit shall become a “Disallowed Tax Benefit” for the purposes of this Agreement. Notwithstanding the foregoing, nothing in this Section 8.04(d) shall defer when an indemnification payment shall be made under the related Seller Insurance Policy.this Agreement;
(ch) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in In no event shall the aggregate amount Buyer Indemnified Parties be entitled to be paid as recover any Losses in respect of any indemnification claim or claims made pursuant to Section 10.2(b) exceed 8.02 to the Cap; provided extent that such Losses were included as a current liability or reserve for doubtful accounts in the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with calculation of Net Working Capital other than Losses in respect of Seller’s failure to Losses relating to indemnification pay any Final Closing Adjustment Shortfall pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.1.03(g); and
(di) For purposes of determining whether a breach of any of Notwithstanding anything to the representations or warranties of Seller or Company has occurred and, if socontrary in this Agreement, for purposes of calculating the amount of Losses relating to any breach which a Buyer Indemnified Party or a Seller Indemnified Party is entitled under Section 8.02(a) or Section 8.03(a) and for purposes of any of the representations determining whether a representation or warrantieswarranty has been breached, the representations and warranties in this Agreementof the Sellers and the Buyer shall not be deemed to be qualified by, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read interpreted without giving effect to any qualifications or limitations as to the terms “material,” “materiality,” and “Material Adverse Effect”; provided, however, that the foregoing shall not apply to the following: the defined terms “Material Contract”, “Material Client” contained in any such and “Material Supplier” and the representations and warranties.
(ewarranties set forth in Sections 3.05, 3.09(a)(ii), 3.12(a) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rightsand 3.12(b).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Allscripts Healthcare Solutions, Inc.)
Limitations on Indemnification. (a) Notwithstanding anything to the provisions of contrary in this ARTICLE XAgreement, Seller shall not be liable to the Purchaser Indemnified Parties (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount in respect of Losses any Damages incurred or suffered by such Acquiror Purchaser Indemnified Party that are the subject of is not a claim Qualifying Loss, and (or any series of related claimsii) exceeds $50,000 (the “De Minimus Amount”) and until such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent time as the aggregate amount of all Qualifying Losses incurred by all Acquiror of the Purchaser Indemnified Parties for which such Acquiror Indemnified Parties are entitled exceeds an amount equal to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”)100,000, and then only to the extent for such portion of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”)of all Qualifying Losses in excess thereof. Seller’s The aggregate liability of Seller under this ARTICLE X Agreement shall not exceed the Purchase Price$3,000,000.
(b) Notwithstanding anything to the provisions of Section 10.4(a)contrary in this Agreement, Purchaser shall not be liable to the Seller Indemnified Parties (i) the De Minimus Amount and the Indemnification Deductible shall not apply with in respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations any Damages incurred or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred suffered by such Seller Indemnified Party that are the subject of is not a Qualifying Loss, and (ii) until such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent time as the aggregate amount of all Qualifying Losses incurred by all of the Seller Indemnified Parties for which such Seller Indemnified Parties are entitled exceeds an aggregate amount equal to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible$100,000, and then only for such portion of the aggregate amount of all Qualifying Losses in excess thereof. The aggregate liability of Purchaser in respect of claims for indemnification for breaches or inaccuracies of any representation or warranty of Purchaser that is not a Fundamental Representation shall not exceed $1,000,000. The aggregate liability of Purchaser in respect of claims for indemnification under Sections 10.2(b)(i) and 10.2(b)(ii) shall not exceed $3,000,000.
(c) With respect to the extent each indemnification obligation in this Agreement:
(i) each such obligation shall be calculated net of such excess and any Tax benefit actually realized; (ii) in no event all Damages shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(bnet of any Eligible Insurance Proceeds; and (iii) exceed the Cap; provided that the De Minimus AmountIN NO EVENT SHALL AN INDEMNIFYING PARTY HAVE LIABILITY TO THE INDEMNIFIED PARTY FOR ANY CONSEQUENTIAL, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceSPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, LOST PROFITS OR INCOME, LOSS OF BUSINESS REPUTATION, EXEMPLARY OR SPECIAL DAMAGES, ANY DAMAGES BASED UPON ANY TYPE OF MULTIPLE OR DIMINUTION IN VALUE, OR OTHER SIMILAR ITEMS.
(d) For purposes If any portion of determining whether Damages to be reimbursed by the Indemnifying Party may be covered, in whole or in part, by third-party insurance coverage, the Indemnified Party shall promptly give notice thereof to the Indemnifying Party (a breach “Notice of Insurance”). If the Indemnifying Party so requests within 180 days after receipt of a Notice of Insurance, the Indemnified Party shall use its commercially reasonable efforts to collect the maximum amount of insurance proceeds thereunder, in which event all such proceeds actually received, net of costs reasonably incurred by the Indemnified Party in seeking such collection, shall be considered “Eligible Insurance Proceeds”. Any amount payable by an Indemnifying Party pursuant to this Article 10 shall be paid promptly and payment shall not be delayed pending any determination of Eligible Insurance Proceeds. In any case where an Indemnified Party recovers from a Third Party any Eligible Insurance Proceeds and/or any other amount in respect of any of Damages for which an Indemnifying Party has actually reimbursed such Indemnified Party pursuant to this Article 10, such Indemnified Party shall promptly pay over to the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating Indemnifying Party such Eligible Insurance Proceeds and/or the amount so recovered (after deducting therefrom the amount of Losses relating to any breach of any expenses incurred by it in procuring such recovery), but not in excess of the representations sum of
(i) any amount previously paid by the Indemnifying Party to or warranties, on behalf of the representations Indemnified Party in respect of such claim and warranties (ii) any amount expended by the Indemnifying Party in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence pursuing or defending any claim arising out of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesmatter.
(e) No Any Indemnified Party will be entitled shall take all commercially reasonable steps to indemnification to the extent mitigate any Damages incurred by such party upon and after becoming aware of any Losses event or condition that a court of competent jurisdiction has determined by final judgment would reasonably be expected to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking give rise to any indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)rights hereunder.
(f) Notwithstanding If the Indemnified Party receives any other provision payment from an Indemnifying Party in respect of this Agreement any Damages pursuant to Section 10.2(a) or Section 10.2(b) and the contraryIndemnified Party could have recovered all or a part of such Damages from a Third Party (a “Potential Contributor”) based on the underlying claim asserted against the Indemnifying Party, no Acquiror the Indemnified Party shall be entitled assign such of its rights to indemnification under this ARTICLE X for (i) any Losses proceed against the Potential Contributor as are necessary to permit the extent Indemnifying Party to recover from the Potential Contributor the amount of such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Partypayment.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will Any indemnity payment made hereunder shall be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized treated by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs Seller and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by Purchaser as an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal adjustment to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySettlement Amount.
(h) No Indemnified Party Any liability for any Damages shall be entitled to recover any amount relating to any matter arising under one provision determined without duplication of this Agreement to recovery by reason of the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event state of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect facts giving rise to such matter pursuant to that Damages constituting a breach of more than one representation, warranty, covenant or other provisions agreement of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Purchase and Assumption Agreement (BofI Holding, Inc.)
Limitations on Indemnification. (a) Notwithstanding An indemnifying party shall not have any Liability under:
(i) Section 10.2(a)(i) or Section 10.2(b)(i) hereof for any Losses with respect to the breach of any:
(A) General Survival Representations unless and until the aggregate amount of all such Losses exceeds an amount equal to $6,000,000 (the “General Deductible”), after which and, in such event, the indemnifying party shall, subject to the provisions of this ARTICLE XSection 10.5(b), be required to pay all Losses in excess of the General Deductible;
(iB) no Acquiror Title/Validity Representations unless and until the aggregate amount of all such Losses exceeds an amount equal to $2,000,000 (the “Title/Validity Deductible”), after which and, in such event, the indemnifying party shall, subject to the provisions of Section 10.5(b), be required to pay all Losses in excess of the Title/Validity Deductible; and
(C) Miscellaneous Extended Representations and Section 5.13 unless and until the aggregate amount of all such Losses exceeds an amount equal to $2,000,000 (the “Miscellaneous Deductible,” together with the General Deductible and the Title/Validity Deductible, collectively the “Representation Deductibles”), after which and, in such event, the indemnifying party shall, subject to the provisions of Section 10.5(b), be required to pay all Losses in excess of the Miscellaneous Deductible;
(ii) Section 10.2(a)(ix) hereof for any Losses with respect to any of the Liabilities described in clauses (ii) and (v) of BPP Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iLiabilities or in Sections 2.4(f) and 2.4(g) unless and until the aggregate amount of such Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to $50,000 2,000,000 (the “De Minimus AmountPre-Closing Business Deductible”), after which and, in such event, the indemnifying party shall be required to pay all Losses in excess of the Pre-Closing Business Deductible; provided, however, that neither the Pre-Closing Business Deductible nor any other Deductibles contained in this Agreement shall apply to any Losses arising out of, relating to or based upon any Indemnification Claim involving (A) any BPP Excluded Employee, (B) any LRFP Employee or OAR Employee that does not become a Transferring Employee and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to any Former LRFP Employees and Former OAR Employees and (C) any Employee (whether or not the Employee is a Former Employee or Transferring Employee) for retiree medical benefits under any Seller Welfare Plan or the Collective Bargaining Agreement; and
(iii) Section 10.2(a)(i10.2(a)(vii) to the extent hereof for any BPP Retained Contract Warranty Losses and Transferred Contract Warranty Losses unless and until the aggregate amount of all such Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled exceeds an amount equal to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 310,000 (the “Indemnification Product Warranty Deductible,” together with the Pre-Closing Business Deductible and the Representation Deductibles, collectively the “Deductibles”), after which and, in such event, the indemnifying party shall be required to pay all Losses in excess of the Product Warranty Deductible. For the avoidance of doubt, the Deductibles described above shall be mutually exclusive, shall only apply to the matters pertaining to the applicable Deductible and Losses for any individual matters shall not reduce the availability of more than one Deductible; provided, however, that upon the Purchaser Indemnified Parties or Seller Indemnified Parties, as applicable, incurring aggregate Losses subject to the Deductibles equal to $6,000,000 (the “Global Deductible”), and then only the Seller Entities or Purchaser, as applicable, shall be obligated to pay all Losses in excess of the extent Global Deductible irrespective of such excesswhether the individual Deductibles have been met for the applicable matter.
(b) Neither the Seller Entities nor Purchaser shall be required to indemnify any Person under Section 10.2(a)(i) or 10.2(b)(i), (ii) in no event shall the respectively, for an aggregate amount of Losses exceeding an amount equal to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 225,000,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed ) in connection with Losses related to the Purchase Price.
(b) Notwithstanding the provisions failure of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches any of the representations and warranties set forth in Company Fundamental Real Property Title Representation, the Title/Validity Representations, the Miscellaneous Extended Representations, the General Survival Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy5.13.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to To the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether there is a breach of any of the representations representation or warranties of Seller or Company has occurred and, if sowarranty contained in this Agreement, for purposes of calculating the amount of any Losses relating to be indemnified pursuant to Section 10.2(a)(i) or 10.2(b)(i) (and not for purposes of determining whether a breach has occurred), any materiality or Material Adverse Effect qualifications in the representations and warranties shall be ignored.
(d) For the avoidance of doubt:
(i) Neither the Deductibles nor the Cap shall apply to any claim for indemnification made pursuant to Section 10.2(a)(i) or 10.2(b)(i) with respect to any breach of any the Perpetual Representations and the Statute of the representations or warranties, the representations and warranties in this Agreement, except for Limitations Representations (other than Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events5.13), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.; and
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of Deductibles shall not apply to any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Lossesclaim for indemnification made pursuant to the Ancillary Agreements, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefromSections 10.2(a)(ii)-(vi) and (viii), 10.2(b)(ii)-(vi), 10.3 and Article XI; and
(iii) the Cap shall not apply to any other amounts actually received from a third party claim for indemnification made pursuant to indemnificationthe Ancillary Agreements, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of ReliefSections 10.2(a)(ii)-(ix), even if such entry into force or change has retroactive effect10.2(b)(ii)-(vi), 10.3 and Article XI.
Appears in 1 contract
Sources: Asset and Stock Purchase Agreement (Georgia Pacific Corp)
Limitations on Indemnification. (a) Notwithstanding Except as set forth in Sections 7.5(b) and 7.5(c), the provisions maximum amount an Indemnified Party may recover from a Company Holder individually pursuant to the indemnity set forth in Section 7.2 hereof for Losses shall be limited to an amount equal to the proceeds paid to such Company Holder out of the Merger Consideration (including the amount deposited into the Escrow Fund on behalf of such Company Holder and the amount of any taxes withheld from any payment made to such Company Holder).
(b) Nothing herein shall limit the liability of the Company for any breach or inaccuracy of any representation, warranty or covenant contained in this ARTICLE X, Agreement or any Related Agreement if the Merger does not close.
(c) The limitations of Section 7.5(a) shall not apply (i) no Acquiror Indemnified in the case of fraudulent misrepresentation by the Company or any of the Company Holders, (ii) to any Excess Third Party Expenses, (iii) to any Accounts Payable Balance Excess, (iv) to any Excess Indebtedness, (v) to any Company Holder Advanced Expenses (vi) to any Dissenting Share Payments or (vii) to any Specified Taxes.
(d) No amount shall be entitled payable to indemnification the Indemnified Parties under this Article VII for breaches or inaccuracies of representations or warranties of the Company and the Company Holders contained in this Agreement or in any certificate or other instruments delivered by the Company or the Company Holders pursuant to Section 10.2(a)(i) this Agreement unless and until the aggregate amount of Losses incurred by otherwise payable to the Indemnified Parties under this Article VII for such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) breaches and inaccuracies exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “CapBasket”). Seller’s aggregate liability under this ARTICLE X shall not exceed At such time as the Purchase Price.
(b) Notwithstanding total amount payable to the provisions of Section 10.4(a)Indemnified Parties exceeds the Basket, (i) in the De Minimus Amount and aggregate, the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party Parties shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until be indemnified against all Losses, including the amount of Losses incurred by such Acquiror Indemnified Party that are included in the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesBasket.
(e) No Indemnified Party will be entitled to indemnification Notwithstanding anything to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faithcontrary provided in this Agreement, gross negligence or willful misconduct all claims for indemnification shall be paid out of the party seeking indemnification (provided that Escrow Fund unless the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries Escrow Fund has been exhausted by prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)claims.
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Merger Agreement (Nanometrics Inc)
Limitations on Indemnification. With respect to indemnification claims brought against any Selling Equityholder pursuant to this ARTICLE VIII:
(a) Notwithstanding Subject to Section 8.11, the provisions maximum aggregate liability with respect to claims arising out of this ARTICLE X, Section 8.2(a) (iexcluding in the case of Fraud) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) limited to the extent the aggregate amount of all Losses incurred by all Indemnity Escrow Fund; provided that if Acquiror Indemnified Parties suffer Losses in excess of the limits of the R&W Policy that would have otherwise been covered by the R&W Policy but for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (Losses paid thereunder for Fraud, then the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X Section 8.6(a) of the Selling Equityholder that commits such Fraud shall be increased to that extent even if in excess of the Indemnity Escrow Fund; provided, however, in the event Fraud is committed by a Selling Equityholder and not a Group Company, the Acquiror may only seek to recover Losses for such Fraud from the Selling Equityholder committing such Fraud. Notwithstanding anything to the contrary set forth herein, in no instance will the liability of a Selling Equityholder pursuant to this Agreement (including Sections 5.10, 8.2 and 9.1) exceed the Purchase Pricetotal proceeds received by such Selling Equityholder hereunder.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible Acquiror Indemnified Parties shall not apply have the right to be indemnified pursuant to Section 8.2(a)(i) (excluding with respect to Losses relating Fraud or as it relates to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (viiRepresentations) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant shall have incurred, on a cumulative basis following the Closing, Losses in excess of $1,785,000 (the "Basket"), in which event the party with the right to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party indemnified shall only be entitled required to indemnification to the extent the aggregate amount of all pay or be liable for Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such in excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceBasket.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Merger Agreement (Q2 Holdings, Inc.)
Limitations on Indemnification. (a) Notwithstanding Except as provided in Section 9.5(f) and Section 9.5(g), the provisions of this ARTICLE X, (i) no Acquiror Selling Parties indemnification obligations to the Buyer Indemnified Party shall be entitled to indemnification pursuant to Parties under Section 10.2(a)(i) 9.1 will not commence unless and until the amount of Losses incurred by such Acquiror the Buyer Indemnified Party that are as a result thereof equals or exceeds in the subject of a claim (or any series of related claims) exceeds aggregate $50,000 104,480.00 (the “De Minimus Basket Amount”) and such Acquiror at which time the Selling Parties shall be obligated to indemnify the Buyer Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of Parties for all Losses incurred by all Acquiror the Buyer Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (from the “Indemnification Deductible”), and then only to the extent first dollar of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceLosses.
(b) Notwithstanding the provisions of Except as provided in Section 10.4(a9.5(f) and Section 9.5(g), (i) the De Minimus Amount and Buyer’s indemnification obligations to the Indemnification Deductible shall Seller Indemnified Parties under Section 9.2 will not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) commence unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Seller Indemnified Parties that are indemnifiable pursuant as a result thereof equals or exceeds in the aggregate the Basket Amount, at which time the Buyer shall be obligated to Section 10.2(a)(vi) exceeds $500,000, and then only to indemnify the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of Parties for all Losses incurred by all Seller Indemnified Parties from the first dollar of such Losses.
(c) Except as provided in Section 9.5(d), Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which such Seller Indemnified any of the Selling Parties are entitled to indemnification shall be liable for breaches of representations and warranties pursuant to Section 10.2(b9.1(a) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed $12,951,000.00 (the Purchase Price“General Cap Amount”).
(d) For purposes Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of determining whether a breach of Losses for which any of the representations or warranties Selling Parties shall be liable for breaches of Seller or Company has occurred andFundamental Representations, if so, for purposes of calculating the amount of Losses relating Special Representations and pursuant to any breach clause of any of Section 9.1 other than Section 9.1(a) shall not exceed $35,975,000.00 (the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events“Special Cap Amount”), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which the Buyer shall be entitled liable pursuant to indemnification Section 9.2 shall not exceed an amount equal to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)General Cap Amount.
(f) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, no Acquiror Indemnified Party Section 9.5(a), Section 9.5(b), Section 9.5(c), Section 9.5(d) and Section 9.5(e) shall not apply to Losses in connection with, incident to, resulting from or arising out of, directly or indirectly, Taxes, any intentional misrepresentation, fraud or criminal activity and such Losses shall not be entitled to indemnification under this ARTICLE X for (i) any Losses subject to the extent such Losses are reflected in Basket Amount and shall not be counted for purposes of determining whether the Closing Date Working Capital Statement General Cap Amount or (ii) punitive, consequential, indirect, incidental Special Cap Amount has been met or special damages, except to the extent any such damages are received by a third party from an Indemnified Partyexceeded.
(g) In determining Notwithstanding anything to the amount of any contrary contained herein, Section 9.5(a) shall not apply to Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationin connection with, the amount of any incident to, resulting from or arising out of, directly or indirectly, Floorplan Loan Liabilities, Compliance Liabilities, Employee Liabilities and such Losses will shall not be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal subject to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyBasket Amount.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (KAR Auction Services, Inc.)
Limitations on Indemnification. (a) Notwithstanding the provisions any other provision of this ARTICLE XArticle XI, Seller shall not be liable under Section 11.2(a)(i) unless and until the aggregate amount of all Losses pursuant to Section 5.2(b), Article VIII or Section 11.2(a) exceeds $200,000 (i) no Acquiror the "THRESHOLD AMOUNT"); provided, however, the Threshold Amount will not apply with respect to any Losses for which a Purchaser Indemnified Party shall be is entitled to indemnification pursuant to Section 10.2(a)(i11.2(a)(i) unless and until arising from or caused by a breach of the representations or warranties set forth in Section 3.5, Section 3.7(b), Section 3.17 or Section 3.24. Upon reaching such amount, Seller shall be liable to the Purchaser Indemnified Parties for all Losses under Section 11.2(a)(i) up to an aggregate amount of equal to $13,000,000 (the "MAXIMUM AMOUNT"); provided, however, the Maximum Amount will not apply with respect to any Losses incurred by such Acquiror for which a Purchaser Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be is entitled to indemnification pursuant to Section 10.2(a)(i11.2(a)(i) to arising from or caused by a breach of the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to representations or warranties set forth in Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”3.5, Section 3.7(b), Section 3.17 or Section 3.24, and then only to the extent none of such excessLosses shall count towards satisfaction of the Maximum Amount; provided, (ii) further, in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate 's liability under this ARTICLE X shall not Article XI exceed the Purchase Price.
(b) Notwithstanding the provisions any other provision of Section 10.4(a)this Article XI, (i) the De Minimus Amount and the Indemnification Deductible Purchaser shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or be liable under Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii11.2(b)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all pursuant to Article VIII or Section 11.2(b) exceeds the Threshold Amount. Upon reaching such amount, Seller shall be liable to the Purchaser Indemnified Parties for which such Seller Indemnified Parties are entitled all Losses under Section 11.2(b)(i) up to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only an aggregate amount equal to the extent of such excess and (ii) Maximum Amount; provided, however, in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate Purchaser's liability under this ARTICLE X shall not Article XI exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party the indemnification provided for in Section 11.1 and Section 11.2 shall be entitled subject to the following limitations:
(a) ▇▇▇▇▇▇ shall not be liable to the FFI Indemnitees for indemnification under this ARTICLE X for Section 11.2(a) until the aggregate amount of all Losses sustained by the FFI Indemnitees under Section 11.2(a) exceeds an amount equal to one percent (1.0%) of the Total Purchase Price then paid by FFI (the “Deductible”); provided, however, that the Deductible shall not apply to Losses that are due to or arise out of (i) any Losses to Fraud or willful and intentional misconduct by ▇▇▇▇▇▇, PHH Parent, or the extent such Losses are reflected in the Closing Date Working Capital Statement Company, or (ii) punitivea breach of Fundamental Representations of ▇▇▇▇▇▇ or PHH Parent (collectively, consequentialthe “Nikola Excluded Matters”). The aggregate amount of all Losses for which ▇▇▇▇▇▇ shall be liable pursuant to Section 11.2(a) shall not exceed [*] percent ([*]%) of the Total Purchase Price then paid by FFI (the “Cap”); provided, indirecthowever, incidental that the Cap shall not apply to Losses that are due to or special damages, except to arise out of the extent any such damages are received by a third party from an Indemnified PartyNikola Excluded Matters.
(gb) In determining FFI shall not be liable to the Company Indemnitees for indemnification under Section 11.1(a) until the aggregate amount of any all Losses sustained by the Company Indemnitees under Section 11.1(a) exceeds the Deductible; provided, however, that the Deductible shall not apply to Losses that are due to or arise out of (i) FFI’s Fraud or willful and intentional misconduct, or (ii) a breach of Fundamental Representations of FFI (collectively, the “FFI Excluded Matters”). The aggregate amount of all Losses for which FFI shall be liable pursuant to Section 11.1(a) shall not exceed the Indemnified Parties Cap; provided, however, that the Cap shall not apply to Losses that are entitled due to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising arise out of or in connection with the incurrence of the Losses for which indemnity is sought, FFI Excluded Matters.
(iic) the amount of any insurance proceeds from a third-party insurer actually received by such Nothing herein shall be deemed to affect an Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant Person’s obligation to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all any indemnifiable Loss to the extent required by applicable Law.
(d) The amount of any Losses which are indemnifiable or payable under this Article XI by an Indemnifying Person shall be net of any amounts actually recovered by the Indemnified Person in respect of such Losses under applicable insurance policies or from any other third party alleged to be responsible therefor; provided, that no Indemnified Person shall be required to pursue available insurance or other claims in respect of any Losses for which such Indemnified Parties are entitled indemnification or may be entitled to indemnification payment is sought under this ARTICLE X. In Article XI. If the event that Indemnified Person actually recovers any amounts under applicable insurance proceedspolicies, Tax benefits, Relief or other amounts from any other third party are actually recovered or realized by an Indemnified Party alleged to be responsible for any Losses, subsequent to receipt by such Indemnified Party of any an indemnification payment hereunder in respect of by the claims to which Indemnifying Person, then the Indemnified Person receiving such insurance proceeds, Tax benefits, Relief or other amounts relate, a payment shall promptly reimburse the Indemnifying Person for any portion of such indemnification payment equal which would not have been payable pursuant to the amounts so operation of the immediately preceding sentence had such payment been made after the Indemnified Person had recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover such other amount, net of any amount relating to any matter arising under one provision of this Agreement to the extent expenses reasonably incurred by such Indemnified Party (or other Acquiror Indemnified Parties Person in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered collecting such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding including any other provision of this Agreement to deductible amounts, attorney’s fees, and any increased insurance premiums). If the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X Person receives payment from an Indemnifying Person in respect of any Losses that fully compensates for such Loss and the Indemnified Person would reasonably have been expected to have been able to recover all or a part of such Losses from a third party based on the underlying claim asserted against the Indemnifying Person, the Indemnified Person shall assign such of its rights to proceed against such third party as are necessary to permit the Indemnifying Person to recover from such third party the amount of such indemnification payment.
(e) No Indemnifying Person shall be liable under this Article XI for Losses that are for special or consequential damages, lost profits, lost opportunity, or lost revenue, or damages based on a multiple, or for Losses which occur are exemplary, except, in each case, (i) to the extent any such Losses are for the reasonably foreseeable result of the applicable breach of this Agreement, (ii) in the case of Fraud or willful and intentional misconduct, or (iii) to the extent an Indemnified Person pays to a Third Party any such Losses that are increased awarded to such Third Party, in each of which case such Losses shall be recoverable by such Indemnified Person pursuant to the applicable indemnity set forth in this Article XI.
(f) An Indemnified Person shall be entitled to seek recovery under such provisions of this Agreement that maximize its recovery (e.g., if Losses would be time barred under Section 11.6(a) if a Claim were made under one provision but would not be time barred if made under another provision or if Losses would not be recoverable under Section 11.2(a) as a result of a dollar limitation but would be recoverable under the entry into force ofindemnification included in Section 11.2(d) without such dollar limitation, then the Indemnified Person may seek recovery under the provision that is not time barred or any change in, after the Closing Date, any Law or any practice not subject to limitation) but in no event will an Indemnified Person be entitled to double recovery in respect of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectparticular Losses.
Appears in 1 contract
Sources: Membership Interest and Asset Purchase Agreement (Nikola Corp)
Limitations on Indemnification. (a) Notwithstanding All of the provisions representations and warranties of the parties contained in Article IV, Article V and Article VI and all claims and causes of action for indemnification under this Article IX with respect thereto shall survive the termination of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification Agreement pursuant to Section 10.2(a)(i10.1 hereof or otherwise for twelve (12) months after the Closing Date (such period, the “General Survival Period”); provided that the representations and warranties contained in Section 4.19 (Taxes) and all claims and causes of action for indemnification under this Article IX with respect thereto shall survive such termination for a period of the applicable statute of limitation (such period, the “Tax Survival Period”, and together with the General Survival Period, each a “Survival Period”). After the expiration of the applicable Survival Period, none of the Sellers, the Buyer or any of their respective officers, directors, trustees, members, limited partners, general partners or Affiliates shall be under any liability whatsoever with respect to the applicable representations or warranties contained in this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement and subject to the limitations in this Section 9.4, indemnification under Section 9.1 shall not be available unless and until the amount of Indemnifiable Losses incurred by such Acquiror Indemnified Party that are asserted against Sellers, under Section 9.1 equals or exceeds (i) an amount equal to $350,000 resulting from any single claim or aggregated claims arising out of the subject of a claim (same or any series of related claims) exceeds $50,000 similar facts, events or circumstances (the “De Minimus AmountPer Claim Deductible”), and (ii) and such Acquiror Indemnified Party an amount equal to $3,000,000 in the aggregate (the “Deductible”). Once the Deductible has been exceeded, the Buyer Indemnitees shall only be entitled to indemnification pursuant to the benefit of the indemnity under Section 10.2(a)(i) 9.1 for any claim that exceeds the Per Claim Deductible to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) claims is in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches excess of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a)Deductible, Section 10.2(a)(ii)subject, (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)however, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyIndemnification Cap.
(c) Notwithstanding With respect to all claims made under this Agreement, the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the maximum aggregate amount of all Indemnifiable Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to that may be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X recovered shall not exceed 10% (ten percent) of the Purchase PricePrice (the “Indemnification Cap”).
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, the parties agree that the recovery by any Indemnified Party of any damages suffered or incurred by such Indemnified Party as a result of any breach by another party of any of its obligations under this Agreement shall be limited to the actual damages suffered or incurred by an Indemnified Party as a result of the breach by the breaching party of its obligations hereunder and in no Acquiror event shall the breaching party be liable to an Indemnified Party for any indirect, consequential, special, exemplary or punitive damages (including any damages on account of lost profits or opportunities) suffered or incurred by an Indemnified Party as a result of the breach by the breaching party of any of its obligations hereunder.
(e) Notwithstanding any provision to the contrary contained in this Agreement, in the event that an Indemnifying Party can establish that an Indemnified Party had actual knowledge after due inquiry, on or prior to the Closing Date, of a breach of a representation or warranty of the Indemnifying Party upon which a claim for indemnification by the Indemnified Party is based, then the Indemnifying Party shall have no liability for any Indemnifiable Losses resulting from or arising out of such claim.
(f) The amount of any Indemnifiable Losses claimed by any Indemnified Party hereunder shall be net of any available insurance, indemnity, contribution, net Tax benefit or other payments or recoveries of a like nature with respect thereto (it being agreed that, promptly after the realization of any such reductions of Indemnifiable Losses pursuant hereto, such Indemnified Party shall be entitled to indemnification under this ARTICLE X reimburse the Indemnifying Party for (i) any such reduction in Indemnifiable Losses for which such Indemnified Party was indemnified prior to the extent realization of such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Partyreductions of Indemnifiable Losses).
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by If an Indemnified Party subsequent recovers Indemnifiable Losses from an Indemnifying Party under this Article IX, the Indemnifying Party shall be subrogated, to receipt by the extent of such recovery, to the Indemnified Party Party’s rights against any third party, with respect to such recovered Indemnifiable Losses subject to the subrogation rights of any indemnification payment hereunder in respect insurer providing insurance coverage under one of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal Indemnified Party’s policies and except to the amounts so recovered or realized shall promptly be refunded extent that the grant of subrogation rights to the Indemnifying PartyParty is prohibited by the terms of the applicable insurance policy.
(h) No The amount of any Indemnifiable Losses claimed by any Buyer Indemnified Party hereunder shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement reduced to the extent such Indemnified Party (or other Acquiror Indemnified Parties that Buyer shall have received the benefit of an adjustment pursuant to Section 2.3 due to the fact that the item that is the subject of the indemnification claim was specifically taken into account in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementfinal Post-Closing Net Working Capital Statement.
(i) Notwithstanding any other provision of this Agreement anything to the contrarycontrary in this Agreement, in no Acquiror Indemnified Party case shall be entitled to Sellers owe any indemnification under this ARTICLE X in Section 9.1 with respect to any breach or inaccuracy of any Losses which occur or are increased as a result of the entry into force ofrepresentations or warranties contained in Section 4.12, or (i) except to the extent any change in, after Indemnifiable Losses were incurred to comply with applicable Environmental Law as of the Closing Date; (ii) to the extent any Release of Hazardous Materials, any non-compliance with Environmental Law or any practice other condition forming the basis of any Governmental Authority Indemnifiable Losses was contributed to or exacerbated by the Buyer Indemnitees; or (including iii) to the extent any increase Indemnifiable Losses result from or arise out of (y) any change subsequent to the Closing Date in the Tax rates use of the Business or the plants or other facilities or properties constituting the Business or (z) any new Tax voluntary investigation, reporting, cleanup or other voluntary remedial activity by any withdrawal of Relief), even if such entry into force or change has retroactive effectBuyer Indemnitee.
Appears in 1 contract
Sources: Limited Liability Company Membership Interests and Stock Purchase Agreement (Dynegy Holdings Inc)
Limitations on Indemnification. (a) Notwithstanding The Indemnitees shall not be entitled to assert a claim for indemnification from the holders of Outstanding Company Shares under the provisions of this ARTICLE XSections 9.1 or 9.2, (i) no Acquiror Indemnified Party respectively, until such time as the claims subject to indemnification exceed, in the aggregate, $50,000 in Damages, at which time all such claims may be asserted in full from the first dollar thereof; provided, however, that during the first year after the Effective Time, and if all of the Escrow Shares have been released to Parent pursuant to Section 9.6, the Indemnitees shall not be entitled to assert a claim for indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the claims subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to exceed, in the extent aggregate, an additional $250,000, at which time all such claims may asserted in full from the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricefirst dollar thereof.
(b) Notwithstanding The Escrow Shares shall be the provisions sole source of recovery of Damages pursuant to Section 10.4(a9.1, except for breaches of Sections 3.16, and 3.20, criminal conduct by the Company or any of its officers, directors or employees constituting a felony under federal or state law ("Criminal Conduct"), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with or fraud. With respect to Losses relating the recovery of Damages pursuant to Section 9.1 arising out of liabilities related to breaches of Sections 3.16 and 3.20 and Criminal Conduct, any such recovery shall not exceed $8,000,000 in the aggregate, which will be first satisfied pursuant to Section 9.4 and thereafter shall be paid in cash.
(c) The representations and warranties set forth in Article III shall survive the Closing for a period of one year from the Closing Date, except that (a) the representations and warranties set forth in Company Fundamental Representations or Section 3.15 3.16 shall survive the Closing for a period of three years from the Closing Date and (Taxes); (iib) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party 3.20 shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and survive until the amount all applicable statutes of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party limitations shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Caphave expired; provided that the De Minimus Amount, the Indemnification Deductible and the Cap any such expiration of time shall not apply with respect affect a claim for indemnification made prior to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricesuch expiration.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), There shall be read without giving effect no time limit pursuant to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to Parent can assert a claim for indemnification, Damages arising from Criminal Conduct or fraud unless the amount of any time for making such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant claim has expired according to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyapplicable law.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding In the provisions event that any Loss is calculated by reference to the aggregate liabilities, losses or damages incurred or suffered by Atrium or the Fojt▇▇▇▇ ▇▇▇panies, rather than by reference to the liabilities, losses or damages incurred or suffered individually by a shareholder of Atrium, Atrium and/or FCI shall only be required to indemnify the Bish▇▇ ▇▇▇ders for that portion of any such Loss which is equal to the product of (A) the aggregate amount of such Loss multiplied by (B) a fraction, the numerator of which is the total number of shares of common stock of Atrium on a fully-diluted basis, and the denominator of which is the total number of shares of common stock of Atrium then owned by the Bish▇▇ ▇▇▇ders. For the avoidance of doubt, this ARTICLE XSection 11.6(a) shall not operate to reduce the amount payable to the Bish▇▇ 18 Holders or any of them with respect to any Loss which has been directly suffered or incurred by any Bish▇▇ ▇▇▇der.
(b) No Indemnifying Party shall be required to indemnify an Indemnified Party hereunder except to the extent that the aggregate amount of Losses for which the Indemnified Party is otherwise entitled to indemnification pursuant to this Section 11 exceeds $250,000, (i) no Acquiror whereupon the Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(ibe paid the excess of (i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all such Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, over (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only subject to the extent overall limitation on maximum amount of such excessrecovery set forth in Section 11.6(c) below; provided, however, that Losses related to or arising directly or indirectly out of any inaccuracies in any representation or warranty made by any of the Bish▇▇ ▇▇▇ders in Section 3.4 or by any of the FCI Holders in Section 4.4 (vcollectively, "Unlimited Claims") no Acquiror Indemnified Party shall be entitled indemnified in their entirety by the applicable Bish▇▇ ▇▇▇der or FCI Holder, as the case may be, and shall not be subject to indemnification pursuant the limitations as to amount set forth in this Section 10.2(a)(vi11.6(b) until or the aggregate limitation on maximum amount of Losses incurred by recovery set forth in Section 11.6(c) below, or (in the Acquiror Indemnified Parties that are indemnifiable pursuant case of an Unlimited Claim against any Bish▇▇ ▇▇▇der) the limitations as to recourse referred to in Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy11.7 below.
(c) Notwithstanding Subject to the provisions first sentence of this ARTICLE XSection 11.7 and notwithstanding anything else to the contrary otherwise stated herein or in any other Transaction Document, the aggregate amount actually payable by either (i) Atrium and/or FCI as an Indemnifying Party on the one hand or (ii) the Sellers as Indemnifying Parties on the other hand pursuant to this Section 11 and Section 13 of the Purchase Agreement, with respect to all Claims against such Indemnifying Party or Indemnifying Parties, as the case may be, other than Unlimited Claims (as to which no Seller Indemnified Party such limit shall apply), shall in no event exceed $5,000,000 (as such amount may be entitled reduced from time to indemnification time pursuant to Section 10.2(b3(d) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceBuy-Sell Agreement).
(d) For purposes of determining whether No Indemnifying Party shall be liable for any Losses pursuant to this Section 11 unless a breach written claim for indemnification in accordance with Section 11.4 is given by the Indemnified Party to such Indemnifying Party with respect thereto within eighteen (18) months after the Closing, except that this time limitation shall not apply to any Losses related to or arising directly or indirectly out of any of the representations or warranties of Seller or Company has occurred andUnlimited Claims, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained which in any such representations and warrantieseach case the applicable statute of limitations shall apply.
(e) No Indemnified Party will be entitled may recover hereunder or under the Buy-Sell Agreement for any Loss as to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled Party has already received or may be entitled to is simultaneously receiving indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal pursuant to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Purchase Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Securities Exchange Agreement (H R Window Supply Inc)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party No action, claim or setoff for Damages subject to indemnification under this Section 7.5 shall be entitled available (x) with respect to any claim for Damages resulting from a breach of any representation or warranty contained in this Agreement, unless such claim is brought prior to the expiration of the survival period of such representation or warranty, (y) with respect to any claim for Damages resulting from a breach of any covenant the performance of which is to be made after the Closing Date, unless such claim is brought within six months of the expiration date for the performance of such covenant or (z) with respect to any claim for damages resulting from a breach of any covenant the performance of which is to be made on or prior to the Closing Date, unless such claim is brought on or before the date eighteen months from the Closing Date; PROVIDED, HOWEVER, that any claim made by the party seeking indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i"INDEMNIFIED PARTY") to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for party from which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 is sought (the “Indemnification Deductible”"INDEMNIFYING PARTY") within the time periods set forth above shall survive (and be subject to indemnification) until it is finally and fully resolved. The indemnification obligations of the respective parties set forth in Sections 7.5(a)(i)(C), (D), and then only to the extent of such excess(E) and 7.5(a)(ii)(C), (D), (E) and (F) hereof shall survive indefinitely.
(ii) in Notwithstanding anything herein to the contrary, no event indemnification shall the aggregate amount to be paid as indemnification pursuant to available under Section 10.2(a)(i), 7.5(a)(i)(A) or Section 7.5(a)(ii)(A) hereof (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches excluding any Damages arising from any breach of the representations and warranties set forth in Company Fundamental Representations Sections 3.1, 3.2(c), 3.18, 4.1, 4.5 and 4.6 hereof and as to the actual ownership of the Property (other than the Retained Property) (but not the quality of such ownership or Section 3.15 (Taxes); (ii) the Cap shall not apply existence of Liens with respect to Losses relating thereto)) unless and until the aggregate amount of Damages that would otherwise be subject to indemnification pursuant to Section 7.4(a7.5(a)(i)(A) or 7.5(a)(ii)(A) hereof ("BASKET LOSSES") exceeds $2 million (the "BASKET AMOUNT"); PROVIDED, HOWEVER, that in the event the Basket Losses exceed the Basket Amount the Indemnifying Party shall indemnify the Indemnified Party only for those Damages in excess of $1 million; PROVIDED FURTHER THAT any Damages arising from any breach of the representations and warranties of Seller in this Agreement or in the Seller's Closing Certificate that are qualified by references to "Subsidiary Material Adverse Effect" or to "materiality" (but not to "Material Adverse Effect" or "material adverse effect") and in respect of which the condition set forth in Section 10.2(a)(ii), 6.2(a) hereof would not have been satisfied but for the proviso to the first sentence of Section 6.2(a) hereof shall be excluded from the definition of Basket Losses.
(iii)) Notwithstanding anything herein to the contrary, (vi), (viiithe maximum aggregate liability of Seller under Section 7.5(a)(i)(A) or of Buyer under Section 7.5(a)(ii)(A) (ix) or to breaches excluding any Damages arising from any breach of the representations and warranties set forth in Company Fundamental Representations the first sentence of Section 3.1(a), 3.1(b), clauses (i) and (ii) of the second sentence of 3.2(a), 3.2(c), 3.18, 4.1, 4.5 and 4.6 and as to the actual ownership of the Property (other than the Retained Property) (but not the quality of such ownership or the existence of Liens with respect thereto) shall not exceed $20 million.
(iv) Notwithstanding anything herein to the contrary but except as otherwise provided in Section 3.15 (Taxes); (iii7.5(d)(i) no Acquiror Indemnified Party hereof, neither Buyer, its Affiliates, nor their respective Representatives shall be entitled to indemnification pursuant to Section 10.2(a)(ivby Seller for any Damages arising from either (A) or (vii) unless and until the amount any matter of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations persons listed in Section 7.5(b)(iv) of the Seller Disclosure Schedule had actual and specific knowledge prior to the execution of this Agreement or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to (B) any breach of any representation and warranty of the representations or warranties, the representations which Buyer had actual and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries specific knowledge prior to the Closing shall if Buyer was not affect Acquiror Indemnified Parties’ indemnification rights)required, pursuant to Article VI hereof, to close but nevertheless closed.
(fv) Notwithstanding Any calculation of Damages for purposes of indemnification pursuant to this Section 7.5 shall be net of (a) any other provision of this Agreement actual Tax Benefit (as hereafter defined) to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for arising from such Damages and (ib) any Losses to insurance reimbursement in respect of Damages actually received by the extent such Losses are reflected in the Closing Date Working Capital Statement or Indemnified Party (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages proceeds must be repaid by the Indemnified Party through adjustments to past, present or future insurance premiums, which adjustments are received directly caused by a third party from an Indemnified Partythe payment of such insurance reimbursement in respect of Damages).
(gvi) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal Notwithstanding anything herein to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party contrary, neither Buyer, its Affiliates, nor their respective representatives shall be entitled to recover any amount relating to indemni- fication for any matter arising under one provision of this Agreement if and to the extent such Indemnified Party (reflected or other Acquiror Indemnified Parties included in a reserve or as a liability on the Final Closing Balance Sheet(other than those matters reflected or included in the event liabilities or reserves set forth in Section 1.2(a) of an Acquiror Indemnified Partythe Seller Disclosure Schedule, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party which Buyer shall not be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Reliefindemnification), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (Figgie International Inc /De/)
Limitations on Indemnification. (a) Notwithstanding The rights of the Parent Indemnified Parties and the Securityholder Indemnified Parties to indemnification pursuant to the provisions of this ARTICLE XArticle VIII are subject to the following limitations, notwithstanding anything in this Agreement to the contrary:
(ia) no Acquiror No individual claim for indemnification by any Parent Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i8.02(a) unless and until the amount of Losses incurred or by such Acquiror any Securityholder Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party 8.03 shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) asserted unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred that would be payable pursuant to such claim exceeds an amount equal to $20,000 (the “Mini-Basket”) (it being understood that any such individual claims for amounts less than the Mini-Basket shall be ignored in determining whether the Deductible (as defined below) has been exceeded and thereafter;
(b) No claims for indemnification by the Acquiror any Parent Indemnified Parties that are indemnifiable Party pursuant to Section 10.2(a)(vi8.02(a) exceeds $500,000shall be asserted, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Parent Indemnified Party shall be entitled to recover any Losses in respect of any indemnification claim made pursuant to Section 8.02(a), unless and until the aggregate amount relating of Losses that would otherwise be payable pursuant to any matter arising under one provision Section 8.02(a) exceeds on a cumulative basis an amount equal to $250,000 (the “Deductible”), and if the amount of this Agreement Losses suffered or paid by the Parent Indemnified Parties shall exceed the amount of the Deductible, the Parent Indemnified Parties shall only be permitted to recover from the General Indemnity Escrow Amount the amount of Losses that exceed the Deductible until such excess amount equals $250,000, following which the Parent Indemnified Parties shall only be permitted to recover from the General Indemnity Escrow Amount fifty percent (50%) of the amount of all such Losses that exceed $500,000 on a cumulative basis, but subject in all cases to the extent such other terms set forth in this Article VIII; provided, however, that this Section 8.04(b) shall not apply to Losses suffered or paid by any Parent Indemnified Party as a result of the breach of any of the Company Fundamental Representations or Section 3.08, it being agreed that, in such circumstances, the applicable Parent Indemnified Party shall, subject to the other limitations set forth in this Article VIII, be entitled to be indemnified and held harmless from the General Indemnity Escrow Amount from the first dollar of such Losses;
(or other Acquiror c) No claims for indemnification by any Securityholder Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter Party pursuant to that or other provisions of this Agreement.
(iSection 8.03(a) Notwithstanding any other provision of this Agreement to the contraryshall be asserted, and no Acquiror Securityholder Indemnified Party shall be entitled to indemnification under this ARTICLE X recover any Losses in respect of any indemnification claim made pursuant to Section 8.03(a), unless and until the aggregate amount of Losses that would otherwise be payable pursuant to Section 8.03(a) exceeds on a cumulative basis an amount equal to the Deductible, and if the amount of Losses suffered or paid by the Securityholder Indemnified Parties shall exceed the amount of the Deductible, the Securityholder Indemnified Parties shall only be permitted to recover the amount of Losses that exceed the Deductible until such excess amount equals $250,000, following which occur the Securityholder Indemnified Parties shall only be permitted to recover fifty percent (50%) of the amount of all such Losses that exceed $500,000 on a cumulative basis, but subject in all cases to the other terms set forth in this Article VIII; provided, however, that this Section 8.04(c) shall not apply to Losses suffered or are increased paid by any Securityholder Indemnified Party as a result of the entry into force ofbreach of any of the Parent Fundamental Representations, it being agreed that, in such circumstances, the applicable Securityholder Indemnified Party shall, subject to the other limitations set forth in this Article VIII, be entitled to be indemnified and held harmless from the first dollar of such Losses;
(d) The sole and exclusive source of recovery in respect of any indemnification claim made by any Parent Indemnified Party pursuant to (i) Section 8.02(a) shall be the General Indemnity Escrow Amount (it being agreed that the Parent Indemnified Parties shall also have recourse to the Special Policy in respect of any such indemnification claim), (ii) Section 8.02(b) shall be the Tax Indemnity Escrow Amount, (iii) Section 8.02(c) shall be the Litigation Indemnity Escrow Amount, and (iv) Section 8.02(d)) shall be the Appraisal Indemnity Escrow Amount. In no event shall (i) any Securityholder or any Affiliate thereof or any other Person have any direct liability or obligation in respect of any such indemnification claim, or (ii) the Parent Indemnified Parties be entitled to recover any change inLosses in respect of any indemnification claim made pursuant to this Article VIII from any source other than the applicable Indemnity Escrow Account (and the Special Policy with respect to claims made pursuant to Section 8.02(a)), after subject to Section 8.08, it being agreed that on the Closing Datedate (if any) an Indemnity Escrow Amount is reduced to zero (0) for any reason (including due to the release of the applicable Indemnity Escrow Amount from the applicable Indemnity Escrow Account on the applicable Escrow Release Date in accordance with the terms of the Escrow Agreement), the Parent Indemnified Parties shall have no further rights to indemnification from the Securityholders pursuant to this Article VIII (except to the Special Policy solely with respect to claims made pursuant Section 8.02(a)).
(e) The maximum aggregate Losses indemnifiable pursuant to Section 8.03(a) shall be an amount equal to $500,000;
(f) The amount of any Law Loss subject to indemnification under Sections 8.02 or 8.03 shall be calculated net of any insurance proceeds or any practice indemnity, contribution or other similar payment recoverable by the Indemnitee from any third party with respect thereto, other than the Special Policy. If the Indemnitee receives a Tax Benefit due to the indemnity payment, the Indemnitee shall promptly pay to the Indemnitor, the amount of any Governmental Authority (including any increase such Tax Benefit at such time or times as and to the extent that such Tax Benefit is realized by the Indemnitee, for the taxable year of such indemnity payment and, if any, for two taxable years thereafter, but in no event shall the Tax rates or any new Tax or any withdrawal amount of Relief), even if such entry into force or change has retroactive effect.payment to the Indemnitor exceed the amount of the
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Limitations on Indemnification. (a) Notwithstanding Except as provided in Section 7.3(e), each party's obligation to indemnify the provisions of this ARTICLE Xother for Losses arising under Section 7.1(a) or Section 7.2(a), as the case may be, shall be limited as to amount, as follows:
(i) no Acquiror Indemnified Party The Indemnitor (as defined in Section 7.4) shall not be entitled required to indemnification pursuant indemnify the Indemnitee (as defined in Section 7.4) for any Losses except to Section 10.2(a)(i) unless and until the extent that the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled Losses, when added to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all other Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) indemnifiable under Article VII, exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, 25,000;
(ii) in no event shall To the extent that the amount of any Losses, which when added to the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability of all other Losses indemnifiable under this ARTICLE X Article VII exceeds $25,000, the Indemnitor shall not exceed indemnify the Purchase PriceIndemnitee for such Losses in excess of $25,000.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations Any indemnifiable liability or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party reimbursement under this Article VII shall be entitled limited to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred sustained by such Acquiror Indemnified Party that are the subject Indemnitee net of a claim (or any series of related claims) exceeds $250,000, and then only applicable insurance payment made to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyIndemnitee.
(c) Notwithstanding Except for the provisions representations and warranties of this ARTICLE X, the Seller contained in (ia) no Seller Indemnified Party Section 2.30 (Export Controls) (which shall be entitled to indemnification pursuant to Section 10.2(b) unless and survive until the amount second anniversary of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(bClosing Date) exceeds the Indemnification Deductible, and then only to the extent of such excess and (iib) in no event Section 2.4(a) (Ownership and Condition of Assets) and Section 2.8 (Tax Matters) (which shall survive the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed fourth anniversary of the Cap; provided that the De Minimus AmountClosing Date), the Indemnification Deductible representations and warranties of the Seller set forth in this Agreement or in any instrument or document furnished in connection herewith shall survive the Closing and the Cap consummation of the transactions contemplated hereby and continue until the first anniversary date of the Closing Date and shall not apply be affected by any examination made for, by or on behalf of the Buyer. After such period, the Seller shall have no further liability hereunder with respect to Losses relating such representations and warranties except that if a notice is given in accordance with the Escrow Agreement before expiration of such period, then (notwithstanding the expiration of such time period) the representation or warranty applicable to indemnification pursuant to Section 7.4(i) or to breaches such claim shall survive until, but only for purposes of, the resolution of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricesuch claim.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the The representations and warranties of the Buyer set forth in this AgreementAgreement or in any instrument or document furnished in connection herewith shall survive the Closing and the consummation of the transactions contemplated hereby and continue until the first anniversary date of the Closing Date. If a notice is given in accordance with this Agreement before expiration of such period, except then (notwithstanding the expiration of such time period) the representation or warranty applicable to such claim shall survive until, but only for purposes of, the resolution of such claim; provided, it being understood by the Parties that nothing contained in this Section 3.7 7.3(d) limits the rights of the Seller under Sections 7.2(b), (Financial Statementsc) and Section 3.9 (Absence d) after the first anniversary date of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesthe Closing Date.
(e) No Indemnified Party will be entitled to indemnification Notwithstanding anything to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from contrary herein, the bad faith, gross negligence or willful misconduct aggregate liability of the party seeking indemnification Seller (provided that the bad faithincluding its directors, gross negligence or willful misconduct of Sellerofficers, Company or any of its Subsidiaries prior to the Closing employees, shareholders and Affiliates) for Losses under this Article VII shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision exceed the Escrow Fund. Except with respect to claims based on fraud or claims for failure to close the transactions contemplated by this Agreement by reason of a breach of this Agreement to Agreement, the contrary, no Acquiror Indemnified Party rights of the Indemnitors under this Article VII shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence sole and exclusive remedy of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds Buyer with respect to claims resulting from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision misrepresentation, breach of warranty or failure to perform any covenant or agreement of the Seller contained in this Agreement or any Ancillary Agreements and any other claims whether at law or equity to the extent such Indemnified Party (seek contribution, cost recovery, damages or other Acquiror Indemnified Parties in recourse of remedy from the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementSeller.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (ai) Notwithstanding the provisions of this ARTICLE XSection 8, (iA) no Acquiror there shall not be any indemnification under Section 8(a)(i)(A) for any breach of a representation and warranty or Section 8(a)(i)(E) for Damages in connection with the Actions in Section 4(a)(xii) of the Company Disclosure Letter unless and until the aggregate amount of Damages exceeds five hundred thousand dollars ($500,000.00) (the “Threshold Amount”), and thereafter the Purchaser Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall thereunder only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent for the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to liability in excess of the Threshold Amount; (B) there shall be any indemnification pursuant to Section 10.2(a)(iunder Sections 8(a)(i)(A) exceeds $3,550,000 (or 8(a)(i)(E) only if the “Indemnification Deductible”), and then only amount of Damages with respect to the extent applicable claim or series of related or substantially similar claims exceeds twenty thousand dollars ($20,000.00) (with such excess, (ii) in no event shall excluded claims not counted toward the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(iThreshold Amount), (iv), (v) ; and (viiC) exceed $35,500,000 (for the “Cap”). Seller’s aggregate liability under this ARTICLE X avoidance of doubt, there shall not exceed be any indemnification under Sections 8(a)(i)(A) or 8(a)(i)(E) for any amount in excess of the Purchase Price.
(b) Notwithstanding Escrow Amount; provided, however, that the provisions foregoing limitations of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible this subsection shall not apply with respect to Losses relating to breaches the liability for a breach of the representations and warranties set forth in Sections 4(a)(iii), 4(a)(xxiv), 4(b)(i), 4(b)(ii), 4(b)(iv), 4(b)(viii), 4(b)(x), 4(b)(xi) and 4(b)(xii) or of the representations and warranties of the signatories to the Company Fundamental Representations Stockholder Approval that are set forth in the Company Stockholder Approval. Notwithstanding the provisions of this Section 8, (A) the Purchaser shall not be liable under Section 8(b)(i) for any breach of a representation and warranty unless and until the aggregate amount of Damages exceeds the Threshold Amount, and thereafter the Seller Indemnified Parties shall be entitled to indemnification thereunder only for the aggregate amount of such liability in excess of the Threshold Amount; (B) Purchaser shall be liable under Section 8(b)(i) only if the amount of Damages with respect to the applicable claim or Section 3.15 series of related or substantially similar claims exceeds twenty thousand dollars (Taxes$20,000.00) (with such excluded claims not counted toward the Threshold Amount); and (iiC) Purchaser shall not be liable under Section 8(b)(i) for any amount in excess of the Cap Escrow Amount; provided, however, that the foregoing limitations in clauses (A) and (B) of this second sentence of this subsection shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches the liability for a breach of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial StatementsSections 4(c)(iii) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights4(c)(xi)(A).
(fii) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party Any indemnity payment made hereunder shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized reduced by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a unaffiliated third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or proceeds realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal and paid to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (net of any related costs and expenses, including any correspondent increase in insurance premiums or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementcharge backs).
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror No Parent Indemnified Party or Seller Indemnified Party shall be entitled to assert any claim for indemnification pursuant to Section 10.2(a)(i9.1, or Section 9.2, as applicable, unless such claim is asserted by a written notice given by such party in accordance with the terms hereof prior to the close of business on the date of expiration of the applicable survival period set forth in Section 9.5, in which case the representation, warranty, covenant or agreement which is the subject of such claim and any related claims arising from such claim shall survive, to the extent of such claims only, until such claims are resolved, whether or not the amount of Losses resulting from such claim has been finally determined at the time the notice is given. Notwithstanding anything in this Agreement to the contrary, (i) Parent Indemnified Parties shall not be entitled to assert any claim for indemnification under Section 9.1(a) unless and until the amount of aggregate liability for Losses incurred suffered by such Acquiror Parent Indemnified Party that are the subject of a claim (or any series of related claims) Parties thereunder exceeds $50,000 150,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X Seller Indemnified Parties shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to assert any claim for indemnification pursuant to under Section 10.2(a)(iv) or (vii9.2(a) unless and until the amount of aggregate liability for Losses incurred suffered by such Acquiror the Seller Indemnified Party that are Parties thereunder exceeds the subject of a claim (or any series of related claims) exceeds $250,000Deductible, and then only to the extent of such excess; , (iviii) no Acquiror Indemnified Party shall be entitled to claim for indemnification pursuant to Section 10.2(a)(v9.1 may be asserted with respect to any Loss suffered by Parent Indemnified Parties to the extent (and only to the extent) unless that such Loss has been reserved for in the consolidated balance sheets of the Company and until its Subsidiaries included in the Company Financial Statements (excluding any notes thereto), (iv) the aggregate liability of the Seller under Section 9.1(a) and of Parent and Unit Purchaser under Section 9.2(a) shall in no event exceed $1,000,000, and (v) the limitations set forth in Section 9.4(a)(i) - (iv) shall not apply in the event of a breach of any Fundamental Representation, a breach of Section 4.13 (Tax), indemnification pursuant to Section 9.1(c) or to Losses caused by fraud or willful misconduct (“Fraud”), provided, that, the maximum aggregate liability of the Seller resulting from a breach of Fundamental Representations of the Seller or the Company or a breach of Section 4.13 (Tax) or indemnification pursuant to Section 9.1(c) shall equal the value of the Aggregate Consideration actually received by the Seller. The express written waiver of any condition to the Closing based on the accuracy of any representation or warranty shall be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or warranty, covenant, agreement or obligation. In the event that a Parent Indemnified Party or Seller Indemnified Party makes a claim for indemnification, it shall use commercially reasonable and cost effective efforts to mitigate and/or remediate the loss, including by drawing on insurance policies to recover for such losses. Notwithstanding anything in this Agreement to the contrary, for purposes of determining the amount of any Loss related to such breach or misrepresentation, such representation or warranty shall be considered without regard to any “material,” “material adverse effect,” “Company Material Adverse Effect,” “Parent Material Adverse Effect” or other similar qualifications set forth therein.
(b) The amount of any Losses incurred by such Acquiror that any Parent Indemnified Party that are is entitled to receive pursuant to Section 9.1 shall be reduced (A) to reflect any Tax Benefit actually utilized, in the subject year in which the indemnity payment is required to be made or in any prior year, by Parent or Unit Purchaser or any of a claim their respective Subsidiaries, and (B) by any amounts actually recovered by Parent Indemnified Party (or any series of related claimsits Affiliates) exceeds an amount equal under insurance policies, indemnities or other reimbursement arrangements with respect to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)such Losses. Any Parent Indemnified Party shall waive, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000permitted under applicable insurance policies, and then only to any subrogation rights that the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) insurer might have with respect to any claim pursuant indemnifiable Losses. Parent Indemnified Parties shall have no right to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation assert any claims under this Article IX with respect to such any Losses that would have been covered by insurance had Parent maintained for the benefit of the Company (or caused the Company to maintain) the same insurance coverage following the Closing that was in effect for the Company immediately prior to Closing. To the extent that the claim with respect to which an indemnity obligation arises has not given rise to a Tax Benefit in a prior year or in the year in which the indemnity payment is to be made, but gives rise to a Tax Benefit in a later year, Parent Indemnified Party shall not exceed pay to the Seller the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions Tax Benefit. For purposes of this ARTICLE XAgreement, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until “Tax Benefit” means any deduction, amortization, exclusion from income or other allowance that actually reduces in cash the amount of Losses incurred by such Seller Indemnified Party Tax that are Parent or Unit Purchaser or any of their respective Subsidiaries would have been required to pay (or actually increases in cash the subject amount of such claim exceeds Tax refund to Parent or Unit Purchaser or any of their respective Subsidiaries would have been entitled) in the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification absence of the item giving rise to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representationsindemnity claim. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses any payment due to the Indemnifying Party pursuant to this Section 9.4, Parent or Unit Purchaser or any of their respective Subsidiaries shall be deemed to use all other deductions, amortizations, exclusions from income or other allowances of the Company or of any Subsidiary of the Company (to the extent that such deductions, amortizations, exclusions from income or other allowances are entitled to be used under applicable Tax law) prior to the use of any Tax Benefits in respect of which Parent or Unit Purchaser is obligated to pay the Indemnifying Party hereunder. The parties acknowledge and agree that, subject to Section 12.10, should the Closing occur, the sole and exclusive remedy of each party with respect to any and all claims relating to any breach of any representation, warranty or covenant made in this Agreement (other than claims of, or causes of action arising from, fraud or Willful or Intentional Breach) shall be governed by, and subject to, the terms and provisions set forth in this Article IX. In furtherance of the representations or warrantiesforegoing, the representations parties hereby waive, from and warranties after the Closing, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud or Willful or Intentional Breach) that it may have against the other parties or their respective Affiliates arising under or based upon any breach of any representation, warranty or covenant made in this AgreementAgreement (except pursuant to the indemnification provisions set forth in this Article IX and equitable remedies set forth in Section 12.10). Except to the extent actually paid to an unrelated third party, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), in no event shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will Parent be entitled to indemnification to recover or make a claim against the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company Seller or any of its Subsidiaries prior their Affiliates or Representatives, regardless of the legal theory under which such liability or obligation may be sought to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise, for any other provision amounts in respect of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special indirect damages, except to the extent any such lost profits, diminution in value or punitive damages are received by a third party from an Indemnified Party.
(g) In determining and, in particular, no “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Cardiome Pharma Corp)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Notwithstanding anything to the contrary herein, from and after the Closing, the liability of any Seller Indemnifying Party that commits fraud in connection with the Agreement or in any of the ancillary agreements, exhibits, schedules or certificates to, or delivered in connection with this Agreement, will not be limited in any manner with respect to such fraud committed by such Seller Indemnifying Party.
(ii) Except in the case of fraud, the Buyer Indemnified Parties, as a group, may not recover any Damages pursuant to a Buyer Indemnification Claim (A) under Sections 9.2(a)(i), 9.2(a)(iii), Section 9.2(b)(i) or 9.2(b)(iii) unless and until the Buyer Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $1,500,000 in Damages in the aggregate (the “Basket Amount”), and (B) under Sections 9.2(a)(vi) or 9.2(b)(v) unless and until the Buyer Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $150,000 in Damages in the aggregate, in each which case the Buyer Indemnified Parties shall be entitled to recover all Damages paid, incurred, suffered or sustained by the Buyer Indemnified Parties as a group (from the first dollar, but subject to the other limits in this Section 9.2(c).
(iii) Subject to Section 9.2(c)(i), the liability of each (x) Seller Indemnifying Party who is either (i) a Company Shareholder or (ii) the Current CEO, for all Buyer Indemnification Claims under Sections 9.2(a)(i), 9.2(a)(iii), 9.2(b)(i) and 9.2(b)(iii); and (y) each Seller Indemnifying Party who is not a Company Shareholder (other than the Current CEO) for all Buyer Indemnification Claims under this Article 9, shall be limited to such Seller Indemnifying Party’s respective Pro Rata Share of the balance of the Escrow Fund.
(iv) Subject to Section 9.2(c)(i), the liability of each Seller Indemnifying Party that is a Company Shareholder and the Current CEO for all Buyer Indemnification Claims under this Article 9, other than the Buyer Indemnification Claims referred to in and capped under Section 9.2(c)(iii), shall be limited, in the aggregate, to an amount equal to the aggregate portion of the Acquisition Consideration including any Earn Out Amount actually paid to such Seller Indemnifying Party pursuant to this Agreement, provided, however, that for the purposes of determining the value of the aggregate portion of the Acquisition Consideration actually paid to a Seller Indemnifying Party or the Current CEO for the purposes of the foregoing, with respect to each share of Parent Common Stock received, the value of the Parent Common Stock shall be deemed to be the actual consideration received by such Seller Indemnifying Party upon the sale of the Parent Common Stock issued to him, her or it as part of the Acquisition Consideration.
(v) The Escrow Fund will always be the Buyer Indemnified Parties’ first recourse with respect to the indemnification obligations of the Seller Indemnifying Parties and any indemnification obligation payable out of the Escrow Fund shall be paid in cash, provided, however, that if the cash portion of the Escrow Fund has been exhausted, and there are shares of Parent Common Stock deposited in the Escrow Fund, such Buyer Indemnified Party may elect to receive all or a portion of the Damages for which such Buyer Indemnified Party is entitled from the Escrow Fund in the form of shares of Parent Common Stock in an amount equal to such Damages divided by the average closing price of a share of Parent Common Stock on the NYSE in the 30 trading days preceding the date on which payment of the Damages from the Escrow Fund is due.
(vi) Except in the case of fraud in connection with the Agreement or in any of the ancillary agreements, exhibits, schedules or certificates to, or delivered in connection with this Agreement, the indemnification obligations provided in Article 9 of this Agreement will be the sole and exclusive remedy of the Buyer Indemnified Parties in connection with this Agreement or any of the ancillary agreements, exhibits, schedules or certificates to, or delivered in connection with this Agreement, except that the foregoing shall not limit the right to seek specific performance, a restraining order or injunctive relief with respect to any provision of this Agreement or any of the ancillary agreements, exhibits, schedules or certificates to, or delivered in connection with this Agreement. The Buyer Indemnified Parties hereby irrevocably waive, as of Closing, any right to seek any other remedy of any kind or nature, in law or in equity, on any basis, other than indemnification under Article 9 of this Agreement and specific performance, a restraining order or injunctive relief.
(vii) In the event that any Buyer Indemnified Party is entitled to receive indemnification under this Article 9 from the Seller Indemnifying Parties, then the Seller Indemnifying Parties shall be responsible and liable severally and not jointly for such indemnification obligation and each Seller Indemnifying Party shall only be responsible for its respective Pro Rata Share of such indemnification obligation; provided that, if and to the extent that any Buyer Indemnified Party is entitled to receive indemnification under Section 9.2(b) from a Selling Indemnifying Party, then the Buyer Indemnified Parties shall be entitled to indemnification pursuant only from the Selling Indemnifying Party upon whom the indemnification obligation arises.
(viii) Damages shall be offset by an amount equal to Section 10.2(a)(i) unless and until the amount of Losses incurred any net insurance or other indemnification proceeds (taking into account any deductible and increase in premiums attributable to such Damages) that are actually received by or are due to such Acquiror Buyer Indemnified Party that are the subject of a claim in connection with such Damages.
(or any series of related claimsix) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror No Buyer Indemnified Party shall only be entitled indemnified more than once for the same Damage suffered, regardless of whether such Damage may be attributed to indemnification pursuant to Section 10.2(a)(imore than one indemnity, breach of several paragraphs of the representations and warranties or the breach of or default in connection with several covenants or obligations herein, and regardless whether or not such breaches of covenants or misrepresentations are made with fraud.
(x) The Seller Indemnifying Parties shall have no liability for Damages (and such Damages shall be disregarded for all purposes hereunder): (i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled matter giving rise to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (Damages is provided for, accrued or reserved in the “Indemnification Deductible”), and then only to the extent of such excess, Closing Net Working Capital or Closing Net Indebtedness; or (ii) in no event shall which are punitive, consequential, indirect or special damages, including loss of profit or loss of opportunity, regardless of the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceform of action through which such Damages are sought.
(bxi) Notwithstanding For the provisions avoidance of Section 10.4(a)doubt, the Seller Indemnifying Parties shall have no liability for any matter or for any infringement, misappropriation or violation of any Intellectual Property Rights of any Person if arising out of or resulting from or occasioned by: (i) the De Minimus Amount and combination, integration or bundling by any Buyer Indemnified Party of the Indemnification Deductible Company Intellectual Property with other services, Technology, software or intellectual property (including of the Buyer or any member of the Buyer’s Group) if such liability, infringement misappropriation or violation would not have been incurred or occurred but for such combination, integration or bundling (i.e., if such combination, integration or bundling exists as of the date hereof, the exclusion included in this clause (i) shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxesapply); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) modification by any Buyer Indemnified Party or (ix) or to breaches on its behalf of the representations Company Intellectual Property if such liability, infringement misappropriation or violation would not have incurred or occurred but for such modification. Accordingly and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless limitations contained herein and until without derogating from the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount generality of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE Xforegoing, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or the Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any Intellectual Property Rights or the Company Products, services or Technology of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of the Company’s Subsidiaries is limited to and refers (as applicable) to Company Intellectual Property in its state as of the date hereof and as of the Closing, and the operation of the business of the Company and the Company’s Subsidiaries prior to as of the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)in the absence of the Acquisition.
(fxii) Notwithstanding any other provision of this Agreement to the contrary, The Seller Indemnifying Parties shall have no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise liability in respect of any Losses. All Indemnified Buyer Indemnification Claim relating to a Third Party Claim (as defined below) which is not, and does not become within twelve (12) months of a Third Party Claim Notice (as defined below), an actual Action.
(xiii) The Seller Indemnifying Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder have no liability in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount Buyer Indemnification Claim relating to any matter arising under one provision or thing after the date of this Agreement done or omitted to be done at the request of or with the consent of the Buyer, Parent or any member of the Buyer’s Group.
(xiv) The Seller Indemnifying Parties shall have no liability in respect of any Buyer Indemnification Claim if and to the extent such Indemnified Party that: (A) the Buyer Indemnification Claim would not have arisen but for any act, omission, transaction or arrangement (or other Acquiror Indemnified Parties in any combination of the event same) having effect after Closing of an Acquiror Indemnified Partythe Buyer, Parent, any member of the Buyer’s Group, the Company or any of the Company’s Subsidiaries, or any of their respective directors, employees, agents, consultants or advisers, other than any act, omission, transaction or arrangement (or any combination of the same) in reliance on any representations, warranties or covenants of the Company or any of the Seller Indemnified Parties in this Agreement or any of the event of a Seller Indemnified Party) had already recovered such amount ancillary agreements, exhibits, schedules or certificates to, or delivered in connection with respect to such matter pursuant to that or other provisions of this Agreement.
; (iB) Notwithstanding the Buyer Indemnification Claim would not have arisen but and only but for any other provision change in the accounting policy or practice of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect Company or any of any Losses which occur the Company’s Subsidiaries having effect after Closing; (C) the Buyer Indemnification Claim arises or are is increased as a result of the entry into force passing of, or any change in, after in or any change in the Closing Dateinterpretation of, any Law after the date of this Agreement; (D) the Buyer Indemnification Claim arises or is increased as a direct result of the Buyer or Parent not complying with its obligations under this Agreement; (E) the subject matter of the Buyer Indemnification Claim has been made whole or has otherwise been compensated for without cost or expense to the Buyer; (F) the Damages suffered or incurred by the Buyer, Parent the Company or any practice of the Company’s Subsidiaries is used to or is capable of being used by Parent, the Buyer, any member of the Buyer’s Group, the Company or any of the Company’s Subsidiaries to obtain a tax benefit, to the extent of the benefit derived or capable of being derived; or (G) the Buyer Indemnification Claim arises in respect of a matter, event or circumstance where the Buyer, Parent, any member of the Buyer’s Group, the Company or any of the Company’s Subsidiaries is recovered from some other person any loss or damage arising from that matter, event or circumstances, net of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if costs to such entry into force or change has retroactive effectPerson.
Appears in 1 contract
Sources: Share Purchase Agreement (Harman International Industries Inc /De/)
Limitations on Indemnification. (a) A Purchaser Indemnified Party may assert an Indemnification Claim pursuant to Section 7.2(a) with respect to representations and warranties of the Seller only to the extent the Purchaser Indemnified Party gives notice of the Indemnification Claim pursuant to Section 7.4(a) before the expiration of the applicable time period set forth in Section 7.1 for such representation and warranty. Any Indemnification Claim not made in accordance with Section 7.4(a) by the Purchaser Indemnified Parties on or before the applicable date set forth in Section 7.1, and Seller’s indemnification obligations with respect thereto, will be irrevocably and unconditionally released and waived by the Purchaser Indemnified Parties.
(b) Notwithstanding the provisions of this ARTICLE XArticle 7, Seller shall not have any indemnification obligations for Losses under Section 7.2, (i) no Acquiror Indemnified Party shall be entitled for any individual item where the Loss relating thereto is less than $100,000 and (ii) in respect of each individual item where the Loss relating thereto is equal to indemnification pursuant to Section 10.2(a)(i) or greater than $100,000, unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all such Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(iexceeds three (3%) exceeds $3,550,000 (percent of the “Indemnification Deductible”)Nominal Purchase Price, and then only to the extent of such excess. In no event shall the aggregate amount of Losses to be paid by Seller under Section 7.2 exceed ten (10%) percent of the Nominal Purchase Price. Notwithstanding the foregoing, (ii) in no event shall the aggregate amount indemnification to be paid as indemnification pursuant by Seller under Section 7.2 with respect to Section 10.2(a)(i)a breach by Seller of the representations and warranties contained in any of Sections 4.6, (iv)4.10, (v) 4.11, 4.12, 4.13 and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not 4.14 exceed the Purchase Price.
(bc) Notwithstanding No representation or warranty of Seller contained herein shall be deemed untrue or incorrect, and Seller shall not be deemed to have breached a representation or warranty, as a consequence of the provisions existence of Section 10.4(a)any fact, circumstance or event of which (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect is disclosed in response to Losses relating to breaches of the representations and warranties set forth another representation or warranty contained in Company Fundamental Representations this Agreement or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches Purchaser is aware as of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceClosing Date.
(d) For purposes of determining whether a breach No Purchaser Indemnified Party shall have any right to indemnification under this Article 7 in respect of any of matter that is taken into account in the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach calculation of any of adjustment to the representations or warranties, the representations and warranties in Adjusted Purchase Price pursuant to this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent The amount of any Losses that a court for which indemnification is provided under this Article 7 shall be net of competent jurisdiction has determined any amounts actually recovered or recoverable by final judgment the indemnified party under insurance policies or otherwise, and net of any tax benefit realized by Purchaser, with respect to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)such Losses.
(f) Notwithstanding any other provision For purposes of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining calculating the amount of any Losses for which the Indemnified Parties are entitled to assert a claim indemnification for indemnification, the amount any breach of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit representation or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity warranty is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification provided under this ARTICLE X. In Article 7 (but not for purposes of determining whether any particular representation or warranty contained herein has been breached), any materiality or Material Adverse Effect qualifications in the event that any insurance proceeds, Tax benefits, Relief applicable representations or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized warranties shall promptly be refunded to the Indemnifying Partyignored.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(ig) Notwithstanding any other provision of anything contained in this Agreement to the contrary, no Acquiror Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges and agrees that, except for the representations and warranties contained in Article 4 (as modified by the Schedules hereto), neither Seller nor any other Person is making any express or implied representation or warranty with respect to Seller, ▇▇▇▇▇ Holdings, ▇▇▇▇▇, their respective Affiliates or the transactions contemplated by this Agreement, and Seller disclaims any representations or warranties, whether made by Seller, ▇▇▇▇▇ Holdings, ▇▇▇▇▇ or any of their respective Affiliates, officers, directors, employees, agents or representatives. Any claims a Purchaser Indemnified Party may have for breach of representation or warranty shall be entitled to indemnification under this ARTICLE X based solely on the representations and warranties of Seller set forth in respect of any Losses which occur Article 4 (as modified by the Schedules hereto as supplemented or are increased as a result amended). In furtherance of the entry into force offoregoing, except for the representations and warranties contained in Article 4 (as modified by the Schedules hereto), Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges and agrees that none of ▇▇▇▇▇, ▇▇▇▇▇ Holdings, Seller, any of their respective Affiliates or any other Person will have or be subject to any Liability to Purchaser or any other Person for, and Seller hereby disclaims all Liability and responsibility for, any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Purchaser or its Affiliates or representatives, including any confidential memoranda distributed on behalf of ▇▇▇▇▇ Holdings relating to ▇▇▇▇▇ or ▇▇▇▇▇ Holdings or other publications or data room information provided to Purchaser or its Affiliates or representatives, or any change in, after other document or information in any form provided to Purchaser or its Affiliates or representatives in connection with the Closing Date, any Law or any practice sale of any Governmental Authority the ▇▇▇▇▇ Holdings Membership Interest and the transactions contemplated hereby (including any increase in the Tax rates opinion, information, projection, or advice that may have been or may be provided to Purchaser or its Affiliates or representatives by any director, officer, employee, agent, consultant, or representative of ▇▇▇▇▇, ▇▇▇▇▇ Holdings or Seller or any new Tax of their respective Affiliates) or for Purchaser’s use of any withdrawal such information.
(h) Purchaser, on behalf of Relief)itself and each of the other Purchaser Indemnified Parties, even if acknowledges that it has conducted to its satisfaction, its own independent investigation of the condition, operations and business of ▇▇▇▇▇ and ▇▇▇▇▇ Holdings and, in making its determination to proceed with the transactions contemplated by this Agreement, each of the Purchaser Indemnified Parties has relied on the results of Purchaser’s independent investigation. The disclosure of any matter or item in any schedule hereto shall not be deemed to constitute an acknowledgment that any such entry into force or change has retroactive effectmatter is required to be disclosed.
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Sources: Limited Liability Company Membership Interest Purchase Agreement (Oneok Inc /New/)
Limitations on Indemnification. (a) Notwithstanding Neither the provisions of this ARTICLE XPurchaser Parties, (i) no Acquiror Indemnified Party on the one hand, nor the Seller Entities, on the other hand, shall be entitled to indemnification be indemnified pursuant to Section 10.2(a)(i) 13.02, Section 13.03 or any other provision hereof unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified the Purchaser Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) or the Seller Entities, as the case may be, exceeds $3,550,000 500,000, at which time the indemnifying party shall be obligated to indemnify the indemnified party (i) if the “Indemnification Deductible”indemnifying party is a Purchaser Party, for all Losses (and not only the Losses in excess of $500,000) and (ii) if the indemnifying party is a Seller Entity, for all Losses in excess of $100,000 (and not only the Losses in excess of $500,000); provided, and then only however, that this threshold limitation does not apply in any respect to (i) the extent failure of such excessthe Purchaser Entities to pay in full the merger consideration or the Asset Purchase Price, (ii) the indemnification obligations of the Principals and the 84 Sellers set forth in no event shall Section 11.03, (iii) the aggregate amount to be paid as indemnification pursuant to obligations of the Purchaser Entities set forth in Section 10.2(a)(i11.01(g), (iv), ) the rights of the Purchaser Entities pursuant to Section 12.02(c) hereof and (v) the indemnification obligations of the Seller Entities with respect to their representations and warranties set forth in Section 5.15 hereof; provided, however, that any amount paid under the indemnification obligation referenced in this subpart (viiv) exceed shall be ignored in calculating the $35,500,000 (500,000 threshold described above. Notwithstanding anything herein to the “Cap”). Seller’s aggregate liability contrary, to the extent any party may seek indemnification under more than one provision of this ARTICLE X Agreement for the same reason or event, the indemnified party shall not exceed the Purchase Priceonly be subject to such $500,000 threshold once and may only recover its Losses once.
(b) Notwithstanding the provisions of Section 10.4(a), Absent fraud and except (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 5.15 hereof (Taxes); (ii) the Cap shall not apply and any other representations and warranties of any Seller Entity with respect to Losses any Tax) and the matters addressed in that certain side letter, dated as of even date herewith, by and between the parties hereto, relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 Sections 5.15, 5.17 and 5.18 hereof, and (Taxes); (iiiii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant as otherwise expressly provided in the proviso to Section 10.2(a)(iv13.04(a) or hereof (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; other than part (iv) no Acquiror Indemnified Party thereof), the liability of the Principals and the Sellers arising under this Agreement for the breach of any and all representations or warranties shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds not exceed an aggregate amount equal to the sum of (1) $3,100,000 and one-half of the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent shares of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred Class A Stock received by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(viTrusts (or Schankman or ▇▇▇▇▇▇▇▇▇) exceeds $500,000, in the Merger. The liability of the Principals and then only to the extent of such excess; and (vi) Sellers with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, matters set forth in clauses (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) of the prior sentence shall be unlimited, except as otherwise provided in no event shall that certain side letter, dated as of even date herewith, by and between the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amountparties hereto, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties set forth in Sections 5.15, 5.17 and 5.18 hereof. The parties hereto agree that, solely for purposes of this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events13.04(b), the value of each share of Class A Stock shall be read without giving effect $13.33 (subject to any qualifications or limitations adjustment as provided in Section 11.05(c)). Notwithstanding the foregoing, such shares of Class A Stock shall only be available to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert satisfy a claim for indemnificationindemnification if such notice is given with respect thereto within the six-month period immediately following the Closing and, thereafter, except as otherwise provided in the first sentence of this Section 13.04(b), the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence liability of the Losses Principals and the Sellers for which indemnity is sought, (ii) a breach of a representation or warranty shall not exceed $3,100,000 for the amount remainder of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect the applicable survival period under Section 13.01 hereof. After the expiration of such Lossessurvival period, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to the indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect obligations of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount parties with respect to such matter pursuant to that or other provisions of this Agreementthe non-surviving representations and warranties shall terminate completely.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. Notwithstanding any other provision of this Agreement, the indemnification obligations provided for in this Agreement shall be subject to the limitations and conditions set forth in this Section 12.2.
(a) Any claim by a Buyer Indemnitee for indemnification pursuant to Sections 12.1(a) or (b) shall be required to be made by delivering notice to Parent no later than the expiration of twelve (12) months after the Closing Date (the "General Survival Period"), except no claim may be brought for breach of any covenant in Sections 9.1, 9.2, 11.1, 11.2, 11.3, 11.4 and 11.9 that expires at the Closing. Notwithstanding the provisions of this ARTICLE Xforegoing, any claim for indemnification (i) no Acquiror Indemnified Party directly based upon, arising out of or caused by any inaccuracy in or breach of any representation or warranty in Sections 4.1 or 4.3 [Execution and Delivery; Enforceability] (collectively, the "Fundamental Reps"), or (B) brought for breach of any covenant (other than covenants set forth in Sections 9.1, 9.2, 11.1, 11.2, 11.3, 11.4 and 11.9) may, in each case, be made at any time.
(b) Except for claims for indemnification based upon, arising out of or caused by any breach of any of the Fundamental Reps or claims based on actual fraud, Buyer Indemnitees shall not be entitled to indemnification for any Losses until the aggregate amount of all of Buyer Indemnitees' claims for indemnification exceeds the Indemnification Threshold and thereafter Buyer Indemnitees shall be entitled to indemnification only for amounts in excess of the Indemnification Threshold.
(c) Except for claims for indemnification based upon, arising out of or caused by any breach of any of the Fundamental Reps or claims based on actual fraud, the maximum indemnification amount to which the Buyer Indemnitees may be entitled pursuant to Section 10.2(a)(ithis Agreement shall be limited to the Indemnification Cap.
(d) unless and until Solely with respect to indemnification claims based upon, arising out of or caused by any breach of the Fundamental Reps, the maximum indemnification amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only to which Buyer Indemnitees may be entitled to indemnification pursuant recover from Sellers shall be an amount equal to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(be) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible Any claims for actual fraud shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)limitation.
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party The Buyer Indemnitees shall not be entitled to indemnification under this ARTICLE X for (i) any Losses Agreement if, and to the extent that, such Buyer Indemnitees have otherwise been compensated for such matter pursuant to, or the Losses are reflected in were taken into account under, any other provision of this Agreement, so as to avoid duplication or "double counting" of the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Partysame Losses.
(g) In determining Any claim for Losses by the Buyer Indemnitees shall be reduced by the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined that are attributable to any voluntary act, omission, transaction or arrangement of Buyer or the Company from and after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyClosing.
(h) No Indemnified Party The Buyer Indemnitees shall take all reasonable steps to mitigate any Loss subject to Section 12.1 upon becoming aware of any event which would reasonably be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Partyexpected to, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementdoes, give rise thereto.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled Notwithstanding anything to the contrary in this Section 8, in respect of any indemnification obligation of Parent or the Shareholder pursuant to Section 10.2(a)(i8(b) unless and until hereof (other than any indemnification for Adverse Consequences resulting from, arising out of, relating to, in the amount of Losses incurred nature of, or caused by such Acquiror Indemnified Party that are the subject of a claim breach (or any series of related claimsalleged breach) exceeds $50,000 (by Parent or the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any Shareholder of the representations or warranties contained in Sections 3(a), 4(a)-(e), 4(k), 4(y), 4(aa) and the last sentence of Seller Section 4(e) and the covenants contained in Sections 7(j) and 7(p), the last sentence of Section 8(b)(ii) and Sections 8(b)(iv), (v), (vii) and (viii) to which this Section 8(f) shall not apply):
(i) neither Parent nor Shareholder shall be liable unless and until the aggregate cumulative amount of any Adverse Consequences for which a claim for indemnification has been made pursuant to this Article 8 against Parent or Company has occurred andthe Shareholder exceeds $100,000 (the "Basket"), if soat which point Parent and the Shareholder shall be responsible for all Adverse Consequences in excess of $75,000; and provided, further that for purposes of calculating determining claims for which Adverse Consequences may be applied to the amount of Losses relating Basket the representations and warranties contained herein shall be deemed not to include any breach qualifications based on materiality and Knowledge, and (ii) the aggregate indemnification obligations for Parent and the Shareholder shall not exceed $5,000,000.
(ii) Notwithstanding anything to the contrary in this Section 8, in respect of any indemnification obligation of Buyer pursuant to Section 8(c) hereof (other than any indemnification for Adverse Consequences resulting from, arising out of, relating to, in the nature of, or caused by the breach (or alleged breach) by Buyer of the representations or warrantieswarranties contained in Section 3(b)(i)-(iv), and the covenant contained in Section 7(o) to which this Section 8(f) shall not apply):
(i) Buyer shall not be liable unless and until the aggregate cumulative amount of any Adverse Consequences for which a claim for indemnification has been made pursuant to this Article 8 against Buyer exceeds the Basket, at which point Buyer shall be responsible for all Adverse Consequences in excess of $75,000; and provided, further that for purposes of determining claims for which Adverse Consequences may be applied to the Basket the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), contained herein shall be read without giving effect deemed not to include any qualifications or limitations as to “material,” “materiality,” based on materiality and “Material Adverse Effect” contained in any such representations and warrantiesKnowledge.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. Indemnification under this Article 8 shall be limited as follows:
(a) Notwithstanding No indemnification shall be made for Losses unless a written claim for indemnification is made (identifying and describing such claim with reasonable specificity) not later than the provisions applicable survival periods set forth in Section 8.1 hereof.
(b) The Seller shall not be responsible for the indemnification of the Buyer Indemnitees for any Losses under Article 8 (except for indemnification for any Losses under Section 8.2(c) in which case the limitation in this ARTICLE XSection 8.4(b) shall not apply), unless and until (i) no Acquiror the aggregate amount of all indemnifiable Losses of the Buyer Indemnitees hereunder, plus (ii) the aggregate amount of all indemnifiable Losses of the Purchaser Indemnified Party Parties (as defined in the Real Estate Purchase Agreement) under Article 11 of the Real Estate Purchase Agreement, plus (iii) the aggregate amount of all indemnifiable Losses with respect to Environmental Claims of the Tenant Indemnitees (as defined in the Rollover Lease) under Section 27(a)(ii) of the Rollover Lease, in the aggregate exceeds Two Hundred Fifty Thousand Dollars ($250,000) (the "Seller's Threshold Amount"), in which case, the Seller shall only be entitled to liable for Losses in excess of the Seller's Threshold Amount. Claims thereafter may be asserted regardless of amount. Notwithstanding the foregoing, the Seller shall not be responsible for any indemnification of the Buyer Indemnitees (a) for Item 1 Losses pursuant to Section 10.2(a)(i8.2(e) hereof unless and until such Item 1 Losses exceed One Million Dollars ($1,000,000) in the aggregate, in which case the Seller shall only be liable for Item 1 Losses in excess of such amount, and (b) for Western Atlas Losses pursuant to Section 8.2(d) hereof unless and until such Western Atlas Losses exceed Two Hundred Fifty Thousand Dollars ($250,000) and the aggregate of (i) such Western Atlas Losses in excess of $250,000, plus (ii) all other indemnifiable Losses, exceed the Seller's Threshold Amount. FOR EXAMPLE, if at any time Western Atlas Losses to date equal $200,000 and there are no other indemnifiable Losses, then, at such time, no payment to the Buyer Indemnitees shall be made in respect of such Western Atlas Losses. FOR EXAMPLE, if at any time Western Atlas Losses to date equal $550,000 and there are no other indemnifiable Losses, then, at such time, a payment to the Buyer Indemnitees of $50,000 shall be made in respect of such Western Atlas Losses. FOR EXAMPLE, if at any time Western Atlas Losses to date equal $400,000 and there are other indemnifiable Losses to date equal to $200,000, then, at such time, a payment to the Buyer Indemnitees of $100,000 shall be made in respect of all such Losses and the Seller's Threshold Amount has been met and any future Western Atlas Losses are paid dollar for dollar. FOR EXAMPLE, if at any time Western Atlas Losses to date equal $200,000 and there are other indemnifiable Losses to date equal to $400,000, then, at such time, no payment to the Buyer Indemnitees shall be made in respect of such Western Atlas Losses (although such $200,000 amount shall continue to be counted in any future calculation of Western Atlas Losses) and payment to the Buyer Indemnitees of $150,000 shall be made in respect of such other indemnifiable Losses. The foregoing examples are illustrative of the application of this "deductible" amount for Western Atlas Losses only, and shall have no impact on the other applicable requirements set forth in this Article 8 relating to the Seller's indemnification obligations including specifically the survival periods set forth in SECTION 8.1 hereof.
(c) The total liability of the Seller and/or any of its Affiliates (or permitted assignees hereunder or under the Real Estate Purchase Agreement) for indemnification under this Article 8 and under Article 11 of the Real Estate Purchase Agreement and for indemnification for all indemnifiable Losses with respect to Environmental Claims of the Tenant Indemnitees under Section 27(a)(ii) of the Rollover Lease, shall in no event exceed an aggregate amount of Twenty Million Dollars ($20,000,000), except for (i) indemnification for any Losses under Section 8.2(c), in which case there shall be no limitations on the total liability of the Seller, (ii) breach of the representation and warranty of the Seller set forth in Section 3.3(b) hereof, in which case the total liability of the Seller for Losses for breaches of Section 3.3(b) shall in no event exceed the Purchase Price, or (iii) indemnification for any Losses under Section 11.1(b) of the Real Estate Purchase Agreement, in which case there shall be no limitations on the total liability thereunder.
(d) The Buyer shall not be responsible for the indemnification of the Seller Indemnitees for any Losses under Section 8.3(a) unless and until the aggregate amount of all indemnifiable Losses incurred by such Acquiror Indemnified Party that are of the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent Seller Indemnitees hereunder, plus the aggregate amount of all indemnifiable Losses incurred by all Acquiror of the Seller Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to (as defined in the Real Estate Purchase Agreement) under Section 10.2(a)(i11.2(a) exceeds of the Real Estate Purchase Agreement in the aggregate exceed Two Hundred Fifty Thousand Dollars ($3,550,000 250,000) (the “Indemnification Deductible”"Buyer's Threshold Amount"), and then only to in which case, the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party Buyer shall only be entitled to indemnification to the extent the aggregate amount of all liable for Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such in excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental RepresentationsBuyer's Threshold Amount. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes Claims thereafter may be asserted regardless of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesamount.
(e) No Indemnified Party will The total liability of the Buyer and/or any of its Affiliates (or permitted assignees hereunder or under the Real Estate Purchase Agreement) for indemnification under Section 8.3(a) and under Section 8.3(b) and under Section 11.2(a) of the Real Estate Purchase Agreement shall in no event exceed an aggregate amount of Twenty Million Dollars ($20,000,000) (although this limitation shall have no impact on the Company's liability, if any, for the matters described under Section 8.3(b) after giving effect to the exception contained in Section 8.3(b)); it being understood and agreed that there shall be entitled no duplication of recovery with respect to the matters described under Section 8.3(b). Effective as of the Closing, the Seller hereby agrees not to seek indemnification from or pursue a claim against the Company for any Losses to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence Seller has an indemnification obligation therefor under this Agreement or willful misconduct of Seller, Company or any of its Subsidiaries prior to for which the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Seller is responsible hereunder after the Closing.
(f) Notwithstanding Except as provided in or as a result of the application of Section 2.4 hereof and absent fraud, intentional misconduct or intentional misrepresentation or criminal activity, each of the parties hereto hereby acknowledges and agrees that the indemnifications provided by this Article 8 (subject to the terms and conditions contained in this Article 8) shall be the sole and exclusive remedies of such party for monetary relief for any breach of the representations, warranties, covenants or agreements of the other provision of party set forth in this Agreement to (including the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartySchedules).
(g) In determining the amount Any indemnification shall be net of any amounts recovered from any surety, insurance carrier or third party obligor, including any customer (i.e., the government) (and shall not include the cost of maintaining any surety or insurance policies), and no right of subrogation against the indemnifying party shall accrue hereunder to or for the benefit of any surety, insurance company or any third party. The indemnified party shall submit in a timely manner to any applicable surety, insurance carrier or third party obligor, including any customer (i.e., the government) all claims for indemnifiable Losses for which the Indemnified Parties are entitled it is reasonably likely that such entity would have a payment obligation to assert a claim for indemnification, the amount of any such Losses will indemnified party (or its predecessors) and the indemnifying party shall be determined after deducting therefrom subrogated to the rights of such indemnified party (ior its Affiliates) the value of to claim against such surety, insurance carrier or third party; provided, however, that any Tax benefit or Relief actually realized by failure to collect any such Indemnified Parties arising out of or in connection with the incurrence of the Losses amounts shall not constitute a defense to an obligation to indemnify for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding anything to the provisions of this ARTICLE X, contrary (ii)(A) no Acquiror Indemnified an Indemnifying Party shall not be entitled liable for any claim for indemnification, and no claim for indemnification may be made, pursuant to Section 8.2(a)(i) or Section 8.3(a) with respect to any individual claim unless such claim exceeds $[***] (the “R&W Claim Threshold”), and (B) an Indemnifying Party shall not be liable for any claim for indemnification pursuant to Section 10.2(a)(i8.2(a)(i) or Section 8.3(a) unless and until the aggregate amount of indemnifiable Losses incurred by such Acquiror Indemnified Party relating to claims that are meet the subject of a claim (R&W Claim Threshold equals or any series of related claims) exceeds $50,000 [***], after which the Indemnifying Party shall be liable for all such Losses from the first dollar (solely with respect to claims that equal or exceed the R&W Claim Threshold), and (ii)(A) an Indemnifying Party shall not be liable for any claim for indemnification, and no claim for indemnification may be made, pursuant to Section 8.2(a)(ii) or Section 8.3(b) with respect to any individual claim unless such claim exceeds $[***] (the “De Minimus AmountCovenant Claim Threshold”), and (B) and such Acquiror Indemnified an Indemnifying Party shall only not be entitled to liable for any claim for indemnification pursuant to Section 10.2(a)(i8.2(a)(ii) to the extent or Section 8.3(b) unless and until the aggregate amount of all indemnifiable Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled relating to indemnification pursuant to Section 10.2(a)(i) claims that meet the Covenant Claim Threshold equals or exceeds $3,550,000 [***], after which the Indemnifying Party shall be liable for all such Losses from the first dollar (solely with respect to claims that equal or exceed the “Indemnification Deductible”Covenant Claim Threshold), and then only ; provided that this Section 8.6(a) shall not apply to the extent of such excess, any Loss claimed under Section 8.2(a)(iii) or Section 8.3(c).
(iib) in In no event shall the aggregate amount to be paid as liability of (i) Sellers in respect of claims for indemnification pursuant to under Section 10.2(a)(i8.2(a)(i), or (ivii) Buyer in respect of claims for indemnification under Section 8.3(a), exceed the Escrow Amount until the first (v1st) anniversary of the Trigger Date, and [***] of the Escrow Amount thereafter until the [***] anniversary of the Trigger Date (viithe “R&W Cap”). In no event shall the aggregate liability of (i) Sellers in respect of claims for indemnification under Section 8.2(a)(ii), or (ii) Buyer in respect of claims for indemnification under Section 8.3(b), exceed $35,500,000 [***] of the Combined Purchase Price (the “Covenant Cap”). In no event shall the aggregate liability of Sellers or Buyer in respect of any and all claims for indemnification under this Article VIII exceed [***] of the Combined Purchase Price (the “Cap”), inclusive of the R&W Cap and the Covenant Cap. SellerNotwithstanding anything to the contrary contained herein, Buyer’s aggregate liability under this ARTICLE X obligation to pay the Closing Cash Payment due at each Applicable Closing shall not exceed be subject to any set-off, counterclaim or recoupment claimed by Buyer to be owed by the Purchase Price.
(b) Notwithstanding the provisions Sellers to Buyer, including in respect of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to any indemnification claims made pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policythis Article VIII.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller An Indemnified Party shall not be entitled to indemnification pursuant double recovery for any Losses. In calculating amounts payable to Section 10.2(b) unless and until an Indemnified Party hereunder, the amount of Losses incurred by such Seller Indemnified Party that are the subject any indemnified Loss shall be determined without duplication of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties any other Loss for which such Seller Indemnified Parties are entitled to an indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) claim has been made under any other covenant or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Priceagreement.
(d) For purposes of determining whether a breach Notwithstanding anything to the contrary, each Party shall, and shall cause its respective Affiliates and Representatives including the applicable Indemnified Party to take all commercially reasonable steps to mitigate their respective Losses upon and after becoming aware of any of the representations event or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating condition that would reasonably be expected to give rise to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesLosses that are indemnifiable hereunder.
(e) No Indemnified Party will be entitled to indemnification to the extent The amount of any Losses that a court for which indemnification is provided under this Article VIII shall be net of competent jurisdiction has determined any amounts actually recovered by final judgment the Indemnified Party under insurance policies or otherwise with respect to have resulted from the bad faith, gross negligence such Losses (net of any Tax or willful misconduct of the party expenses incurred in connection with such recovery). Each Party shall use its commercially reasonable efforts to recover under insurance policies for any Losses prior to seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)under this Agreement.
(f) Notwithstanding anything to the contrary elsewhere in this Agreement or any Related Agreement, no Party shall, in any event, be liable to any other provision Person for any consequential, incidental, indirect, special or punitive damages of such Person, including loss of revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement or any Related Agreement (provided, that such limitation with respect to the contrary, no Acquiror Indemnified Party lost profits shall be entitled not limit any Party’s right to indemnification under this ARTICLE X for recover (i) contract damages in connection with another Party’s failure to close in violation of this Agreement or any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement Related Agreement) or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received paid by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or Party in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified a Third Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyClaim.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (Southeastern Grocers, Inc.)
Limitations on Indemnification. (a) Notwithstanding The provisions for indemnity under Section 6.1(a)(i) (except with respect to the provisions Fundamental Reps or Section 3.10 (Taxes)) or Section 6.1(b)(i) (except with respect to the Fundamental Reps) shall be effective only when the aggregate amount of this ARTICLE Xall Losses for claims exceeds $[…***…], (i) no Acquiror in which case the Indemnified Party shall be entitled to indemnification pursuant to only for the Indemnified Party’s Losses in excess of such amount arising under Section 10.2(a)(i6.1(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) except with respect to the extent Fundamental Reps or Section 3.10 (Taxes)) or Section 6.1(b)(i) (except with respect to the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”Fundamental Reps), and then only to the extent of such excess, (ii) in as applicable. In no event shall the aggregate amount to be paid as any Indemnifying Party have liability for indemnification pursuant to under Section 10.2(a)(i6.1(a)(i) or Section 6.1(b)(i), (iv)as applicable, (v) and (vii) exceed for any amount exceeding, in the aggregate, $35,500,000 […***…] (the “Cap”). Seller’s aggregate liability under this ARTICLE X ; provided, however, that (i) Losses arising from any inaccuracy or breach of any Fundamental Rep or Section 3.10 (Taxes) shall not exceed be subject to the Purchase PriceCap or considered for purposes of determining when the Cap has been exceeded and (ii) the Buyer Indemnitees shall be entitled to recover from Seller pursuant to Section 6.1(a)(i) an amount, in the aggregate, up to $[…***…] for Losses arising from inaccuracies or breaches of Section 3.11 (Intellectual Property) or Section 3.14 (Sufficiency of Assets), which amount shall be reduced by the amount of any indemnifiable Losses previously paid to the Buyer Indemnitees under Section 6.1(a)(i) (other than the amount of indemnifiable Losses arising from a breach or inaccuracy of any Fundamental Rep or Section 3.10 (Taxes)). Except as set forth in Section 6.5, the maximum amount of indemnifiable Losses recoverable by the Buyer Indemnitees pursuant to Section 6.1(a) or by the Seller Indemnitees pursuant to Section 6.2(a) shall be […***…].
(b) Notwithstanding The representations and warranties of Seller and Buyer contained in this Agreement shall survive the provisions of Section 10.4(a), Closing and continue in full force and effect thereafter through and including the date that is […***…] after the Closing Date; provided that (i) the De Minimus Amount Fundamental Reps shall remain in full force and the Indemnification Deductible effect and shall not apply with respect to Losses relating to breaches of survive indefinitely, the representations and warranties set forth contained in Company Fundamental Representations or Section 3.15 3.10 (Taxes); ) shall survive the Closing until the expiration of the applicable statute of limitations (including extensions) and (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth contained in Company Fundamental Representations or Section 3.15 3.11 (Taxes); Intellectual Property) and Section 3.14 (iiiSufficiency of Assets) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and survive the Closing until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) date that is covered by a Seller Insurance Policy[…***…] after the Closing. Except as expressly provided otherwise in this Agreement, Seller’s indemnification obligation with respect to such claim the covenants or agreements contained in this Agreement shall not exceed survive the amount of the deductible applicable to such claim under the related Seller Insurance PolicyClosing until fully performed.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Neither Buyer nor Seller Indemnified Party shall be entitled liable to indemnification pursuant to Section 10.2(b) unless and until the amount any Seller Indemnitee or Buyer Indemnitee, respectively, for any exemplary, special, consequential or punitive damages, or for Losses based on lost profits or revenue, diminution in value, a multiple of Losses incurred by such Seller Indemnified Party that are the subject earnings or other similar financial metric, other than as a result of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification fraud, intentional misrepresentation or willful breach except to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) awarded in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricea Third-Party Claim.
(d) For purposes of determining whether a breach The amount of any indemnifiable Losses under this Article VI shall be reduced by any amount actually received by the Indemnified Party (net of the representations any increase in premiums) with respect to such indemnifiable Losses under any third-party insurance coverage relating thereto or warranties attributable to any net Tax benefit actually realized by such Indemnified Party resulting in a refund of Seller Taxes or Company has occurred and, if so, for purposes of calculating a reduction in the amount of Losses relating to any breach Taxes payable in a taxable period before or during which, or within one year after which, such Loss occurred (such amount, an “Alternative Reimbursement”). If, after receipt of any indemnification payment hereunder, an Indemnified Party receives an Alternative Reimbursement in respect of the representations or warrantiessame Losses for which indemnification was made and such Alternative Reimbursement was not taken into account in assessing the amount of indemnifiable Losses, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any then such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X accept such Alternative Reimbursement for (i) any Losses the account of the Indemnifying Party and shall turn over all of such Alternative Reimbursement to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except Indemnifying Party up to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled indemnification paid by the Indemnifying Party pursuant to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties this Agreement in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all the same Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyAlternative Reimbursement was paid.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) The Sellers shall have no Acquiror Indemnified Party shall be entitled to liability for any claim for indemnification pursuant to Section 10.2(a)(i12.03(a)(i), Section 12.03(b)(i) unless and until or Section 12.03(b)(ii)(C) if the Loss associated with such claim is less than $100,000 (any claim in such amount of Losses incurred by such Acquiror Indemnified Party that are the subject of being referred to as a claim (or any series of related claims) exceeds $50,000 (the “"De Minimus Amount”) and such Acquiror Indemnified Party Minimis Claim"). The Sellers shall only be entitled to have no liability for indemnification pursuant to Section 10.2(a)(i12.03(a)(i), Section 12.03(b)(i) or Section 12.03(b)(ii)(C) with respect to the extent Losses for which indemnification is provided thereunder unless the aggregate amount of such Losses (excluding all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(iassociated with De Minimis Claims) exceeds five million dollars ($3,550,000 5,000,000) (the “Indemnification Deductible”), "Indemnity Threshold") (and then only to the extent of such excess); provided that in no event shall (i) the aggregate indemnification to be paid by the Sellers pursuant to Section 12.03(a)(i), Section 12.03(a)(ii)(A), Section 12.03(b)(i) or Section 12.03(b)(ii)(C) exceed the Adjusted Escrow Funds, and (ii) the aggregate indemnification to be paid by any Seller pursuant to this Agreement exceed the actual cash proceeds received by such Seller pursuant to this Agreement; provided that the aggregate indemnification to be paid by any of ▇▇▇▇▇▇▇▇ Acquisition, GTCR X/B and the Blocker Seller (collectively, the "GTCR Sellers") pursuant to this Agreement shall not exceed the actual cash proceeds received by the GTCR Sellers pursuant to this Agreement.
(b) The Purchaser shall have no liability for any claim for indemnification pursuant to Section 12.02(a)(i) if the Loss is associated with any De Minimis Claim. Purchaser shall have no liability for indemnification pursuant to Section 12.02(a)(i) with respect to Losses for which indemnification is provided thereunder unless the aggregate amount of such Losses (including all Losses associated with De Minimis Claims) exceeds the Indemnity Threshold (excluding all Losses associated with De Minimis Claims); provided that in no event shall the aggregate amount indemnification to be paid as indemnification by Purchaser pursuant to Section 10.2(a)(i), (iv), (v) and (vii12.02(a)(i) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceAdjusted Escrow Funds.
(bc) Notwithstanding Subject to the provisions of Section 10.4(a)limitations set forth in this Agreement, (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim for indemnification pursuant to Section 10.2(a)(iv) that is covered 12.03 for Losses suffered by a Seller Insurance Policythe Company or any of its Subsidiaries, Seller’s indemnification obligation with respect to such claim shall not exceed the amount payable to the Purchaser Indemnified Parties under this Article XII shall be equal to the Applicable Percentage of such Losses (for example, if the deductible applicable Company suffers a Loss of $1 million due to such claim under a breach of a representation related to litigation in which the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE XCompany is involved for which it is otherwise entitled to receive indemnification, (i) no Seller Indemnified Party Purchaser shall be entitled to receive the Applicable Percentage of $1 million and not the entire $1 million), and (ii) with respect to any claim for indemnification pursuant to Section 10.2(b) unless 12.03 for Losses to the extent suffered solely by the Purchaser and until not the Company or any of its Subsidiaries, the amount payable to the Purchaser Indemnified Parties under this Article XII shall be equal to the amount of such Losses incurred by such Seller Indemnified Party that are (for example, if the subject Purchaser suffers a Loss of such claim exceeds $1 million due to a breach of a representation related to the De Minimus Amount and such Seller Indemnified Party Sellers' title to equity for which it is otherwise entitled to receive indemnification, Purchaser shall only be entitled to indemnification to receive the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entire $1 million). No indemnified party shall be entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) recover from an indemnifying party more than once in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricesame Losses.
(d) For purposes of determining whether a breach of any of Except for the representations or warranties of Seller or Company has occurred and, Purchaser pursuant to Section 1.06 (if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statementsapplicable) and Section 3.9 (Absence of Certain Changes or Events2.02(c), and subject to the last sentence of Section 1.09(b), no Person (including any Seller Party) shall be read without giving effect have any obligation to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesfund the Escrow Funds.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faithExcept as set forth in this Agreement, gross negligence or willful misconduct none of the party seeking indemnification (provided that Purchaser or the bad faith, gross negligence or willful misconduct of Seller, Company or other Purchaser Parties shall have any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled right to indemnification under this ARTICLE X for (i) Agreement from and against any Losses to or Taxes of any Person that are resulting from or arising out of the extent such Losses are reflected in reduction of, or failure of the Closing Date Working Capital Statement availability of, any net operating loss, capital loss, Tax basis, or (ii) punitive, consequential, indirect, incidental any other Tax asset or special damages, attribute except to the extent any that such damages are received by a third party from reduction or failure results in an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySeller Taxes.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Securities Purchase Agreement (NorthStar Asset Management Group Inc.)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to (i) Section 10.2(a)(i9.3(a) (other than for Losses related to a breach of the representations and warranties in Section 4.6), Anadarko shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 one percent (1%) of the sum of (A) the Cash Consideration plus (B) the dollar value of the Unit Consideration on the Closing Date (the sum of (A) and (B) being the “Aggregate Consideration”) (the “Indemnification Deductible”), and then only to the extent of any such excess, excess and (ii) in no event shall the aggregate amount Section 9.3(a) for Losses related to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches a breach of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap 4.6, Anadarko shall not apply with respect to be liable for those Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of unless the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the aggregate amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, 100,000 and then only to the extent of any such excess; .
(ivb) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Partnership Indemnified Party shall be Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,0009.3(a), and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim Anadarko shall not exceed be liable for such Losses that exceed, in the amount aggregate, twenty-five percent (25%) of the deductible applicable to such claim under Aggregate Consideration less the related Seller Insurance PolicyDeductible.
(c) Notwithstanding the provisions of this ARTICLE Xclauses (a) and (b) above, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b9.3(b), 9.3(c), 9.3(d) exceeds or 9.3(e) or for claims arising from fraud, Anadarko shall be fully liable for such Losses without respect to the Indemnification Deductible in Section 9.8(a) and the limitations in Section 9.8(b). (d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 9.2(a), the Partnership shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification excess. In addition, to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Anadarko Indemnified Parties are entitled to assert a claim indemnification for indemnificationLosses pursuant to Section 9.2(a), the amount of any Partnership shall not be liable for such Losses will be determined after deducting therefrom that exceed, in the aggregate, ten percent (i10%) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) Aggregate Consideration less the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyDeductible.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Contribution Agreement
Limitations on Indemnification. (a) Notwithstanding The Indemnitors shall only be required to indemnify the provisions OP Indemnified Parties under Section 2.2 with respect to OP Claims for which the OP Indemnified Parties have provided written notice to the Indemnitors, setting forth therein in reasonable detail the basis for such OP Claims, on or prior to the one (1)-year anniversary of the Closing; provided, however, that, in the event that the OP Indemnified Parties notify the Indemnitors with respect to any OP Claim on or prior to the one (1)-year anniversary of the Closing, then any such OP Claim shall survive until resolved in accordance with the terms and conditions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 Agreement (the “De Minimus AmountIndemnification Period”).
(b) and such Acquiror Indemnified Party The provisions for indemnification contained in Section 2.2 shall be effective only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent if the aggregate amount of all Losses incurred Damages for all OP Claims exceeds one percent (1%) of the Aggregate Value (it being understood and agreed that such one percent (1%) of the Aggregate Value shall then be recoverable, together with all other Damages for OP Claims under Section 2.2 in excess thereof, by all Acquiror the OP Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only subject to the extent of such excess, other limitations in this Agreement).
(iic) in In no event shall the aggregate amount to be paid as indemnification of Damages for which the Indemnitors are liable pursuant to Section 10.2(a)(i), 2.2 exceed fifteen percent (iv), (v15%) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a)Aggregate Value. In addition, Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification of Damages for which any individual Indemnitor is liable pursuant to Section 10.2(b2.2 exceed fifteen percent (15%) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability Aggregate Value received by such individual Indemnitor (i) under this ARTICLE X shall not exceed the Purchase Price.
Eola Contribution Agreement, or (dii) For purposes of determining whether a breach through any distribution (directly or indirectly) to such Indemnitor of any of the representations OP Units and/or Common Shares by any Contributor (or warranties of Seller direct or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Eventsindirect owner thereof), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” . Notwithstanding anything contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement herein to the contrary, the OP Indemnified Parties shall look first to available insurance proceeds (including without limitation any title insurance proceeds, if applicable), and then to the OP Units and/or Common Shares pledged by the Indemnitors pursuant to the terms of the Pledge Agreement for indemnification under this Article 2. Following the Closing and the issuance of Common Shares and/or OP Units to the applicable Indemnitors, no Acquiror OP Indemnified Party shall have recourse to any other assets of the Indemnitors other than the Common Shares and/or OP Units pledged pursuant to the Pledge Agreement. The parties hereto acknowledge and agree that the Collateral (as defined in the Pledge Agreement) pledged by each Indemnitor pursuant to the terms of the Pledge Agreement shall be entitled released to indemnification satisfy the obligations under this ARTICLE X for (i) any Losses to Agreement on a pro rata basis from each Indemnitor based on each such Indemnitor’s then-applicable Pro Rata Share. For purposes of the extent such Losses are reflected in foregoing, each Indemnitor’s “Pro Rata Share” is determined, at the Closing Date Working Capital Statement or (ii) punitivetime of each release of the Collateral, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom dividing (i) the then-current value of any Tax benefit or Relief actually realized such Indemnitor’s Collateral that has not already been released to obligations under this Agreement, by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount then-current aggregate value of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant all Collateral that has not already been released to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification satisfy obligations under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Representation and Warranty Indemnification Agreement (Eola Property Trust)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE XSubject to Section 8.4(b), (i) Seller shall have no Acquiror obligation to indemnify Buyer Indemnified Party shall be entitled to indemnification Persons pursuant to Section 10.2(a)(i8.2(a), unless and until their aggregate amount of Losses exceeds $250,000, after which the obligation of Seller shall be to indemnify the Buyer Indemnified Persons to the full extent of such Losses and (ii) Buyer shall have no obligation to indemnify Seller Indemnified Persons pursuant to Section 8.3(a) unless and until the their aggregate amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (250,000, after which the “De Minimus Amount”) and such Acquiror obligation of Buyer shall be to indemnify the Seller Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) Persons to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the full extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceLosses.
(b) Notwithstanding the provisions of Section 10.4(a), (iThe limitations in Sections 8.4(a) the De Minimus Amount and the Indemnification Deductible 8.4(c) shall not apply with respect to Losses relating to breaches (i) any Loss arising from a breach of the representations and warranties set forth any representation or warranty made in Company Fundamental Representations Sections 3.1, 3.2(a), 3.3, 4.1 or Section 3.15 (Taxes4.2(a); , (ii) indemnification sought pursuant to Section 8.2(d) and (e), (iii) indemnification sought pursuant to Section 8.2(c), (iv) any Loss arising from a breach of any representation or warranty made in Section 3.10(a), (v) any breach of Section 5.6 (except to the Cap extent such Loss arose from any action taken after the Closing Date by the Company or its Affiliates, (vi) any Loss arising from any breach of Sections 2.2(a) or 5.2(f), or (vii) any fraudulent or intentional misrepresentation or breach. The limitation in Section 8.4(a) shall not apply with respect to Losses relating to indemnification sought pursuant to Section 7.4(a8.2(g), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party No party shall be entitled responsible to indemnification pursuant to Section 10.2(b) unless and until indemnify the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification other hereunder to the extent that claims against the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) Indemnifying Party exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price$15,000,000.
(d) For purposes of determining whether a breach of Each Party will only be liable for actual Losses, and in no event shall an Indemnifying Party have any of the representations liability for speculative, punitive, consequential or warranties of Seller multiple-based damages or Company has occurred andfor lost profits or lost business opportunities, if so, for purposes of calculating the amount of Losses relating with regard to any breach of any of the representations indemnification or warranties, the representations and warranties in this Agreementother claims hereunder, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as the extent that the Loss is to “material,” “materiality,” and “Material Adverse Effect” contained in any a third party that has become entitled to such representations and warrantiesdamages.
(e) No Seller shall have no obligation to indemnify Buyer Indemnified Party will be entitled to indemnification to the extent Persons for a breach of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(fSection 3.16(b)(iii) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party to the Contracts referred to therein recovers Losses from an Indemnified Party.
(g) In determining the amount of Company and the Company Subsidiaries for any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect breach of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant Contracts that occurred prior to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. The following provisions of this Section 7.6 shall limit the indemnification obligations hereunder.
(a) Notwithstanding An indemnifying party shall not be liable for any Damages pursuant to this Article VII unless a Claim Notice in accordance with Section 7.3(a) is given by the provisions of this ARTICLE Xindemnified party to the indemnifying party with respect thereto on or before 5:00 p.m., Central Time, on or prior to the date that is 18 months from the Closing Date; provided, however, that written claims for indemnification (i) no Acquiror Indemnified Party shall for Damages arising out of (x) a breach of any Fundamental Representations, (y) any Pro-Rated Item or (z) the Pre-Closing Liabilities may be made at any time, in each case regardless of the expiration of any applicable statute of limitations, (ii) for Damages arising out of a breach of representations and warranties contained in Section 3.17 (Taxes) may be made at any time prior to the date that is 30 days following the expiration of the statute of limitations applicable to the underlying subject matter and (iii) for Damages arising out of a breach of any covenant may be made at any time prior to the expiration of such covenant according to its terms.
(b) To the extent an indemnified party is entitled to indemnification for Damages pursuant to Section 10.2(a)(i) this Article VII, the indemnifying party shall not be liable for those Damages unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) Damages exceeds $3,550,000 525,000 (the “Indemnification Deductible”), and then only to in which event such indemnifying party shall pay or be liable for all such Damages in excess of the extent Deductible. The aggregate liability of such excess, (ii) in no event an indemnifying party under this Article VII shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) not exceed $35,500,000 10,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X The limitations in the previous two sentences shall not exceed apply to Damages to the Purchase Price.
(b) Notwithstanding the provisions extent such costs arise out of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches a breach of the any Fundamental Representations, (ii) a breach of representations and warranties set forth contained in Company Fundamental Representations or Section 3.15 3.17 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii) a breach of representations and warranties contained in Section 3.13 (▇▇▇▇▇▇▇▇ South), (vi)iv) any Pro-Rated Item, (viiiv) the Pre-Closing Liabilities, (vi) breach of any covenant or (ix) or to breaches other agreement of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) indemnifying party under this Agreement, or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Contribution, Conveyance and Assumption Agreement (USD Partners LP)
Limitations on Indemnification. (a) Notwithstanding Anything in Section 11.1 to the provisions of this ARTICLE Xcontrary notwithstanding, (i) no Acquiror Indemnified Party indemnification payment shall be entitled to indemnification made pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) 11.1 except to the extent that the amounts that would otherwise be payable under Section 11.1 taken together would aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 at least DM2,400,000 (the “Indemnification Deductible”"Minimum Amount"); provided, and then only to however, that the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible foregoing exception shall not apply with to indemnification in respect to Losses relating to breaches of any breach of the representations and warranties set forth contained in Company Fundamental Representations Sections 3.13, 3.16 or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to Article 4 or any indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), clauses (iii), (vi), (viiiy) or (ixz) or of Section 11.
1. Notwithstanding anything to breaches the contrary contained herein, any Loss in respect of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to clause (x) of Section 10.2(a)(iv) or (vii) unless and until 11.1 that is less than DM25,000 shall not be counted when determining whether the Minimum Amount has been reached; provided, however, that the full amount of Losses incurred by such Acquiror Indemnified Party that are the subject any Loss in respect of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to clause (x) of Section 10.2(a)(v11.1 that equals or exceeds DM25,000 shall be counted when determining whether the Minimum Amount has been reached. After the Minimum Amount has been met all amounts payable under Section 11.1 (including the Minimum Amount) unless and shall be payable by the Sellers until the amount of Losses incurred amounts paid by such Acquiror Indemnified Party the Sellers shall equal DM100 million (the "Maximum Amount"); provided, however, that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party Maximum Amount shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount increased by 50% of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which Purchase Price adjustment paid to the Indemnified Parties are entitled Sellers pursuant to assert a claim for indemnificationSection 1.5 of this Agreement. For purposes of this Article 11, the amount of any Loss and the amount of any indemnification payment to be made by any party shall be determined (i) without deducting therefrom any Tax benefit obtained following the date hereof by reason of the deductibility for Tax purposes of any damage, loss or payment giving rise to any such Losses Loss or indemnification payment, (ii) without including therein an increase or "gross-up" for any Tax liability that may be incurred following the date hereof by reasons of the inclusion in income of, or by reason of a reduction in tax basis as a result of, any indemnification payment received hereunder, but (iii) in case an Indemnifying Party is liable to indemnify an NFO Indemnified Party from Tax liabilities for periods prior to the Closing Date, by deducting therefrom any Tax benefits (but net of interest and penalties) obtained by the NFO Indemnified Party for periods following the Closing Date which result from the same event, circumstance or state of facts causing such Tax payment; provided, however, that in case such Tax benefit will be obtained later than the indemnification payment has to be made, the Indemnified Party will be reimbursed by the NFO Indemnified Party only at the time the benefit actually accrues to the NFO Indemnified Party. In addition, for purposes of this Article 11, the amount of any Loss and the amount of any indemnification payment to be made by any party shall be determined after by deducting therefrom (i) any insurance payment received after the value date hereof which results from the event, circumstance or state of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with facts causing the incurrence of the Losses for which indemnity is sought, Loss and (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually indemnification payment received from a third party pursuant to indemnificationwhich results from the event, contribution circumstance or otherwise state of facts causing the Loss; provided, however, that in each case such deductions from indemnification payments in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any payments and third party indemnification payments shall only be made (x) to the extent such insurance or indemnification payments have actually been obtained and (y) with respect to payments the insured or indemnified party obtains in the future, only when such benefits are actually recovered received by the insured or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal indemnified party shall they be reimbursed to the amounts so recovered or realized shall promptly be refunded indemnifying party. Notwithstanding anything to the Indemnifying Party.
(h) No Indemnified Party contrary contained herein, no Indemnitee shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect excess of any Losses which occur Loss that it actually suffers, regardless of whether one or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectmultiple guarantees have been breached.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE XThe Seller shall not be obligated to make any payment for indemnification under Section 7.02(a)(i), (iiii) no Acquiror Indemnified Party shall and (vi) hereof in excess of $10,000,000 (the "Cap"); PROVIDED, however, that with respect to Section 7.02(a)(iii), only those Losses arising out of or in connection with the failure of the Seller to perform in any material respect any of the agreements or covenants contained in this Agreement or any other Transaction Document to be entitled performed by the Seller following (rather than on or prior to) the Closing (and not subject to indemnification pursuant to under Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i7.02(a)(ii), (iv), (v), (vii), (viii), (ix), (x) and (viixi)) shall count against the Cap. The Seller shall not be obligated to pay any amounts for indemnification under Section 7.02(a)(i) until the Seller's aggregate indemnification obligations under Section 7.02(a)(i) and any Losses resulting from breaches waived or released pursuant to Section 4.09(b)(i) equal or exceed $35,500,000 500,000 (the “Cap”"Basket"); PROVIDED that, in such event the indemnifying party shall only be obligated to pay indemnification to the extent that its aggregate indemnification obligations exceed the Basket. Seller’s aggregate liability under this ARTICLE X The Seller shall not be obligated to make any payment for indemnification under Section 7.02(a)(vi) for which a claim was not made prior to the third anniversary of the Closing Date. Notwithstanding anything herein to the contrary, the Seller shall not be obligated to pay any amounts for indemnification under Section 7.02(a)(i) for any Losses incurred by an Indemnified Buyer which arise solely from liabilities for accounts receivable and Inventory for which reserves are reflected on the Final Closing Balance Sheet, until, and solely to the extent that, the amount of such Losses exceed the Purchase Priceamount of such reserves.
(b) Notwithstanding the The indemnification provisions of Section 10.4(a)this Article VII shall constitute the sole and exclusive Post Closing remedy of the parties hereto for any inaccuracy, (i) untruth, incompleteness or other breach of any representation or warranty contained in or made pursuant to this Agreement or pursuant to any agreement contemplated hereby, or for any breach of or failure to perform any covenant or agreement made in this Agreement or any agreement contemplated hereby or otherwise arising out of the De Minimus Amount transactions contemplated hereby, and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations parties hereto each waive any other remedy which they or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be any other person entitled to indemnification pursuant to Section 10.2(a)(iv) hereunder may have at law or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) equity with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policythereto.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the The amount of Losses incurred suffered by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party an indemnified party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred reduced by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating equal to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually recovery received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third indemnified party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions Loss and shall be determined on an After Tax Basis. "After Tax Basis" means the amount of this Agreement.
(i) Notwithstanding any other provision of this Agreement the Loss shall be determined with due regard to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect net of all Tax effects resulting from the receipt by the indemnified party of any Losses which occur or are increased payment against such Loss, as a result of reasonably calculated by the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase indemnified party and as reflected on such indemnified party's Tax Returns in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectits sole discretion.
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Limitations on Indemnification. Notwithstanding any provision in this Agreement to the contrary, except in the case of fraud or intentional misconduct, the indemnification obligations of Seller and Purchaser set forth in Section 6.2(a) and (b) and Section 6.3(a) and (b) shall be subject to the following:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party The Seller shall not be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) liable to the extent Purchaser Indemnitees under Section 6.2(a) until the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to in respect of indemnification pursuant to under Section 10.2(a)(i6.2(a) exceeds $3,550,000 450,000 (the “Indemnification DeductibleBasket”), and then in such event, the Seller shall only be liable for Losses to the extent such Losses exceed the Basket. Notwithstanding the foregoing, the Basket shall not apply to breaches of such excess, the Company Fundamental Representations or Section 3.18 (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(iTaxes), or breaches (ivincluding non-performance) with respect to Sections 6.2(b) – (e), . The Seller’s aggregate maximum Liability to the Purchaser Indemnitees under Section 6.2(a) shall not exceed Four Million Five Hundred Thousand Dollars (v$4,500,000) and (vii) exceed $35,500,000 (the “Cap”); [***].
(b) Purchaser shall not be liable to the Seller Indemnitees for indemnification under Section 6.3(a) until the aggregate amount of all Losses in respect of indemnification under Section 6.3(a) exceeds the Basket, and in such event, the Purchaser shall be liable only for the amount of such Losses in excess of the Basket. SellerThe aggregate amount of all Losses for which Purchaser shall be liable pursuant to Section 6.3(a) or Section 6.3(b) shall not exceed the Cap; provided that the Purchaser’s aggregate liability under this ARTICLE X maximum Liability to the Seller Indemnitees for any inaccuracy in or breach of any of the Purchaser Fundamental Representations shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amountforegoing, the Indemnification Deductible limitations set forth in Section 6.4(a) and the Cap Section 6.4(b) shall not apply to Losses based upon, arising out of, with respect to Losses relating to indemnification pursuant to or by reason of Section 7.4(i5.3(a) or to breaches Sections 6.2(c) – (e), which, for the avoidance of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X doubt, shall not exceed be subject to the Purchase PriceBasket or Cap and shall be indemnified on a dollar-for-dollar basis.
(d) For purposes of determining whether a breach of any of Notwithstanding anything in this Agreement to the representations or warranties of Seller or Company has occurred andcontrary, if soany representation and warranty contained in this Agreement or in any certificate delivered pursuant to this Agreement is qualified by materiality, such qualification will be ignored and deemed not included in such representation and warranty for purposes of calculating the amount of Losses resulting from, arising out of, or relating to any such breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantiesinaccuracy.
(e) No Each Indemnified Party will be entitled shall take, and cause their Affiliates to indemnification take, all reasonable steps to the extent mitigate any Loss upon becoming aware of any Losses event or circumstance that a court of competent jurisdiction has determined by final judgment would be reasonably expected to, or does, give rise to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)such Loss.
(f) Notwithstanding anything in this Agreement to the contrary, it is intended that the provisions of this Article VI will not result in a duplicative payment of any other provision amount required to be paid under this Agreement or reflected in the Final Closing Statement and this Article VI shall be construed accordingly. The Indemnified Party shall not be indemnified for the same Loss more than once under this Agreement, even if a claim for indemnification in respect of such Loss has been made as a result of a breach of more than one representation, warranty or covenant contained in this Agreement.
(g) Notwithstanding anything in this Agreement to the contrary and for the avoidance of doubt, none of the limitations on indemnification set forth in this Section 6.4 shall apply to any Indemnification Claims based on fraud or intentional misconduct.
(h) For the avoidance of doubt, claims arising out of or related solely to Purchaser’s operation of the Business on or after the Closing Date are the responsibility of Purchaser.
(i) Further notwithstanding anything in this Agreement to the contrary, no Acquiror Indemnified Party shall indemnification claim may be entitled brought with respect to indemnification under this ARTICLE X for (i) any Losses Loss resulting from a breach, act, omission or event that was specifically disclosed as an exception to a particular representation or warranty on the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartyDisclosure Schedules.
(gj) In determining The terms of Section 3.16(i) shall not limit the amount indemnification obligations of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party Seller pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySection 6.2(e).
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Except as provided in Section 9.5(f) and Section 9.5(g), the provisions of this ARTICLE X, (i) no Acquiror Selling Parties indemnification obligations to the Buyer Indemnified Party shall be entitled to indemnification pursuant to Parties under Section 10.2(a)(i) 9.1 will not commence unless and until the amount of Losses incurred by such Acquiror the Buyer Indemnified Party that are as a result thereof equals or exceeds in the subject of a claim (or any series of related claims) exceeds aggregate $50,000 64,480.00 (the “De Minimus Basket Amount”) and such Acquiror at which time the Selling Parties shall be obligated to indemnify the Buyer Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of Parties for all Losses incurred by all Acquiror the Buyer Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (from the “Indemnification Deductible”), and then only to the extent first dollar of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceLosses.
(b) Notwithstanding the provisions of Except as provided in Section 10.4(a9.5(f) and Section 9.5(g), (i) the De Minimus Amount and Buyer’s indemnification obligations to the Indemnification Deductible shall Seller Indemnified Parties under Section 9.2 will not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) commence unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Seller Indemnified Parties that are indemnifiable pursuant as a result thereof equals or exceeds in the aggregate the Basket Amount, at which time the Buyer shall be obligated to Section 10.2(a)(vi) exceeds $500,000, and then only to indemnify the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of Parties for all Losses incurred by all Seller Indemnified Parties from the first dollar of such Losses.
(c) Except as provided in Section 9.5(d), Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which such Seller Indemnified any of the Selling Parties are entitled to indemnification shall be liable for breaches of representations and warranties pursuant to Section 10.2(b9.1(a) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed $7,979,400.00 (the Purchase Price“General Cap Amount”).
(d) For purposes Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of determining whether a breach of Losses for which any of the representations or warranties Selling Parties shall be liable for breaches of Seller or Company has occurred andFundamental Representations, if so, for purposes of calculating the amount of Losses relating Special Representations and pursuant to any breach clause of any of Section 9.1 other than Section 9.1(a) shall not exceed $22,165,000.00 (the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events“Special Cap Amount”), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which the Buyer shall be entitled liable pursuant to indemnification Section 9.2 shall not exceed an amount equal to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)General Cap Amount.
(f) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, no Acquiror Indemnified Party Section 9.5(a), Section 9.5(b), Section 9.5(c), Section 9.5(d) and Section 9.5(e) shall not apply to Losses in connection with, incident to, resulting from or arising out of, directly or indirectly, Taxes, any intentional misrepresentation, fraud or criminal activity and such Losses shall not be entitled to indemnification under this ARTICLE X for (i) any Losses subject to the extent such Losses are reflected in Basket Amount and shall not be counted for purposes of determining whether the Closing Date Working Capital Statement General Cap Amount or (ii) punitive, consequential, indirect, incidental Special Cap Amount has been met or special damages, except to the extent any such damages are received by a third party from an Indemnified Partyexceeded.
(g) In determining Notwithstanding anything to the amount of any contrary contained herein, Section 9.5(a) shall not apply to Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationin connection with, the amount of any incident to, resulting from or arising out of, directly or indirectly, Floorplan Loan Liabilities, Compliance Liabilities, Employee Liabilities and such Losses will shall not be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal subject to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyBasket Amount.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (KAR Auction Services, Inc.)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(i10.3(a) (other than for Losses related to a breach of the representations and warranties in Section 5.6 or Section 5.7), APC shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 40,150,000 (the “Indemnification Deductible”), and then only to the extent of any such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.;
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b10.3(a), APC shall not be liable for such Losses that exceed, in the aggregate, $1,003,750,000, less the Deductible;
(c) exceeds Notwithstanding Section 10.8(a) and Section 10.8(b), to the Indemnification extent the Partnership Indemnified Parties are entitled to indemnification (i) for Losses arising from a breach of the representations and warranties in Sections 5.6 and 5.7, (ii) pursuant to Section 10.3(b), 10.3(c), 10.3(d), or 10.3(e), or (iii) for claims arising from fraud, APC shall be fully liable for such Losses without respect to the Deductible in Section 10.8(a) and the limitations in Section 10.8(b);
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a), ▇▇▇ shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess and excess. In addition, to the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a), ▇▇▇ shall not be liable for such Losses that exceed, in the aggregate, $401,500,000 less the Deductible; and
(iie) in no event shall Notwithstanding Section 10.8(d), to the aggregate amount extent the Anadarko Indemnified Parties are entitled to be paid as indemnification for Losses pursuant to Section 10.2(b) exceed or for claims arising from fraud, ▇▇▇ shall be fully liable for such Losses without respect to the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to limitations in Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights10.8(d).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Contribution Agreement and Agreement and Plan of Merger (Anadarko Petroleum Corp)
Limitations on Indemnification. Any claims for indemnity under this Agreement shall be subject to the following limitations and adjustments:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification payment for claims pursuant to Section 10.2(a)(i9.2(a)(i) unless (other than for fraud and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”Fundamental Representations) and such Acquiror Indemnified Party Section 9.2(b)(i) (other than for fraud), shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent made until the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which a Seller or the Stockholder on one hand, or Spectrum or Buyer on the other hand, may be liable under this Article 9 exceeds $50,000, in which case Sellers and the Stockholder on one hand, or Spectrum and Buyer on the other hand, shall be liable for only such Acquiror Indemnified Parties are entitled amounts in excess of $50,000;
(b) the maximum aggregate amount of indemnification payment under this Article 9 for claims pursuant to indemnification Fundamental Representations, pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”9.2(a)(ii), (iii) and then only (iv) (in each case, other than for fraud) and pursuant to Section 9.2(b)(ii), (iii) and (iv) (in each case, other than for fraud) shall in no event exceed the Purchase Price;
(c) the amount of any claim for indemnification shall be subject to adjustment to reflect (A) any actual direct or indirect income, tax benefit (taking into account the amount of any indemnification actually received) resulting therefrom to the extent Indemnified Party and (B) any insurance coverage with respect thereto;
(d) indemnification for Retained Liabilities consisting of Product Liability Claims will be subject to in Section 9.3(b) and the threshold for such excess, claims described in Section 6.13(b);
(iie) in no event shall Sellers or the aggregate amount to Stockholder be paid as liable, in the aggregate, for indemnification for claims pursuant to Section 10.2(a)(i9.2(a)(i) (other than for fraud and the Fundamental Representations), in an amount greater than five (iv)5%) of the Purchase Price, (vand claims made against the Escrow Account pursuant to Section 9.4(a) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding shall be the provisions of Section 10.4(a), (i) the De Minimus Amount sole and the Indemnification Deductible shall not apply with respect to Losses relating to breaches exclusive remedy of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) Buyer Indemnitees with respect to any claim claims pursuant to Section 10.2(a)(iv9.2(a)(i) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed (other than for fraud and the amount of the deductible applicable to such claim under the related Seller Insurance Policy.Fundamental Representations);
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (iif) in no event shall Spectrum or Buyer be liable, in the aggregate amount to be paid as aggregate, for indemnification for claims pursuant to Section 10.2(b9.2(b)(i) exceed the Cap; provided that the De Minimus Amount(other than for fraud), the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(iin an amount greater than five (5%) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred ; and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining in no event shall Sellers and the amount of any Losses Stockholder, on the one hand, and Buyer and Spectrum, on the other hand, be liable to the other for which the Indemnified Parties are entitled to assert a claim special, incidental, consequential or punitive damages, except that nothing in this clause (g) shall relieve an Indemnifying Party from liability for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by damages where an Indemnified Party subsequent becomes liable therefore to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partythird party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding any prov1s10n in this Agreement to the contrary, the respective obligations of the Parties to indemnify and hold harmless the Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, shall be limited as follows:
(a) Notwithstanding The Buyer Indemnified Parties shall not be entitled to indemnification under Section 9.l(a) for Losses unless and until the provisions aggregate amount of this ARTICLE Xsuch Losses under Section 9.l(a) exceeds $1,325,000 (the “Deductible”), (i) no Acquiror in which event the Buyer Indemnified Party Parties shall be entitled to indemnification pursuant for all such Losses in excess of the Deductible, but in no event in excess of the Cap. The Buyer Indemnified Parties shall not be entitled to indemnification under Section 10.2(a)(i9.l(a) for any Losses in respect of any misrepresentation, breach or inaccuracy unless and until the aggregate amount of such Losses relating to a single claim (or a group of claims relating to the same facts or circumstances, event or transaction) exceeds the Mini-Basket, at which point the Buyer Indemnified Parties shall be entitled to the entire amount of such claims subject to the Deductible and the Cap. Notwithstanding the foregoing, neither the Deductible nor the Mini-Basket shall apply to any claims for indemnification by the Buyer Indemnified Parties under Section 9.l(a) in connection with any inaccuracy or breach of the Fundamental Representations or any representation or warranty set forth in Section 4.17 (Tax Matters), or any claims under Section 9.l(b), Section 9.l(c), Section 9.l(d), Section 9.l(e), Section 9.l(:Q or Section 9.l(g). The Seller Indemnified Parties shall not be entitled to indemnification under Section 9.2(a) for Losses (other than with respect to any inaccuracy or breach of Section 5.1 or Section 5.7) unless and until the aggregate amount of such Losses incurred by such Acquiror exceeds the Deductible, in which event the Seller Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party Parties shall only be entitled to indemnification pursuant for all such Losses in excess of the Deductible, but in no event in excess of the Cap. The Seller Indemnified Parties shall not be entitled to indemnification under Section 10.2(a)(i9.2(a) for Losses (other than with respect to the extent any inaccuracy or breach of Section 5.1 or Section 5.7) for any Losses in respect of any misrepresentation, breach or inaccuracy unless and until the aggregate amount of all such Losses incurred by all Acquiror relating to a single claim (or a group of claims relating to the same facts or circumstances, event or transaction) exceeds the Mini-Basket, at which point the Seller Indemnified Parties for which shall be entitled to the entire amount of such Acquiror claims subject to the Deductible and the Cap.
(b) The Buyer Indemnified Parties are shall not be entitled to indemnification pursuant under Section 9.l(a) (other than with respect to any claims made in connection with any inaccuracy or breach of any Fundamental Representations) or under Section 10.2(a)(i9.l(e) exceeds $3,550,000 for Losses in excess of an amount equal to (i) the “Indemnification Deductible”), and then only to the extent of such excess, Escrow Amount plus (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i)of interest or other income earned on the Escrow Funds (such amount, (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s The aggregate amount of the liability under this ARTICLE X of Seller and Seller Parent for Losses incurred by the Buyer Indemnified Parties with respect to any claims made pursuant to Section 9.l(a) in connection with any inaccuracy or breach of the Fundamental Representations shall not exceed the Base Purchase Price. The Seller Indemnified Parties shall not be entitled to indemnification under Section 9.2(a) for Losses (other than with respect to any inaccuracy or breach of Section 5.1 or Section 5.7) in excess of the Cap. The aggregate amount of the liability of Buyer for Losses incurred by the Seller Indemnified Parties with respect to any claims made pursuant to Section 9.2(b) shall not exceed the Base Purchase Price.
(bc) Notwithstanding the provisions The amount of Section 10.4(a), any indemnifiable Loss under this Agreement shall be net of (i) the De Minimus Amount any third party insurance proceeds and the Indemnification Deductible shall not apply any indemnity, contributions or other similar payment actually recovered from any third party with respect to Losses relating to breaches thereto, in each case, net of the representations and warranties set forth in Company Fundamental Representations any deductible, coinsurance or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches cost of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses recovery actually incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply any net Tax benefit realized with respect to a Tax period beginning after the Closing Date by way of a reduction in cash Taxes or receipt of a refund of Taxes by such Indemnified Party or any Affiliate thereof with ‘respect to the Losses relating or items giving rise to such claim for indemnification in the taxable year in which the relevant indemnity payment is received, computed by comparing Taxes that would have been payable without such Losses or items and Taxes payable taking into account such Losses or items, based on Tax calculations provided by Buyer or the Companies to Seller. An Indemnified Party shall use commercially reasonable efforts (which shall not include the initiation of any litigation) to seek full recovery under all insurance policies maintained by such party and covering any Losses to the same extent as it would if such Losses were not subject to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricehereunder.
(d) For purposes of determining whether a breach of any Seller’s and Seller Parent’s indemnification obligations under Section 9.l(a), the determination of the accuracy of Seller’s representations and warranties set forth in this Agreement or warranties of in the Seller or Company has occurred and, if so, for purposes of calculating Closing Certificate and the amount of any Losses relating to arising from any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events)inaccuracy thereof, shall be read determined without giving effect regard to any qualifications or limitations as qualification of exception therein relating to “material,” ”, “material respects”, “materiality,” and ”, “Material Adverse Effect” contained or words of similar import or effect (except that, for the purposes of determining accuracy, but not applicable Losses, such terms shall be given effect as used in any such representations Section 4.4(a), Section 4.4{b), Section 4.16(b), Section 4.16(c), the last sentence of Section 4.20 and warrantiesthe defined term “Material Contract”).
(e) No Indemnified Party will The amount of indemnity payable pursuant to Section 9.1 with respect to any Loss shall be entitled to indemnification reduced to the extent of any Losses that a court of competent jurisdiction Buyer has determined already been compensated for such Loss by final judgment to have resulted from the bad faith, gross negligence or willful misconduct reason of the party seeking indemnification (provided that specific inclusion of such Loss on the bad faith, gross negligence or willful misconduct Final Closing Statement resulting in a reduction of Seller, Company or any of its Subsidiaries prior the Final Purchase Price relative to what the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Final Purchase Price would have been absent such Loss.
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover Losses or obtain any amount relating to any matter arising payment, reimbursement, restitution or indemnity under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount Article IX more than once with respect to the same loss.
(g) No Indemnifying Party shall have any liability under this Article IX for any punitive or exemplary damages, excluding any such matter pursuant damages awarded to that a third Person under a Third Party Claim.
(h) Notwithstanding anything to the contrary in this Agreement, from and after the Closing, no Buyer Indemnified Party shall have any liability to any Seller Indemnified Party in respect of, and no Seller Indemnified Party shall have (and each Seller Indemnified Party hereby irrevocably and unconditionally waives and agrees not to assert) any right (whether at law or other provisions in equity, based in Contract, tort or otherwise) against, or recourse to, any Buyer Indemnified Party in respect of any amounts paid by any Seller Indemnified Party to any Buyer Indemnified Party as a result of any indemnification claim made under this Agreement.
(i) Nothing in this Article IX shall be deemed to override any obligations with respect to the mitigation of damages under applicable Law.
(j) In any case where an Indemnified Party recovers from any third party insurer or indemnitor any amount in respect of a Loss with respect to which such Indemnified Party has received a payment of indemnification pursuant to this Agreement, such Indemnified Party shall promptly pay over to the Indemnifying Party such amount (net of any costs or expenses actually incurred in connection with such recovery) solely to the extent such amount (together with the excess of amounts which such Indemnified Party has been paid under this Article IX in respect of such Losses over amounts previously remitted to the Indemnifying Party by such Indemnified Party under this Article IX) exceeds the Losses suffered by such Indemnified Party; provided, however, that in no event shall such Indemnified Party be required to pay to the Indemnifying Party an amount of proceeds that exceeds the aggregate amount paid to such Buyer Indemnified Party pursuant to this Article IX with respect to such Losses to which such proceeds apply.
(k) Any indemnity payment under this Agreement shall be treated as an adjustment to the Purchase Price for income tax purposes unless otherwise required by Law.
(1) Notwithstanding any other provision of in this Agreement to the contrary, no Acquiror Indemnified Party past, present or future director, officer, employee, incorporator, member, partner, stockholder, subsidiary, affiliate, controlling party, entity under common control, ownership or management, vendor, service provider, agent, attorney or representative of any Company, Seller or any of their respective Affiliates (other than Seller Parent) shall be entitled to indemnification have any liability under this ARTICLE X Agreement for (i) any obligations or liabilities of Seller under this Agreement or (ii) any claim against Seller under this Agreement based on, in respect of any Losses which occur or are increased as a result of the entry into force of, or any change inby reason of, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effecttransactions contemplated by this Agreement.
Appears in 1 contract
Sources: Stock Purchase Agreement (Bway Intermediate Company, Inc.)
Limitations on Indemnification. (a) Notwithstanding The Purchaser Indemnified Parties shall not be entitled to indemnification from the provisions Sellers in respect of any Losses for which recovery is sought pursuant to Sections 9.2(a)¸ 9.2(e) and 9.2(g) (in each case, other than with respect to breaches or inaccuracies of the Fundamental Representations or the Tax Representations), except to the extent the cumulative amount of such Losses exceeds one percent (1.0%) of the Gross Purchase Price (the “Deductible Amount”), whereupon the full cumulative amount of such Losses above the Deductible Amount shall be recoverable by the Purchaser Indemnified Parties in accordance with the terms of this ARTICLE XArticle IX. For avoidance of doubt, the Deductible Amount shall not apply to any claims under Sections 9.2(b), 9.2(c), 9.2(d), 9.2(f), and 9.2(h) through (n).
(b) Except to the extent such Losses arise out of any fraud committed by the Sellers, (i) no Acquiror the Purchaser Indemnified Party Parties shall not be entitled to indemnification from the Sellers in respect of any Losses for which recovery is sought pursuant to Sections 9.2(a) (other than with respect to breaches or inaccuracies of the Fundamental Representations), 9.2(c), 9.2(d), 9.2(e) (other than with respect to breaches or inaccuracies of the Fundamental Representations), 9.2(g) (other than with respect to breaches or inaccuracies of the Fundamental Representations), 9.2(i) and 9.2(n) in excess of the sum of the Escrow Amount plus the finally determined Earn-out Amount pursuant to Section 10.2(a)(i2.4(g) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Aggregate Seller Indemnification DeductibleCap”), and then only to the extent of such excess, ; (ii) in no event shall any Seller be liable in the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(iunder Sections 9.2(a), (iv9.2(b), (v9.2(c), 9.2(i), 9.2(j), 9.2(k) or 9.2(n) for any amount that would result in indemnification payments by such Seller to the Purchaser Indemnified Parties in excess of such Seller’s Pro Rata Percentage of such payment; and (viiiii) exceed $35,500,000 (in no event shall any Seller be liable in the “Cap”). aggregate under Sections 9.2(a) through 9.2(n) for any amount that would result in indemnification payments by such Seller to the Purchaser Indemnified Parties in excess of the amount set forth opposite such Seller’s aggregate liability name in the Waterfall Spreadsheet under this ARTICLE X shall not exceed the heading “Purchase PricePrice Allocable to Seller.
(b) Notwithstanding ” For the provisions avoidance of Section 10.4(a)doubt, (i) the De Minimus Amount and the Aggregate Seller Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply to any claims with respect to Losses relating to indemnification pursuant to Section 7.4(abreaches or inaccuracies of the Fundamental Representations under Sections 9.2(a), Section 10.2(a)(ii9.2(e) or 9.2(g) or any claims under Sections 9.2(b), (iii9.2(f), (vi9.2(h), (viii9.2(j), 9.2(k), 9.2(l) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes9.2(m); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding anything herein to the provisions contrary, from and after the time at which the Purchaser Indemnified Parties no longer have the right to recover indemnification payments against the Escrow Account or the finally determined Earn-out Amount in accordance with the terms and conditions of this ARTICLE XAgreement, (i) no Seller the Purchaser Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party Parties shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification recover indemnifications payments (i) pursuant to Section 10.2(bSections 9.2(d), 9.2(g), 9.2(h), 9.2(l) exceeds and 9.2(m), solely from the Indemnification Deductible, and then only to the extent of such excess TA Funds and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(bSections 9.2(e) exceed and 9.2(f), solely from the Cap; provided that Seller whose acts or omissions were the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches direct cause of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under indemnifiable Losses, in each case, subject to the limitations set forth in this ARTICLE X shall not exceed the Purchase PriceArticle IX.
(d) For purposes No representation or warranty of determining whether the Sellers, the Company or the Blocker Companies contained herein shall be deemed untrue or incorrect, and the Sellers, the Company and the Blocker Companies shall not be deemed to have breached a breach representation or warranty, as a consequence of the existence of any of fact, circumstance or event which is disclosed in the representations Schedules in response to another representation or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties warranty contained in this Agreement, except for Section 3.7 (Financial Statements) Agreement so long as it is reasonably apparent from the face of such disclosure that such disclosure relates to the subject matter of such representation and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warrantieswarranty.
(e) No The Purchaser Indemnified Party will be entitled to Parties shall not make any claim for indemnification under this Article IX in respect of any matter, but limited to the extent dollar amount thereof, that is: (i) included in the statement of Estimated Net Working Capital, Estimated Indebtedness, Estimated Cash and Cash Equivalents or Estimated Transaction Expenses delivered by the Company; or (ii) otherwise taken into account in the calculation of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior adjustment to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Gross Purchase Price pursuant to Section 2.3.
(f) Notwithstanding The Purchaser Indemnified Parties shall take, and shall cause the Company to take, commercially reasonable steps to mitigate any other provision Loss upon becoming aware of this Agreement to the contraryany event which could reasonably be expected to, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses or does, give rise thereto, including incurring costs only to the extent such Losses are reflected in necessary to remedy the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except breach which gives rise to the extent Loss and using reasonable best efforts to pursue available remedies, contribution from or participation in any remedial action by third parties; provided Purchaser shall not be required to pay Taxes or file Tax Returns for which the Sellers’ Representative is responsible under this Agreement in order to mitigate penalties and interest with respect to such damages are received by a third party from an Indemnified PartyTaxes or Tax Returns.
(g) In determining the The amount of any and all Losses eligible for which indemnification under this Article IX shall be determined net of (i) any amounts actually recovered by an indemnified party under any insurance policies or otherwise with respect to such Losses; provided, however, that while the Indemnified Parties are entitled Purchaser is not responsible for obtaining insurance for any Losses, it shall use its commercially reasonable efforts to assert a claim seek recovery for indemnification, the amount of any such Losses will be determined after deducting therefrom from any of its or its Affiliates’ (iincluding, without limitation, the Group Companies’) then-existing insurance policies and (ii) the value of any Tax benefit or Relief actually realized by an indemnified party to the extent such Losses give rise to deductible loss, credit or expense. If, subsequent to an indemnification payment by the indemnifying party, an indemnified party receives any Tax benefit, any amounts under applicable insurance policies or any other payment in respect of a Loss pursuant to which such Indemnified Parties arising out of indemnification payment was made, then such indemnified party shall promptly reimburse the indemnifying party for any payment made or expense incurred by such indemnifying party in connection with providing such indemnification payment in an amount equal to that which was received by the incurrence indemnified party until such time as the indemnifying party is fully reimbursed.
(h) Notwithstanding anything to the contrary contained in this Article IX, no breach of any representation, warranty, covenant or agreement contained herein shall, in the absence of fraud, give rise to any right on the part of the Losses Purchaser, after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby.
(i) Any Loss for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Purchaser Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized Article IX shall be determined without duplication of recovery by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect reason of the claims state of facts giving rise to which such insurance proceedsLoss constituting a breach of more than one representation, Tax benefitswarranty, Relief covenant or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyagreement.
(hj) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement Notwithstanding anything to the extent such Indemnified Party contrary contained in this Agreement, no Seller shall have any obligation to indemnify or hold harmless the Purchaser from and against any Taxes of any Person (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Partyi) had already recovered such amount except with respect to breaches of Section 3.8(o), for any taxable period (or portion thereof) beginning after the Closing Date (or any other Losses related to any such matter pursuant Taxes), (ii) that are attributable to any transaction undertaken by the Purchaser, the Blocker Companies or the Group Companies occurring after the Closing, not including the Transaction, or (iii) except for breaches of Section 7.1(g), that are due to the unavailability in any taxable period (or portion thereof) beginning after the Closing Date of any net operating losses, credits or other provisions of this Agreement.
Tax attribute from a taxable period (ior portion thereof) Notwithstanding any other provision of this Agreement ending on or prior to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law provided, however, that the foregoing shall not apply to the adoption of depreciation methods for, or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief)expensing of, even if such entry into force or change has retroactive effectproperty acquired by the Group Companies.
Appears in 1 contract
Sources: Securities Purchase Agreement (Post Holdings, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision to the provisions of this ARTICLE X, contrary:
(i) Seller shall have no Acquiror Indemnified Party shall be entitled to indemnification pursuant to liability under Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject (x) Seller is timely and properly notified of a potential claim in accordance with Section 10.5 and (or any series of related claimsy) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to liability that Seller would have under Section 10.2(a)(i) exceeds $3,550,000 on a cumulative basis an amount equal to [. . .] (the “Indemnification DeductibleThreshold Amount”), and then only ) (in which event Purchaser shall be entitled to the extent full amount of such excess, the indemnity and not just the amount in excess of the Threshold Amount);
(ii) Purchaser shall have no liability under Section 10.1(a) unless and until (x) Purchaser is timely and properly notified of a potential claim in accordance with Section 10.5 and (y) the aggregate liability that Purchaser would have under Section 10.1(a) exceeds on a cumulative basis an amount equal to the Threshold Amount (in which event Seller shall be entitled to the full amount of the indemnity and not just the amount in excess of the Threshold Amount), provided, however, that in no event shall the aggregate Purchaser have any obligation to indemnify under Section 10.1(a) for any amount to the extent that such amount, when aggregated with all other amounts payable as a result of indemnification under Section 10.1(a) would be paid in excess of the Initial Payment plus any Subsequent Payments; and
(iii) Except as indemnification pursuant provided in Section 10.3(b) below, in no event shall Seller have any obligation to indemnify under Section 10.2(a)(i10.2(a), Section 10.2(b) or Section 10.2(c) for any amount, to the extent that such amount, when aggregated with all other amounts payable as a result of indemnification under Section 10.2(a), Section 10.2(b) and/or Section 10.2(c) would be in excess of the Initial Payment plus any Subsequent Payments.
(iv)) In no event shall Seller have any obligation to indemnify under Section 10.2(c) for any amount, (vto the extent such amount, when aggregated with all other amounts payable as a result of the indemnification under Section 10.2(c) and (vii) exceed $35,500,000 (the “Cap”)would be in excess of [. Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price. .].
(b) Notwithstanding In no event shall the provisions limitations on indemnification provided in subsection (a) of this Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not 10.3 apply to indemnification with respect to those matters listed in Section 10.2(a)(ii) through 10.2(a)(ix), as to which there shall be no limit on recovery for indemnification and Purchaser shall be entitled to recover all Losses relating from Euro one with no time limit for recovery thereof.
(c) With respect to breaches any breach by Seller of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap 3.6 hereof, any claim by Purchaser for indemnification shall not apply with respect be subject to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000Threshold Amount, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party Purchaser shall be entitled to recover any amount relating to any matter arising under one provision and all Losses from Euro one. Notwithstanding the foregoing sentence, Seller shall have no liability for breaches of this Agreement to the extent such Indemnified Party Section 3.6(a) unless and until (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other x) Seller Indemnified Parties in the event is timely and properly notified of a potential claim in accordance with Section 10.5 and (y) the aggregate liability for Seller Indemnified Partyfor breaches of Section 3.6 (a) had already recovered such exceeds on a cumulative basis an amount with respect equal to such matter pursuant [. . .]. Back to that or other provisions of this Agreement.Contents
(id) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect[. . .]
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply Except with respect to Losses relating to breaches of the representations and warranties in Sections 3.1, 3.2, 3.3, 3.13, 4.1, 4.2, and 4.5 or claims pursuant to Sections 8.2(b) or 8.2(c) or 8.3(b) or 8.3(c), Seller shall have no obligation to indemnify the Buyer Indemnified Parties against Losses pursuant to Section 8.2, and Buyer shall have no obligation to indemnify the Seller Indemnified Parties against Losses pursuant to Section 8.3, unless and until the aggregate of all such Losses suffered or incurred by Buyer Indemnified Parties or Seller Indemnified Parties, as applicable, for which indemnification is sought exceeds $300,000 (the “Basket Amount”) (in which event the Buyer Indemnified Parties or Seller Indemnified Parties, as applicable, shall be entitled to indemnification for the full amount including the Basket Amount, subject to the other limitations set forth in Company Fundamental Representations or this Article VIII).
(b) Notwithstanding anything to the contrary herein, Seller shall be obligated to indemnify the Buyer Indemnified Parties against Losses under Section 3.15 8.2 only up to the Holdback Amount (Taxes); (ii) less any fees deducted by the Cap shall not apply with respect to Losses relating to indemnification Escrow Agent from the Holdback Amount pursuant to Section 7.4(athe terms of the Escrow Agreement), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches other than Losses based on a breach of the representations and warranties set forth made in Company Fundamental Representations Sections 3.1, 3.2, 3.3 and 3.13, or Losses under Section 3.15 (Taxes8.2(b) or 8.2(c); (iii) no Acquiror Indemnified Party , all of which Losses in the aggregate shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or capped at the Purchase Price (vii) unless and until which, for the amount avoidance of Losses incurred by such Acquiror Indemnified Party that are doubt, is inclusive of the subject of a claim (or any series of related claims) exceeds $250,000Holdback Amount), and then only in any case of fraud (which will be interpreted to include the extent element of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(bscienter), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim resulting therefrom shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policybe capped.
(c) Notwithstanding any provision herein to the provisions contrary, if Seller is obligated to indemnify or reimburse any Buyer Indemnified Party for any indemnification claim in accordance with this Article VIII, the Buyer Indemnified Parties shall in all cases first exhaust the Holdback Amount in full before seeking recovery directly from Seller.
(d) Each of Seller and Buyer acknowledges, on behalf of itself and on behalf of the other Seller or Buyer Indemnified Parties, that the sole and exclusive remedy thereof with respect to all claims for breach of this ARTICLE XAgreement, other than claims for fraud (iwhich will be interpreted to include the element of scienter) no or a suit seeking specific performance or any other equitable remedy to require a party hereto to perform its obligations under this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VIII. In furtherance of the foregoing, each of Seller and Buyer hereby waives, on behalf of itself and each of the other Seller or Buyer Indemnified Parties, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action each may have against the other for any breach of this Agreement (except pursuant to the indemnification provisions set forth in this Article VIII), other than with respect to claims for fraud (which will be interpreted to include the element of scienter) or a suit seeking specific performance or any other equitable remedy to require a party hereto to perform its obligations under this Agreement.
(e) Upon payment in full of any claim or judgment pursuant to Section 8.4, the Indemnifying Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only subrogated to the extent of such excess and (ii) in no event shall payment to the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed rights of the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply Indemnified Party against any Person with respect to Losses relating to indemnification pursuant to Section 7.4(i) the subject matter of such claim or to breaches judgment. The Indemnified Parties shall assign or otherwise reasonably cooperate with the Indemnifying Party, at the cost and expense of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of Indemnifying Party, to pursue any of the representations claims against, or warranties of Seller otherwise recover amounts from, any Person liable or Company has occurred and, if so, responsible for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually indemnification has been received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
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Limitations on Indemnification. (a) Notwithstanding the provisions The amount of any Losses for which indemnification is provided under this ARTICLE X, Section 7 shall be net of any amounts (i) no Acquiror recovered by an Indemnified Party shall be entitled to indemnification or its Affiliates under or pursuant to Section 10.2(a)(iany insurance policy, and (ii) unless recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and until has received funds in the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of Losses, then a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled refund equal to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only recovery shall be made promptly to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceIndemnifying Party.
(b) Notwithstanding anything herein to the provisions of Section 10.4(a)contrary, (i) the De Minimus Amount and the Indemnification Deductible Company shall not apply with respect be liable to the Subscriber Indemnified Parties for any Losses relating pursuant to breaches Section 7.2(a)(i) and/or Section 7.2(a)(iii) which, individually considered, do not exceed an amount equal to US $100,000 (the “De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(a)(i) and/or Section 7.2(a)(iii) unless a series of similar events arising from the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes)same circumstances exceed the De Minimis Exclusion; (ii) the Cap Company shall not apply with respect be liable to the Subscriber Indemnified Parties for any Losses relating to indemnification pursuant to Section 7.4(a7.2(a)(i) and/or Section 7.2(a)(iii), Section 10.2(a)(ii), (iii), (vi), (viii) other than in respect of Fraud or (ix) or to breaches breach of the representations and warranties set forth in any Company Fundamental Representations or Section 3.15 Representation, until the aggregate amount of such Losses (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification excluding, for the avoidance of doubt, any Losses pursuant to Section 10.2(a)(iv7.2(a)(i) or (viiand/or Section 7.2(a)(iii) unless and until which, individually considered, do not exceed the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claimsDe Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the sum Company shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (1iii) the reserve Company shall not be liable to the Subscriber Indemnified Parties for the applicable workers compensation claim set forth on Schedule 10.4(bany Losses pursuant to Section 7.2(a)(i), other than in respect of Fraud or breach of any Company Fundamental Representation, in excess of US $4,000,000, subject to the extent such reserve is reflected in Final Net Working Capital plus other limitations herein; (2iv) $250,000, and then only the Company shall not be liable to the extent Subscriber Indemnified Parties for any Losses pursuant to Section 7.2(a)(iii), other than in respect of such excessFraud, in excess of US $12,000,000, subject to the other limitations herein; and (v) no Acquiror Indemnified Party the Company shall not be entitled liable to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Subscriber Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $500,00038,548,333.33, and then only subject to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policyother limitations herein.
(c) Notwithstanding anything herein to the provisions contrary, (i) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(b)(i) and/or Section 7.2(b)(iii) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the Subscriber shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, in excess of US $4,000,000, subject to the other limitations herein; and (iv) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this ARTICLE XAgreement, other than in respect of Fraud, in excess of US $38,548,333.33, subject to the other limitations herein.
(d) Notwithstanding anything herein to the contrary, (i) no Seller Indemnified Indemnifying Party shall be entitled will have any obligation to indemnification pursuant indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to Section 10.2(b) unless and until such Claim Notice or a written agreement is entered into by the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess parties; and (ii) in no event shall where substantially the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) same events or to breaches circumstances qualify under one or more single or multiple claims or under one or more provisions of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence the Indemnified Party shall not be entitled to double or duplicative recovery of Certain Changes Losses arising out of such events or Events)circumstances, shall be read without giving effect or to any qualifications calculate its Losses by duplicating or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any double counting its Losses arising out of such representations and warrantiesevents or circumstances.
(e) No In the event that the Company has an obligation to indemnify any Subscriber Indemnified Party for any Losses under this Section 7, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Subscriber Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 7.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Subscriber Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Subscriber Indemnified Party in the form attached hereto as Exhibit C (the “Indemnity Warrant”), that will be entitled entitle the Subscriber Indemnified Party to indemnification a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct Ordinary Shares of the party seeking indemnification Company are traded over-the-counter (provided that OTC) or in any stock exchange, shall be equivalent to the bad faith, gross negligence or willful misconduct Company’s Ordinary Shares VWAP for the period of Seller, Company or any of its Subsidiaries thirty (30) consecutive trading days ending on the trading day immediately prior to the Closing date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall not affect Acquiror Indemnified Parties’ indemnification rights)be US $0.01.
(f) Notwithstanding In the event that any Subscriber has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 7, the Subscriber shall pay the amount of such Losses within ten (10) Business Days (or any other provision of this Agreement to date agreed in writing by the contrary, no Acquiror Subscriber and such Company Indemnified Party shall be entitled to indemnification under this ARTICLE X for (iParty) any Losses to the extent after such Losses have been finally determined and are reflected owed by the Subscriber in the Closing Date Working Capital Statement or (iiaccordance with Section 7.4(d) punitive, consequential, indirect, incidental or special damages, except by wire transfer of immediately available funds to the extent any an account designated in writing by such damages are received by a third party from an Company Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Each Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties agrees that in the event of any breach giving rise to an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered indemnification obligation under this Section 7 such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled take and shall cause its Affiliates to indemnification under this ARTICLE X take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in respect of any Losses which occur or are increased as a result order to take, all reasonable measures to mitigate the consequences of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority related breach (including taking steps to prevent any increase in the Tax rates or any new Tax or any withdrawal of Reliefcontingent liability from becoming an actual liability), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Subscription and Conversion Agreement (Procaps Group, S.A.)
Limitations on Indemnification. (a) Notwithstanding anything in this Agreement to the provisions of this ARTICLE Xcontrary, (i) no Acquiror (A) Seller shall not have any liability under Section 8.01(a) (other than with respect to a breach of Section 3.01 (Organization, Standing and Corporate Power), Section 3.02 (Authority; Execution and Delivery; Enforceability), Section 3.08 (Certain Business Assets), Section 3.20 (Sufficiency of Assets) and Section 3.21 (Brokers and Finders)(the “Specified Representations”)) unless the aggregate liability for Losses suffered by the Purchaser Indemnified Party Parties thereunder exceeds [***], in which event Seller shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until liable for all such Losses from the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) first dollar and (viiB) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
Section 8.01(a) (b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply other than with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties Specified Representations) shall not exceed [***] and (ii) (A) Purchaser shall not have any liability under Section 8.02(a) (other than with respect to a breach of Section 4.01 (Organization and Standing) and Section 4.06 (Brokers and Finders) (the “Purchaser Specified Representations”)) unless the aggregate liability for Losses suffered by the Seller or Company has occurred andIndemnified Party thereunder exceeds [***], if so, in which event Purchaser shall be liable for purposes of calculating all such Losses from the amount of Losses relating first dollar; (B) Purchaser’s aggregate liability under Section 8.02(a) (other than with respect to any a breach of any of the representations or warranties, Purchaser Specified Representations) shall not exceed [***] and (C) Purchaser’s aggregate liability under Section 8.02(a) with respect to a breach of the representations and warranties Purchaser Specified Representations shall not exceed [***]. The limitations set forth in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), 8.04 shall not be read without giving effect applicable to any qualifications Losses incurred in connection with or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent a result of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faithfraud, gross negligence intentional or willful misrepresentation, intentional or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or intentional or willful misconduct concealment by or on behalf of Seller, Company Seller or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Affiliates.
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement:
(a) Notwithstanding solely with respect to claims for indemnification under Section 10.01(a), except in the provisions case of this ARTICLE XFraud, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party Seller shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount liable for [*****] of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are Purchaser Indemnitees would otherwise (but for the provisions of this paragraph) be entitled to assert a claim for indemnificationindemnification under Section 10.01(a); provided, however, that Seller shall not have any liability under Section 10.01(a) until the aggregate amount of any all Losses indemnifiable by Seller thereunder exceeds an amount equal to $[*****], in which event Seller shall be required to pay or be liable for all such Losses will be determined after deducting therefrom from the first dollar of Loss;
(ib) except in the value case of Fraud, Seller’s aggregate maximum liability under Section 10.01(a) shall not exceed $[*****] (the “Indemnity Cap”);
(c) except in the case of Fraud, Seller’s aggregate maximum liability under Section 10.01(b) shall not exceed [*****];
(d) Seller’s aggregate maximum liability under Section 10.01(e) shall not exceed $[*****];
(e) with respect to any Tax benefit Third Party Claim based upon, resulting from or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence operation of the Losses for which indemnity is soughtChelsea Facility, (ii) or the amount ownership, occupancy, use, sale, license or lease of any insurance proceeds from a third-party insurer actually received by the Transferred Assets, both on or prior to the Closing Date and after the Closing Date, Seller’s obligation to indemnify the Purchaser Indemnitees under Section 10.01(d), on the one hand, and Purchaser’s obligation to indemnify the Seller Indemnitees under Section 10.02(d), on the other hand, with respect to such Indemnified Parties in Third Party Claim shall be based on Seller’s and Purchaser’s relative fault or other responsibility with respect to the subject matter of such LossesThird Party Claim;
(f) no party shall have any liability for an otherwise indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the Indemnified Party and is due and payable, in each case net of costs and expenses incurred by so long as the claim for such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party Loss was timely submitted pursuant to indemnificationthe provisions of this Article X;
(g) no party shall be liable for any Losses to the extent the Purchaser Indemnitees or the Seller Indemnitees, contribution or otherwise in respect of any Losses. All Indemnified Parties shall as applicable, failed to use commercially reasonable efforts to mitigate all such Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.accordance with applicable Laws; and
(h) No no party shall be liable for any otherwise indemnifiable Loss arising out of any breach of any representation, warranty, covenant or agreement of such party unless a claim therefor is asserted by the Indemnified Party within the applicable Survival Period specified in Section 10.09, failing which such claim shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementwaived and extinguished.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party No amount shall be entitled payable by Seller to indemnification any Purchaser Party pursuant to Section 10.2(a)(i12.2(a) (other than Section 12.2(a)(ii)) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred Damages indemnifiable by all Acquiror Indemnified Parties Seller under Section 12.2(a) (except for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i12.2(a)(ii)) exceeds $3,550,000 an amount (the “Indemnification DeductibleSeller Basket”) equal to three hundred twenty-four million Yen (¥324,000,000), and then only to at which point Seller shall become liable for all such Damages, including the extent of such excess, (ii) Damages reflected in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceSeller Basket.
(b) Notwithstanding anything to the provisions of Section 10.4(a), contrary contained in this Agreement:
(i) the De Minimus Amount and the Indemnification Deductible shall not apply maximum amount of aggregate indemnifiable Damages which may be recovered from Seller under Section 12.2(a)(i) (other than with respect to Losses relating a Specified Rep) shall be an amount equal to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 four billion nine hundred million Yen (Taxes¥4,900,000,000); ;
(ii) the Cap shall not apply maximum amount of aggregate indemnifiable Damages which may be recovered from Seller under Section 12.2(a)(i) with respect to Losses relating a Specified Rep (other than a Fundamental Rep) shall be an amount equal to indemnification pursuant to Section 7.4(aeleven billion six hundred million Yen (¥11,600,000,000), Section 10.2(a)(ii), ;
(iii) the maximum amount of aggregate indemnifiable Damages which may be recovered from Seller under Sections 12.2(a)(v) (Pre-Closing Warranties), (vi) (Amorton Business), (viii) or (Third Party Licenses), (x) (Company Transaction Expenses), (xii) (Gas Contracts), (xiii) (Employee Inventions), and (xiv) (Company Demerger), shall be an amount equal to fifty percent (50%) of the Purchase Price as may be adjusted pursuant to Section 1.4;
(iv) the maximum amount of aggregate indemnifiable Damages which may be recovered from Seller under (1) Section 12.2(a)(i) with respect to a Fundamental Rep, (2) pursuant to any of Sections 12.2(a)(iii) (Purchase Price Adjustment), (iv) (Taxes), (vii) (Patent Licenses), (ix) or to breaches (Known Claims), (xi) (Environmental) and (xv) (Reorganization) and (3) Section 12.2(a)(ii) in respect of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party any breach of any pre-Closing covenant that did not constitute a Willful Breach, shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), Purchase Price as may be adjusted pursuant to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; Section 1.4
(v) Notwithstanding the foregoing, in no Acquiror Indemnified Party event shall be entitled to indemnification pursuant to Section 10.2(a)(vi(x) until the aggregate amount of Losses incurred Damages recoverable from Seller by the Acquiror Indemnified Purchaser Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(csubsections of Section 12.2(a) Notwithstanding the provisions of this ARTICLE X, (ireferred to in Sections 12.5(b)(i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b12.5(b)(ii) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
eleven billion six hundred million Yen (d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events¥11,600,000,000), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Except for the provisions of specific exceptions contained in this ARTICLE XSection 8.3(a), (i) no Acquiror the Parent Indemnified Party shall Parties will not be entitled to seek indemnification pursuant to under Section 10.2(a)(i) 8.1 unless and until the amount aggregate of all Parent Losses incurred by such Acquiror the Parent Indemnified Party that are the subject of a claim (or any series of related claims) Parties exceeds $50,000 600,000 (the “De Minimus "Shareholder Basket Amount”) and such Acquiror "). In the event that the aggregate of all Parent Losses exceeds the Shareholder Basket Amount, the Parent Indemnified Party shall Parties will only be entitled to seek indemnification in respect of Parent Losses in excess of the Shareholder Basket Amount, but in no event will the Shareholder's obligations for Parent Losses pursuant to Section 10.2(a)(i8.1 be greater than the Escrow Shares and Dividend Account (as defined in the Escrow Agreement) held pursuant to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 Escrow (the “Indemnification Deductible”"Shareholder Maximum Indemnity"); provided, and then only to however, that the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Shareholder Basket Amount and the Indemnification Deductible shall not apply with respect to Parent Losses relating arising under: (i) Section 8.1(a) with respect to breaches any breach or inaccuracy of any representation or warranty made by the representations Company in Sections 4.1(a), 4.2, 4.3, 4.4, 4.15, fines and warranties set forth in Company Fundamental Representations penalties under Section 4.17, 4.19 or Section 3.15 (Taxes)4.20; or (ii) Section 8.1(b), with respect to a willful breach by the Cap Company of the covenants contained in Article 6.
(b) The Shareholder Indemnification Parties will not be entitled to seek indemnification under Section 8.2 for Shareholder Losses unless and until the aggregate amount of all Shareholder Losses incurred by the Shareholder Indemnification Parties exceeds $600,000 (the "Parent Basket Amount"). In the event that the aggregate of all Shareholder Losses exceeds the Parent Basket Amount, the Shareholder Indemnification Parties will only be entitled to seek indemnification in respect of Shareholder Losses in excess of the Parent Basket Amount, but in no event will Parent's obligation for Shareholder Losses be greater than the product of the number of Escrow Shares transferred to the Escrow multiplied by the Average Closing Price (the "Parent Maximum Indemnity"); provided, however, that the Parent Basket Amount shall not apply with respect to Shareholder Losses relating to indemnification pursuant to arising under (i) Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi8.2(a) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) breach or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company inaccuracy or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contraryrepresentation or warranty made by Parent in Sections 5.1, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement 5.2, 5.3 or 5.7 or (ii) punitiveSection 8.2(b), consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to willful breach by the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result Parent of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase covenants contained in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectArticle 6.
Appears in 1 contract
Limitations on Indemnification. (a) The indemnification provided for in each of Section 10.3(a) and Section 10.3(b) is subject to the following limitations:
(i) subject to Section 10.5(a)(ii) the Stockholders shall not be liable to the Buyer Indemnified Parties for any Losses (A) with respect to the matters described in Section 10.3(a) unless such Losses exceed an aggregate amount equal to $3,600,000 (the “Deductible Amount”) and then only for Losses in excess of the Deductible Amount and (B) in excess of $55,000,000 (the “Cap”) in the aggregate for the Stockholders with respect to Section 10.3(a) and Section 10.3(b) (except that any Losses resulting from Stockholder Indemnifiable Losses shall not be subject to the Cap, but shall be subject to the limitations set forth in Section 10.5(a)(vii));
(ii) without limiting the generality of the foregoing, any Losses arising out of any particular facts and circumstances shall not be entitled to indemnification under Section 10.3(a) and shall not be indemnifiable or counted toward satisfaction of the Deductible Amount unless they exceed $25,000 in the aggregate;
(iii) subject to Section 10.5(a)(ii), Buyer and Surviving Corporation shall not be liable to the Stockholder Indemnified Parties for any Losses (A) with respect to the matters described in Section 10.4(a) unless such Losses exceed an aggregate amount equal to the Deductible Amount and then only for Losses in excess of the Deductible Amount and (B) in excess of the Cap in the aggregate for Buyer with respect to Section 10.4(a) (except that any Losses resulting from Stockholder Indemnifiable Losses shall not be subject to the Cap, but shall be subject to the limitations set forth in Section 10.5(a)(vii));
(iv) neither the Stockholders nor Buyer shall have any obligations under or liabilities from and after the applicable Survival Date; provided that any claim for indemnity made by a Buyer Indemnified Party, in accordance with the terms of this Article X prior to the expiration of the applicable Survival Date will survive beyond the applicable Survival Date until such claim is finally and conclusively resolved;
(v) neither a Buyer Indemnified Party, nor the Buyer Indemnified Parties as a group or class, shall be entitled to recover from the Stockholders pursuant to this Article X more than once in respect of the same Losses suffered, and neither a Stockholder Indemnified Party, nor the Stockholder Indemnified Parties as a group or class, shall be entitled to recover from Buyer or Surviving Corporation pursuant to this Article X more than once in respect of the same Losses suffered;
(vi) each Buyer Indemnified Party and Stockholder Indemnified Party shall use its reasonable best efforts to mitigate any indemnifiable Loss, and in the event that a Buyer Indemnified Party or Stockholder Indemnified Party fails to so mitigate an indemnifiable Loss, the Stockholders, Buyer or Surviving Corporation (as Indemnified Party) shall have no liability for any portion of such Loss that reasonably could have been avoided had the Buyer Indemnified Party or Stockholder Indemnified Party, as applicable, made such efforts;
(vii) Notwithstanding anything to the contrary herein but subject to the provisions of this ARTICLE Section 10.5(a)(vii), with respect to any Losses with respect to which any of the Buyer Indemnified Parties is entitled to indemnification under or pursuant to this Article X, the sole and exclusive remedy and source of recovery shall be the funds in the General Escrow Account except as follows:
(iA) no Acquiror there shall be a right of indemnification against the Stockholders, which shall not be subject to the Deductible Amount or the Cap, for any Losses resulting from fraud or a breach of any Fundamental Representation for which Buyer is entitled to indemnification pursuant to Section 10.3(c) or 10.3(d); provided, that if at any time any funds remain in the General Escrow Account, the Buyer Indemnified Parties shall first seek recovery from the funds in the General Escrow Account with respect to any such Losses prior to seeking indemnification from any Stockholder; and
(B) for any Losses for which Buyer is entitled to indemnification pursuant to Section 10.3(e), there shall be a right of indemnification against the Stockholders which shall not be subject to the Deductible Amount or the Cap, and the General Escrow Account shall not be available to satisfy such indemnification. To the extent that any Buyer Indemnified Party shall be entitled to indemnification hereunder from the Stockholders for any Losses set forth in clause (a) of this Section 10.5(a)(vii) (other than a breach of a Fundamental Representation made pursuant to Article III) with respect to which a Buyer Indemnified Party has not received in full an indemnification payment hereunder and no funds then remain in either the General Escrow Account or Merger Consideration Escrow Account (or in the case of an indemnification for a Loss specified in clause (b) of this Section 10.2(a)(i) unless and until 10.5(a)(vii), whether or not such funds remain in such escrow accounts), then each Stockholder party hereto shall indemnify such Buyer Indemnified Party for the amount of Losses incurred such Loss multiplied by a fraction, the numerator of which is the cash Merger Consideration actually paid to such Acquiror Stockholder hereunder, and the denominator of which is the aggregate cash Merger Consideration actually paid to all Fully Diluted Common Holders (it being acknowledged and agreed that such indemnification obligation is several and not joint as among the Stockholders). In the case of a breach of a Fundamental Representation made pursuant to Article III, only the Stockholder or Stockholders who have so breached such Fundamental Representation shall indemnify a Buyer Indemnified Party and only up to the amount of the Cash Merger Consideration actually paid to such Stockholder or Stockholders; and
(viii) Notwithstanding anything to the contrary herein, (i) the parties acknowledge and agree that are no Stockholder or holder of Common Stock Options that is not a signatory hereto has any liability or obligations pursuant to this Article X; and (ii) with respect to any claim for fraud by any Buyer Indemnified Party, the subject of a limitations set forth in this Article X shall apply solely to any claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to for indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent this Article X made in respect of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricefraud.
(b) Notwithstanding anything to the contrary herein, except as provided in Section 2.11 (Post-Closing Merger Consideration Adjustment), Section 6.6 (Directors’ and Officers’ Exculpation; Indemnification), Article VIII (Tax Matters), Article XI (Termination) or Section 12.6 (Equitable Relief), and except in the case of fraud and for the right of specific performance, from and after the Closing the rights and remedies of Buyer, the Company, the Stockholders’ Representative and the Stockholders, and any Buyer Indemnified Party (each Buyer Indemnified Party is referred to herein as an “Indemnified Party”), under this Article X are exclusive and in lieu of any and all other rights and remedies which Buyer, the Company, the Surviving Corporation, the Stockholders’ Representative, or the Stockholders, or any Indemnified Party, may have under this Agreement or any Ancillary Agreement or otherwise against each other with respect to this Agreement or any Ancillary Agreement and with respect to the transactions contemplated hereby or thereby, and Buyer, the Company, the Surviving Corporation, the Stockholders’ Representative and the Stockholders each expressly waives and releases and agrees to waive and release any and all other rights or causes of action it or its Affiliates may have against the other party or its Affiliates now or in the future under any Law with respect to the preceding matters. In furtherance of the foregoing, subject to the exceptions set forth in the preceding sentence, each of the parties hereby waives, on behalf of itself and each of the other Indemnified Parties, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (other than claims and causes of action based on actual fraud) that it may have against any other parties to this Agreement or any Ancillary Agreement with respect to this Agreement or any Ancillary Agreement or in respect of the transactions contemplated hereby or thereby arising under or based upon any applicable Law or otherwise (except pursuant to the indemnification provisions set forth in this Article X, or the provisions of Section 10.4(a), 2.11 (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(aPost-Closing Merger Consideration Adjustment), Section 10.2(a)(ii6.6 (Directors’ and Officers’ Exculpation; Indemnification), Article VIII (iiiTax Matters), Article XI (vi), (viiiTermination) or Section 12.6 (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (TaxesEquitable Relief); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Endo International PLC)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to To the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a)(i10.3(a) (other than for Losses related to a breach of the representations and warranties in Section 5.6 or Section 5.7), APC shall not be liable for those Losses unless the aggregate amount of Losses exceeds $3,550,000 40,150,000 (the “Indemnification Deductible”), and then only to the extent of any such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.;
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)In addition, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(b10.3(a), APC shall not be liable for such Losses that exceed, in the aggregate, $1,003,750,000, less the Deductible;
(c) exceeds Notwithstanding Section 10.8(a) and Section 10.8(b), to the Indemnification extent the Partnership Indemnified Parties are entitled to indemnification (i) for Losses arising from a breach of the representations and warranties in Sections 5.6 and 5.7, (ii) pursuant to Section 10.3(b), 10.3(c), 10.3(d), or 10.3(e), or (iii) for claims arising from fraud, APC shall be fully liable for such Losses without respect to the Deductible in Section 10.8(a) and the limitations in Section 10.8(b);
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a), WES shall not be liable for those Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess and excess. In addition, to the extent the Anadarko Indemnified Parties are entitled to indemnification for Losses pursuant to Section 10.2(a), WES shall not be liable for such Losses that exceed, in the aggregate, $401,500,000 less the Deductible; and
(iie) in no event shall Notwithstanding Section 10.8(d), to the aggregate amount extent the Anadarko Indemnified Parties are entitled to be paid as indemnification for Losses pursuant to Section 10.2(b) exceed or for claims arising from fraud, WES shall be fully liable for such Losses without respect to the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to limitations in Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights10.8(d).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Contribution Agreement and Agreement and Plan of Merger (Western Gas Partners LP)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the foregoing provisions of Section 10.4(a)11.2, except in the event of fraud, intentional misrepresentation or intentional wrongdoing by either of the Sellers, (i) the De Minimus Amount and the Indemnification Deductible Sellers shall not apply with respect be liable, pursuant to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations Section 11.2(i) or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to for any Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and suffered by any Buyer Indemnitee until the amount aggregate of all Losses incurred claimed by such Acquiror Indemnified Party that are the subject of Buyer Indemnitees thereunder exceeds, on a claim (or any series of related claims) exceeds $250,000cumulative basis, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of any such excess; (ii) the Sellers shall not be liable pursuant to Section 11.2(i) for individual items relating to a breach of a representation or warranty in Sections 4.5 or 4.12 where the Loss relating thereto is less than $5,000, and the aggregate of all such Losses is less than $20,000; (iii) the aggregate liability of the Sellers pursuant to Section 11.2 (but not pursuant to Section 11.3) for Losses suffered by the Buyer Indemnitees shall in no event exceed $5,000,000; and (viiv) without limiting the limitation set forth in the preceding clause (iii), the aggregate liability of the Sellers pursuant to Section 11.2 (but not pursuant to Section 11.3) for Losses suffered by the Buyer Indemnitees with respect to any claim matters or claims of which Sellers first receive notice pursuant to Section 10.2(a)(iv11.5 after the eighteen (18) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim month anniversary of the Closing Date shall in no event exceed $3,000,000 in the aggregate. The limitation set forth in the preceding clause (iv) shall not exceed apply to any matter or claim that, directly or indirectly, relates to or arises out of or in connection with, or results from, any matter(s) or claim(s) of which Sellers have been notified pursuant to Section 11.5 before the amount eighteen (18) month anniversary of the deductible applicable Closing Date.
(b) Neither party hereto shall be liable to any indemnitee for punitive damages or such claim under the related Seller Insurance Policyother party’s lost profits claimed by such other party resulting from such first party’s breach of its representations, warranties or covenants hereunder.
(c) Notwithstanding The Buyer acknowledges and agrees that, should the Closing occur, its sole and exclusive remedy with respect to any and all claims relating to this Agreement, the Facility, the Purchased Assets, the Excluded Assets, the Assumed Liabilities or the transactions contemplated hereby (other than claims of, or causes of action arising from, fraud, intentional misrepresentation or intentional wrongdoing by either Seller) shall be pursuant to the indemnification provisions of set forth in this ARTICLE XArticle XI, and that amounts held by the Escrow Agent pursuant to the Closing Escrow Agreement shall constitute (i) no Seller Indemnified Party shall be entitled to indemnification the sole and exclusive source of recourse for the Buyer Indemnitees in connection with any claims made pursuant to Section 10.2(b11.2 (other than claims of, or causes of action arising from, fraud, intentional misrepresentation or intentional wrongdoing by either Seller) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) a non-exclusive source of recourse for the Buyer Indemnitees in no event shall the aggregate amount to be paid as indemnification connection with any claims made pursuant to Section 10.2(b) exceed 11.3. In furtherance of the Cap; provided that the De Minimus Amountforegoing, the Indemnification Deductible Buyer hereby waives, from and after the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(iClosing, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud, intentional misrepresentation or intentional wrongdoing by either Seller) the Buyer or to breaches of any other Buyer Indemnitee may have against the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company Sellers or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.their
Appears in 1 contract
Sources: Asset Purchase Agreement (American Retirement Corp)
Limitations on Indemnification. (a) Notwithstanding the provisions Except with respect to breaches of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Indemnifiable Taxes, (ii) the Seller Fundamental Representations and (iii) the representations and warranties in Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim 4.15 (or any series of related claims) exceeds $50,000 Environmental Matters), Section 4.16 (the “De Minimus Amount”Employee Benefit Matters), Section 4.17 (Taxes) and such Acquiror in Section 4.29 (Proxy Statement), the Stockholders shall not be required to indemnify or hold harmless the Parent Indemnified Party shall only be entitled to indemnification pursuant to Parties for Losses under Section 10.2(a)(i9.2(a)(i) to the extent and Section 9.2(a)(v): (x) until the aggregate amount of all such Losses incurred by all Acquiror Indemnified Parties for with respect to which such Acquiror Indemnified Parties are entitled to indemnification pursuant to a Claim Notice was delivered in accordance with Section 10.2(a)(i) 9.3 exceeds $3,550,000 500,000 (the “Indemnification DeductibleBasket Amount”), in which event the Stockholders shall be obligated to indemnify the Parent Indemnified Parties solely for amounts in excess of the Basket Amount; and then only to the extent of such excess, (iiy) in no event shall if the aggregate amount Losses of the Parent Indemnified Parties with respect to be paid as indemnification pursuant to which Claim Notices were delivered in accordance with Section 10.2(a)(i), (iv), (v) and (vii) 9.3 exceed $35,500,000 10,000,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding anything in this Agreement to the provisions of Section 10.4(a)contrary, (i) the De Minimus Amount and the Indemnification Deductible shall not apply except with respect to Losses relating to resulting or arising from (i) Indemnifiable Taxes, (ii) breaches of the representations and warranties set forth in Company Fundamental Representations Section 4.17 or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) fraud or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000intentional misrepresentation, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount liability of the Seller Agreement Parties for Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to under Section 10.2(a)(vi9.2 (a) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not in any event exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyMerger Consideration.
(c) Notwithstanding the provisions For purposes of this ARTICLE XIX, (i) no Seller Indemnified Party the determination of Losses resulting or arising from such breach shall be entitled made without regard to indemnification pursuant any materiality qualification (including any reference to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) Business Material Adverse Effect or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricematerial adverse effect).
(d) For purposes No right of determining whether a breach indemnification hereunder shall be limited by reason of any investigation or audit conducted before or after the Closing or the knowledge of the representations or warranties any party of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of a representation, warranty or covenant by the other parties at any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Lossestime. All The Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In have the event that any insurance proceedsright, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party irrespective of any indemnification payment hereunder in respect knowledge or investigations to rely fully on the representations warranties and covenants of the claims to which such insurance proceedsParent and Merger Sub and the Seller Agreement Parties, Tax benefitsas applicable, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partycontained herein.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Merger Agreement (Universal Business Payment Solutions Acquisition Corp)
Limitations on Indemnification. (a) Notwithstanding anything in this Agreement to the contrary, (i) Seller shall not have any liability under clause (iii) of Section 9.01(a), and Buyer shall not have any liability under clause (iii) of Section 9.01(b), in each case, unless the aggregate liability for Losses suffered by the Buyer Indemnified Parties or the Seller Indemnified Parties, as the case may be, thereunder exceeds $2,500,000, and then, subject to the following clause (ii), to the extent of the full amount of such Losses, (ii) the aggregate liability of Seller or Buyer, as the case may be, under clause (iii) of Section 9.01(a) or 9.01(b) shall not in either case exceed 40% of the Final Purchase Price, (iv) no party shall be responsible, pursuant to Sections 9.01(a) and (b), for any indemnifiable Losses suffered by the Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, to the extent arising out of any breach of any representation or warranty or covenant or agreement of such party herein unless a claim therefor is asserted with specificity and in writing by the Indemnified Party, failing which such claim shall be waived and extinguished, (v) no party shall be responsible for any indemnifiable Loss suffered by an Indemnified Party to the extent arising from (A) a change in accounting or taxation law, policy or practice made after Closing, other than a change required to comply with any law, policy or practice in effect at the date hereof, or (B) any legislation not in force at Closing or any change of law or administrative practice which takes effect retroactively or occurs as a result of any increase in the rates of taxation in force at the date hereof and (vi) no party shall be responsible for any indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the Indemnified Party and is due and payable, so long as the claim for such Loss was timely submitted pursuant to the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party Article IX. The written waiver of any condition to Closing with respect to any inaccuracy of any representation or warranty or any failure to perform or comply with any covenant or agreement shall be entitled deemed a waiver of the right to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceArticle IX with respect to such inaccuracy or failure to perform or comply.
(b) Notwithstanding the provisions of Section 10.4(a)Buyer acknowledges and agrees that, (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of other than the representations and warranties set forth of Seller specifically contained in Company Fundamental Representations Article III or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a)Montvale Agreement, Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) there are no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company any other person either expressed or implied with respect to the Business, the transactions contemplated hereby or the Transferred Assets or Assumed Liabilities, individually or collectively. Without limiting the foregoing, Buyer acknowledges that Buyer, together with its advisors, has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any made its own investigation of the representations or warrantiesTransferred Assets, the representations Assumed Liabilities and the Business and is not relying on any implied warranties or upon any representation or warranty whatsoever as to the prospects (financial or otherwise), or the viability or likelihood of success, of the Businesses, except as expressly provided in this Agreement. Without limiting the generality of the foregoing, Buyer acknowledges and agrees that, except as expressly provided in this Agreement or the Montvale Agreement, neither Seller nor any of its Affiliates makes any representations or warranties relating to the maintenance, repair, condition, design, performance or marketability of any Transferred Asset, including merchantability of fitness for Section 3.7 (Financial Statements) a particular purpose. Buyer acknowledges and Section 3.9 (Absence agrees that it shall obtain rights in the Transferred Assets in their present condition and state of Certain Changes or Events)repair, shall be read without giving effect to any qualifications or limitations “as to “material,” “materiality,is” and “Material Adverse Effect” contained where is”, except as expressly provided in this Agreement. Except as expressly set forth in this Agreement or any such representations other Transaction Agreement, Buyer acknowledges and warranties.
(e) No Indemnified Party will be entitled agrees that it shall have no claim or right to indemnification pursuant to the extent of this Article IX (or otherwise) with respect to any Losses that a court of competent jurisdiction has determined information, documents or materials furnished to or for Buyer by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company any of its Affiliates, or any of its Subsidiaries prior or their officers, directors, employees, agents or advisors, including the Confidential Information Memorandum dated July 2003 (the “Information Memorandum”) regarding the Business provided to Buyer and any information, documents or material made available to Buyer in any “data room”, management presentation or any other form in expectation of the Closing shall not affect Acquiror Indemnified Parties’ indemnification rightstransactions contemplated hereby (other than claims of, or causes of action arising from, fraud).
(fc) Notwithstanding Buyer further acknowledges and agrees that, should the Closing occur, its sole and exclusive remedy with respect to any and all claims relating to this Agreement, the Business, the transactions contemplated hereby and the Transferred Assets (other than claims of, or causes of action arising from, fraud) shall be pursuant to the indemnification provisions set forth in this Article IX. In furtherance of the foregoing, Buyer hereby waives, from and after the Closing, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud) that it or any other provision Buyer Indemnified Party may have against Seller or any of its Affiliates arising out of this Agreement to the contraryand under or based upon any Federal, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement state, local or (ii) punitiveforeign statute, consequentiallaw, indirectordinance, incidental rule or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution regulation or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount including with respect to such matter environmental matters generally and any matters under the Comprehensive Environmental Response, Compensation, and Liability Act (except pursuant to that or other the indemnification provisions of set forth in this AgreementArticle IX).
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. The Party making a claim under this Article VIII is referred to as the “Indemnified Party,” and the Party against whom such claims are asserted under this Article VIII is referred to as the “Indemnifying Party.” The indemnification provided for in Section 8.2 and Section 8.3 shall be subject to the following limitations:
(a) Notwithstanding The Indemnifying Party shall not be liable to the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to for indemnification pursuant to under Section 10.2(a)(i8.2(a), Section 8.2(b), Section 8.3(a), or Section 8.3(b) unless and as the case may be, until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to in respect of indemnification pursuant to under Section 10.2(a)(i8.2(a), Section 8.2(b) and Section 8.2(c), on the one hand, or on the other hand, Section 8.3(a) and Section 8.3(b) exceeds $3,550,000 200,000 (the “Indemnification Deductible”), and then in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceDeductible.
(b) Notwithstanding the provisions The aggregate amount of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible all Losses for which Seller shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification be liable pursuant to Section 7.4(a)8.2(b) as the case may be, Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy$5,000,000.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the The aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification an Indemnifying Party shall be liable pursuant to Section 10.2(b8.2(a), Section 8.2(c), Section 8.3(a), or Section 8.3(b) exceeds as the Indemnification Deductiblecase may be, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price$1,000,000.
(d) For purposes In no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of determining whether a future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.
(e) Seller shall not be liable under this Article VIII for any Losses based upon or arising out of any inaccuracy in or breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties contained in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence Agreement if Buyer had knowledge of Certain Changes such inaccuracy or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries breach prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)Closing.
(f) Notwithstanding any other provision of the foregoing, Buyer and Seller agree that this Agreement to the contrary, no Acquiror Indemnified Party Section 8.4 shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement not apply where a Fraud Claim is brought by either Buyer or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartySeller.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding anything to the provisions of contrary set forth in this ARTICLE X, Agreement:
(i) no Acquiror except in the case of fraud or a breach of the Fundamental Representations, the Indemnifying Parties shall not have any obligation to indemnify the Indemnified Party shall be entitled to indemnification Parties pursuant to Section 10.2(a)(i8.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”8.2(b)(i), and then only to the extent of such excessas applicable, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable would otherwise be subject to indemnification pursuant to Section 10.2(a)(vi8.2(a)(i) or Section 8.2(b)(i), as applicable, exceeds $500,000850,124.73 (the “Basket”), and then only whereupon the applicable Indemnified Parties shall be entitled to receive amounts for its Losses in excess of the extent Basket;
(ii) except in the case of such excessfraud or a breach of the Fundamental Representations, in no event shall the cumulative indemnification obligations of the Seller pursuant to Section 8.2(a)(i) or the Buyer pursuant to Section 8.2(b)(i), in each case, in the aggregate exceed $11,334,996.35;
(iii) except in the case of fraud, in no event shall the cumulative indemnification obligations of the Seller pursuant to Section 8.2(a) or the Buyer pursuant to Section 8.2(b) exceed the total amount paid by the Buyer pursuant to this Agreement; and and
(viiv) the liability of Seller for any Losses under Section 8.2(a)(iv) with respect to any claim pursuant to Section 10.2(a)(ivIndemnified Environmental Liabilities shall (i) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim terminate on the third (3rd) anniversary of the Closing Date; and (ii) shall not exceed $1,800,000 (the “Environmental Indemnity Cap”); provided; however, that to the extent the costs for investigation and/or remediation of the Indemnified Environmental Liabilities (including restoration costs) exceed $1,000,000, such costs shall above such amount be borne ninety percent (90%) by the Seller and ten percent (10%) by the Buyer, with Seller bearing such costs in an amount up to the Environmental Indemnity Cap.
(b) For purposes of determining the failure of any representations or warranties to be true and correct or the breach of any covenant and for calculating the amount of the deductible any Losses under this Article 8, each such representation and warranty or covenant shall be read without regard to any qualification or reference to “materiality”, “material”, “Material Adverse Effect” or other similar materiality qualifications or references contained in or otherwise applicable to such claim under the related Seller Insurance Policyrepresentation or warranty or covenant.
(c) Notwithstanding The amount of any Loss for which indemnification is provided under this Article 8 shall be reduced by any amounts actually recovered by any Indemnified Party under insurance policies, with respect to such Loss (less any costs of collection and increases in premium) or otherwise actually received from any third parties (which the provisions Buyer shall be under no obligation to collect). To the extent that any amount is recovered by any Indemnified Party under an insurance policy or any other source of this ARTICLE Xindemnification after the date that an indemnity payment is made hereunder, (i) no Seller then such Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification pay over to the extent the aggregate amount Indemnifying Party such amounts (less any costs of all Losses incurred by all Seller Indemnified Parties for which collection and increases in premium) no later than ten (10) Business Days after such Seller Indemnified Parties proceeds are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricereceived.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating No Indemnifying Party shall be liable to any breach of Indemnified Party for any of the representations or warranties, the representations and warranties punitive damages in this Agreementconnection with any Claim, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as the extent such punitive damages are awarded to “material,” “materiality,” and “Material Adverse Effect” contained a third party in any connection with such representations and warrantiesa Claim.
(e) No Indemnified Party will be entitled Notwithstanding the limitations of Section 9.8, the Buyer shall have the right, without the prior consent of the Seller, to assign its rights to indemnification under Section 8.2(a)(iv) and Section 8.6 to any successor to the extent of Buyer and any Losses that such successor shall have a court of competent jurisdiction has determined by final judgment similar right to have resulted from further assign the bad faith, gross negligence or willful misconduct of the party seeking rights to indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or hereunder upon any of its Subsidiaries prior such assignment and notice thereof to the Closing Seller. The Seller shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement be liable to such successor in all respects as if such successor were the contrary, no Acquiror Indemnified Party Buyer hereunder and each such successor shall be entitled to enforce its indemnification under this ARTICLE X for (i) any Losses rights hereunder directly against the Seller. No such assignment shall relieve the Seller of its obligations to the extent Buyer or such Losses are reflected in other assignor hereunder and, without limiting the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence generality of the Losses for which indemnity is soughtforegoing, (ii) each of the amount of any insurance proceeds from a third-party insurer actually received by Buyer and such Indemnified Parties in respect of other assignor shall be entitled, despite such Lossesassignment, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled its rights to indemnification under this ARTICLE X. In by the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySeller hereunder.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Equity Interest Purchase Agreement (Mammoth Energy Services, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 above is subject to the following limitations:
(a) No Person will be liable hereunder with respect to claims referred to in Section 8.1 or Section 8.2 above unless the other party gives written notice thereof (together with a reasonably detailed description of the claim and the basis thereof) prior to the 12 month anniversary of the Closing Date. Notwithstanding any implication to the provisions contrary contained in this Agreement, so long as a party delivers written notice of this ARTICLE Xa claim no later than the 12 month anniversary of the Closing Date, (i) no Acquiror Indemnified Party the other party shall be entitled required to indemnification pursuant indemnify hereunder for all Damages which such parties may incur (subject to Section 10.2(a)(iany limitations set forth herein) unless and until in respect of the amount of Losses incurred by such Acquiror Indemnified Party that matters which are the subject of such claim, regardless of when incurred.
(b) The holders of the Notes shall not be liable to the iPayment Indemnitees for any Damages arising under Section 8.1 above (1) unless (A) the aggregate amount of any Damages as a claim (result of, in connection with, relating or incidental to or by virtue of any particular breach or series of related claims) breaches exceeds $50,000 10,000 (the “De Minimus Amount”"ECX Threshold"), in which case all such Damages, including the initial $10,000, shall be included in the calculation of Damages under, and indemnifiable pursuant to, clause (B), and (B) and the aggregate amount of all such Acquiror Indemnified Party shall Damages exceeds (but only be entitled to indemnification pursuant to Section 10.2(a)(ithe extent such Losses exceed) $100,000 in the aggregate (the "ECX Basket"), or (2) to the extent the aggregate amount of all Losses incurred such Damages indemnified by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) the holders of the Notes exceeds $3,550,000 3,000,000 (the “Indemnification Deductible”"ECX Cap"); provided that the foregoing limitations (i.e., and then only to the extent of such excessECX Threshold, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount ECX Basket and the Indemnification Deductible ECX Cap) shall not apply with respect to Losses relating any Damages arising from or related to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller ECX set forth in Section 4.5(e) or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights8.1(b).
(fc) Notwithstanding any other provision of this Agreement iPayment shall not be liable to the contraryECX Indemnitees for any Damages arising under Section 8.2 above (1) unless (A) the aggregate amount of any Damages as a result of, no Acquiror Indemnified Party in connection with, relating or incidental to or by virtue of any particular breach or series of related breaches exceeds $10,000 (the "iPayment Threshold"), in which case all such Damages, including the initial $10,000, shall be entitled to indemnification under this ARTICLE X for included in the calculation of Damages under, and indemnifiable pursuant to, clause (iB), and (B) any Losses the aggregate amount of all such Damages exceeds (but only to the extent such Losses are reflected exceed) $100,000 in the Closing Date Working Capital Statement aggregate (the "iPayment Basket"), or (ii2) punitive, consequential, indirect, incidental or special damages, except to the extent any the aggregate amount of all such damages are received Damages indemnified by a third party from an Indemnified Partythe holders of the Notes exceeds $3,000,000 (the "iPayment Cap").
(gd) In determining the amount of any Losses The amounts for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount an indemnifying party shall be liable under Sections 8.1 and 8.2 of any such Losses will this Agreement shall be determined after deducting therefrom (i) the value net of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or benefits and insurance proceeds that may be available to the indemnified party in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal facts giving rise to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyright of indemnification.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Merger Agreement (Ipayment Inc)
Limitations on Indemnification. (a) Notwithstanding Except with respect to claims with respect to (x) any inaccuracy in or breach of a Fundamental Representation, the provisions representation and warranty with respect to Controlled Group Liability contained in Section 3.17 (Employee Matters) or any breach of any covenant or agreement (other than the covenants and agreements in Section 6.1 (Conduct of Business)) of any party to this ARTICLE XAgreement and (y) claims pursuant to Section 9.2(a)(i) (Tax Indemnification) to the extent related to Transfer Taxes and claims pursuant to Section 9.2(a)(ii) (Tax Indemnification), in no event shall the applicable party or parties from whom indemnification is being sought pursuant to this Agreement (ithe “Indemnifying Party”) no Acquiror Indemnified Party be obligated to indemnify any Buyer Indemnitee pursuant to Section 8.2(a) or 8.2(b) (Obligations of the Sellers) or 9.2(a) (Tax Indemnification)) unless the aggregate of all Losses incurred by such Buyer Indemnitee exceeds $7,500,000 (the “Threshold”), after which time such Buyer Indemnitee shall be entitled to indemnification for all Losses incurred by it in excess of the Threshold up to the amount of the Cap. Notwithstanding the foregoing, except in respect of any claims pursuant to Section 10.2(a)(i9.2(a)(i) unless (Tax Indemnification) to the extent related to Transfer Taxes and until claims pursuant to Section 8.2(a) (iii) and Section 9.2(a) (ii) (Tax Indemnification), in no event shall such Indemnifying Party be obligated to indemnify any Buyer Indemnitee pursuant to Section 8.2 (Obligations of the Sellers) or Section 9.2(a) (Tax Indemnification) with respect to any individual item or series of related items of Loss that is of an amount less than $250,000 (which amount shall be an aggregate amount in the case of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”items of Loss) and no such Acquiror Indemnified Party item or series of related items, as the case may be, shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to applied toward the extent calculation of whether the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled Buyer Indemnitee exceeds the Threshold.
(b) Except with respect to indemnification (i) claims with respect to any inaccuracy in or breach of a Fundamental Representation of any party to this Agreement and (ii) claims pursuant to Section 10.2(a)(i9.2(a)(i) exceeds $3,550,000 or (the “Indemnification Deductible”v) (Tax Indemnification), and then only in each case, to the extent of such excessrelated to Transfer Taxes, (ii) in no event shall the aggregate amount any Indemnifying Party be obligated to be paid as indemnification indemnify any Buyer Indemnitee pursuant to Section 10.2(a)(i8.2 (Obligations of the Sellers), or Section 9.2(a)(i), (iii), (iv) or (v) (to the extent that Section 9.2(a)(v) (Tax Indemnification) relates to the items set forth in clause (i), (viii) and (viiiv) exceed of Section 9.2(a) (Tax Indemnification)) in excess of $35,500,000 65,000,000 in the aggregate (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only anything to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b)contrary in this Agreement, to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the Indemnifying Parties have any liability individually or in the aggregate under this Agreement for any obligation to indemnify any Buyer Indemnitee in excess of an amount equal to be paid (x) the Closing Purchase Price, as indemnification adjusted by the Purchase Price Adjustment Amount pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches Sections 1.6 (Adjustment of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
), 1.7 (d) For purposes Holdback), 1.8 (Post-Closing Statements), 1.9 (Reconciliation of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Post-Closing Statements) and Section 3.9 1.10 (Absence of Certain Changes or EventsPost-Closing Adjustment for Purchase Price Adjustment Amount), shall be read without giving effect minus (y) the aggregate amount paid by the Indemnifying Parties to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party Buyer Indemnitee pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to its indemnification obligations under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
Article VIII (h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of ReliefIndemnification), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Securities Purchase Agreement (Duane Reade Holdings Inc)
Limitations on Indemnification. (a) Notwithstanding The representations and warranties made in this Agreement shall terminate upon the provisions twelve (12) month anniversary of this ARTICLE Xthe Closing Date, except for the Fundamental Representations, which shall survive as follows: the representations and warranties in Section 3.10 (Tax Matters), Section 3.11 (Environmental Matters), and Section 3.14 (Employee Benefits) shall survive until sixty (60) days following the expiration of the statute of limitations applicable thereto (giving effect to any waiver, mitigation or extension thereof) and all other Fundamental Representations shall survive in perpetuity.
(b) Subject to Section 8.3(d), PHMD's maximum aggregate liability to Purchaser Indemnified Persons for indemnification (including costs incurred in the defense of such claim) under (i) no Acquiror Indemnified Party Section 8.1(a)(i) (other than with respect to Fundamental Representations) shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless not exceed $3,600,000; and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) Section 8.1 and Section 9.2, in no event the aggregate, shall not exceed the aggregate amount to be paid as indemnification pursuant Purchase Price. Subject to Section 10.2(a)(i8.3(d), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s Purchaser's maximum aggregate liability to Seller Indemnified Persons for indemnification (including costs incurred in the defense of such claim) under this ARTICLE X Section 8.1 shall not exceed the Purchase Price.
(bc) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror No Purchaser Indemnified Party Person shall be entitled to indemnification pursuant to Section 10.2(a)(iv8.1(a)(i) or (viiother than with respect to Fundamental Representations which shall not be subject to the limitations of this Section 8.3(c)) unless and until the amount of aggregate Losses incurred by all Purchaser Indemnified Persons in respect of all claims under Section 8.1(a)(i) (other than with respect to Fundamental Representations) collectively exceeds $450,000 whereupon Purchaser Indemnified Persons shall only be entitled to indemnification hereunder (subject to the other provisions of this Article VIII) from PHMD for all such Acquiror Losses incurred by Purchaser Indemnified Party that Persons in excess of such $450,000 threshold.
(d) The amount of any Losses for which indemnification is provided under this Agreement shall be reduced by (i) any amounts realized by the Indemnified Person as a result of any indemnification, contribution or other payment by any third party, (ii) any insurance proceeds actually recovered by any Indemnified Person (which amount shall be reduced by the amount by which insurance premiums for the Indemnified Person are increased as a direct result of the subject of a claim Losses for which such insurance proceeds were received by the Indemnified Person) or any amounts actually recovered by any Indemnified Person pursuant to any indemnification agreement with any Person and (iii) any Tax savings actually realized by the Indemnified Person (or its Affiliate) in the taxable year in which the Loss is incurred. The Indemnified Persons shall use their commercially reasonable efforts to pursue any series claims for insurance, Tax benefits, indemnification, contribution and/or other payments available from third parties with respect to Losses for which it will seek, or has sought, indemnification hereunder.
(e) Notwithstanding anything to the contrary in this Agreement, the limitations, thresholds and qualifications set forth in this Article VIII: (i) shall not apply in the case of related claimsfraud or willful breach, or (ii) exceeds $250,000in any manner preclude an Indemnified Person from seeking any non-monetary equitable remedy, including specific performance or a preliminary or permanent injunction.
(f) No claim for indemnification may be made by a Purchaser Indemnified Person and then only no indemnification shall be required to the extent that the Losses sustained or incurred by such Purchaser Indemnified Person for which indemnification is sought were treated and taken into account as a liability in the Working Capital.
(g) Subject to Section 8.3(f), the indemnification provided in this Article VIII and in Section 9.2 (including all limitations contained herein) shall be the sole and exclusive remedy for all matters relating to this Agreement, the transactions contemplated hereby, and for the breach of any representation, warranty, covenant or agreement contained herein, and Purchaser and PHMD each expressly waive any and all claims which it may have with respect to the foregoing, other than any Indemnification Claims to the extent provided for in this Article VIII and in Section 9.2.
(h) The representations, warranties, covenants and obligations of a Party and the rights and remedies that may be exercised by the Indemnified Persons based on such excess; representations, warranties, covenants and obligations, will survive and not be limited or affected by any investigation conducted by any Indemnified Person with respect to, or any knowledge acquired (ivor capable of being acquired) by such Indemnified Person at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of, or compliance with or performance of, any such representation, warranty, covenant or obligation, and no Acquiror Indemnified Person shall be required to show that it relied on any such representation, warranty, covenant or obligation of a Party shall in order to be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementArticle VIII.
(i) Notwithstanding any other provision Solely for the purpose of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification calculating Losses arising under this ARTICLE X Article VIII in respect of a breach of any Losses which occur representation or are increased as a result warranty (but, for the avoidance of doubt, not for the entry into force of, or purpose of determining whether any change in, after the Closing Datesuch breach occurred), any Law Material Adverse Effect, materiality, material or any practice of any Governmental Authority (including any increase similar limitation set forth in the Tax rates such representation or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectwarranty shall be disregarded.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding any other provision of this Agreement:
(a) Notwithstanding NO CLAIMS OR CAUSES OF ACTION ARISING UNDER OR RESULTING FROM THIS AGREEMENT OR ANY OF THE TRANSACTIONS MAY BE ASSERTED BY ANY PERSON FOR PUNITIVE, SPECIAL, EXEMPLARY, CONTINGENT, INCIDENTAL, SPECULATIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR REVENUE), EXCEPT TO THE EXTENT SUCH DAMAGES WERE REASONABLY FORESEEABLE.
(b) Except in the provisions case of Fraud, Seller shall not be required to indemnify any Purchaser Indemnified Party under Section 8.2(a)(i) or Section 8.2(b) for any Loss unless the amount of such Loss with respect to any individual matter, or group of matters arising out of the same or a substantially similar set of facts, circumstances or events, exceeds $10,000, and any individual Losses disregarded pursuant to this ARTICLE X, Section 8.5(b) shall not be applied toward the determination of the maximum liability under Section 8.5(j).
(c) The Seller shall not be liable to the Purchaser Indemnified Parties for indemnification under this Article VIII for any Losses arising under (i) no Acquiror Section 8.2(a)(ii) until the aggregate amount of such Losses exceeds $100,000 (the “Deductible”), at which point the Purchaser Indemnified Parties shall be entitled to all recoverable Losses only in excess of the Deductible, (ii) Section 8.2(f) until the aggregate amount of such Losses exceeds $250,000 (the “Specified Litigation Deductible”), at which point the Purchaser Indemnified Parties shall be entitled to all recoverable Losses only in excess of the Specified Litigation Deductible, or (iii) Section 8.2(g) until the aggregate amount of such Losses exceeds the deductible applicable to the Specified Employee Claims pursuant to the Seller’s insurance policy covering such Specified Employee Claims (the “Specified Employee Claims Deductible”), at which point the Purchaser Indemnified Parties shall be entitled to all recoverable Losses only in excess of the Specified Employee Claims Deductible.
(d) The aggregate amount of all Losses for which the Seller shall be liable pursuant to (i) Section 8.2(a)(i), Section 8.2(b), Section 8.2(c), Section 8.2(d), Section 8.2(e), Section 8.2(f), Section 8.2(g) and Section 8.2(h) shall not exceed the aggregate amount of the Purchase Price and (ii) Section 8.2(a)(ii) shall not exceed $4,000,000 (the “Indemnification Cap”).
(e) The aggregate amount of all Losses for which the Purchaser shall be liable under Section 8.3 shall not exceed the Indemnification Cap.
(f) The amount an Indemnified Party shall be entitled to indemnification pursuant receive from the Indemnifying Party with respect to Section 10.2(a)(i) unless any Loss shall be reduced by and until the amount net of Losses incurred by any recovery payable to such Acquiror Indemnified Party from any other Person with respect to such Loss (including insurance proceeds, indemnification rights, counterclaims, warranties, subrogation actions and the like). Purchaser shall, and shall cause the Company and each applicable Company Subsidiary to, use commercially reasonable efforts to seek recovery under all insurance policies covering any Losses to the same extent as they would if such Losses were not subject to indemnification hereunder. In the event that are an insurance or other third party recovery is made by Purchaser, the subject of Company, a claim (Company Subsidiary or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror their Affiliates with respect to any Losses for which any Purchaser Indemnified Party shall only be entitled has been indemnified by the Seller hereunder, then a refund equal to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only recovery shall promptly be made to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(bg) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror No Purchaser Indemnified Party shall be entitled to receive indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected or the matters giving rise thereto were taken into account in the determination of the Closing Date Net Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence any component of the Losses for which indemnity is sought, Closing Date Debt or Company Transaction Expenses (ii) it being the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect intention of the claims to which Parties that the procedures set forth in Section 2.4 shall constitute the sole and exclusive remedies for such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyclaims).
(h) No Indemnified Party shall After becoming aware of any event or occurrence that could reasonably be expected to give rise to an indemnification right hereunder, each Person entitled to recover any amount relating indemnification shall take all commercially reasonable steps to any matter mitigate Losses arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementtherefrom.
(i) Notwithstanding The Seller shall not be required to indemnify any other provision of this Agreement Purchaser Indemnified Party to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect extent of any Losses which occur caused by or are increased as a result resulting from the gross negligence or willful misconduct of Purchaser.
(j) In no event shall the cumulative indemnification obligations of the entry into force ofSeller under Section 8.2(a)(i) or Purchaser under Section 8.3 exceed the Purchase Price (as adjusted pursuant to Section 2.4); provided, however, the foregoing limitations shall not apply to or otherwise limit any change inclaims relating to Fraud.
(k) Any indemnification obligation under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such obligation constituting a breach of more than one representation, after the Closing Datewarranty, any Law covenant or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectagreement hereunder.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement:
(a) Notwithstanding solely with respect to claims for indemnification under Section 10.01(a), except in the case of fraud, Seller shall only be liable for any and all of the Losses for which the Purchaser Indemnitees would otherwise (but for the provisions of this ARTICLE X, (iparagraph) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to under Section 10.2(a)(i10.01(a); provided, however, that Seller shall not have any liability under Section 10.01(a) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred indemnifiable by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled Seller thereunder exceeds an amount equal to indemnification pursuant to Section 10.2(a)(iSeventy-Five Thousand Dollars ($75,000) exceeds $3,550,000 (the “Indemnification DeductibleIndemnity Basket”), and then only in which event Seller shall be required to the extent pay or be liable for all such Losses in excess of such excessthreshold;
(b) except in the case of Fraud, Seller’s aggregate maximum liability under Section 10.01(a) shall not exceed twenty percent (ii20%) in no event shall of the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 Purchase Price (the “Indemnity Cap”). ;
(c) except in the case of Fraud, Seller’s aggregate maximum liability under this ARTICLE X Section 10.01(b) and Section 10.01(c) shall not exceed the Purchase Price.;
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vid) with respect to any claim pursuant Third Party Claim based upon, resulting from or arising out of the operation of the Princeton Facility, or the ownership, occupancy, use, sale, license or lease of the Transferred Assets, both on or prior to Section 10.2(a)(iv) that is covered by a Seller Insurance Policythe Closing Date and after the Closing Date, Seller’s indemnification obligation to indemnify the Purchaser Indemnitees, on the one hand, and Purchaser’s obligation to indemnify the Seller Indemnitees, on the other hand, with respect to such claim Third Party Claim shall not exceed be based on Seller’s and Purchaser’s relative fault or other responsibility with respect to the amount subject matter of such Third Party Claim;
(e) no party shall have any liability for an otherwise indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the deductible applicable Indemnified Party and is due and payable, so long as the claim for such Loss was timely submitted pursuant to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE Article X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).;
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party party shall be entitled to indemnification under this ARTICLE X liable for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement Purchaser Indemnitees or (ii) punitivethe Seller Indemnitees, consequentialas applicable, indirect, incidental or special damages, except failed to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all such Losses in accordance with applicable Laws;
(g) no party shall be liable for any otherwise indemnifiable Loss arising out of any breach of any representation, warranty, covenant or agreement of such party unless a claim therefor is asserted by the Indemnified Party within the applicable Survival Period specified in Section 10.09, failing which such Indemnified Parties are entitled or may claim shall be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.waived and extinguished; and
(h) No Indemnified Party Seller shall not be entitled to recover liable for any amount relating to any matter Loss arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of from an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementAssumed Tax Liability.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding anything to the provisions of contrary in this ARTICLE XArticle VII or elsewhere in this Agreement, in no event shall any Seller be required to provide indemnification with respect to any claim for indemnification made pursuant to Section 7.2(b)(i) or Section 7.2(c)(i): (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iif the Losses associated with such claim (or group of related claims arising out of the same or similar circumstances) are less than Twenty-Five Thousand Dollars ($25,000) (the “De Minimis Claim Amount”); or (ii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate dollar amount of all Losses incurred by all Acquiror of the Purchaser Indemnified Parties for which all such Acquiror Indemnified Parties are entitled to indemnification claims that would otherwise be indemnifiable pursuant to Section 10.2(a)(i7.2(b)(i) or Section 7.2(c)(i) (but without giving effect to any Loss or Losses below the De Minimis Claim Amount) exceeds One Million Five Hundred Thousand Dollars ($3,550,000 1,500,000) (the “Indemnification Deductible”); provided, and then only to the extent of such excesshowever, (ii) in no event shall that if the aggregate amount of all such Losses exceeds the Indemnification Deductible, the Purchaser Indemnified Parties shall be entitled to be paid as indemnification pursuant to Section 10.2(a)(i)for the full amount of all such Losses and not just the amount in excess of the Indemnification Deductible; and provided further, (iv)that notwithstanding the foregoing, (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Minimis Claim Amount and the Indemnification Deductible shall not apply with to the Fundamental Representations and, accordingly, any claims by a Purchaser Indemnified Party in respect to Losses relating to breaches of a Fundamental Representation of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party Sellers shall be entitled to indemnification pursuant to Section 10.2(a)(ivindemnified hereunder from the first dollar of any applicable Losses.
(b) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only Notwithstanding anything to the extent of such excess; contrary in this Article VII or elsewhere in this Agreement, in no event shall any Seller be required to provide indemnification (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vii) with respect to any claim for indemnification made pursuant to Section 10.2(a)(iv7.2(b)(i) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation or Section 7.2(c)(i) (other than with respect to the Fundamental Representations), in an amount exceeding such claim Seller’s allocable portion of the Indemnification Cap, determined by such Seller’s Equity Interest Percentage; provided, however, the Indemnification Cap shall not exceed apply to Losses suffered by the amount Purchaser Indemnified Parties as a result of inaccuracies in or breaches of the deductible applicable Fundamental Representations of the Sellers, which shall be excluded in calculating when the Indemnification Cap is reached, (ii) with respect to any claim for indemnification made pursuant to Section 7.2(b)(i) or Section 7.2(c)(i) for any Losses suffered by the Purchaser Indemnified Parties as a result of inaccuracies in or breaches of the Fundamental Representations of the Sellers, in an amount exceeding such Seller’s allocable portion of Purchase Price, determined by such Seller’s Equity Interest Percentage and (iii) with respect to any claim under for indemnification made pursuant to Section 7.2(b)(v) through (viii), in an amount exceeding such Seller’s allocable portion of Purchase Price, determined by such Seller’s Equity Interest Percentage. For the related Seller Insurance Policyavoidance of doubt, the Indemnification Cap shall not apply to the matters referred to in Section 7.2(b)(ii) through (viii) or Section 7.2(c)(ii).
(c) Notwithstanding anything to the provisions of contrary in this ARTICLE X, Article VII or elsewhere in this Agreement in no event shall the Purchaser be required to provide indemnification with respect to any claim for indemnification made pursuant to Section 7.2(c)(i): (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(bif the Losses associated with such claim (or group of related claims arising out of the same or similar circumstances) are less than the De Minimis Claim Amount; or (ii) unless and until the aggregate dollar amount of all Losses incurred by such of the Seller Indemnified Party Parties for all such claims that are would otherwise be indemnifiable pursuant to Section 7.2(c)(i) (but without giving effect to any Loss or Losses below the subject of such claim De Minimis Claim Amount) exceeds the De Minimus Amount and Indemnification Deductible; provided, however, that if the aggregate amount of all such Losses exceeds the Indemnification Deductible, the Seller Indemnified Party Parties shall only be entitled to indemnification to for the extent the aggregate full amount of all such Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds and not just the amount in excess of the Indemnification Deductible; and provided further, however, that notwithstanding the foregoing, the De Minimis Claim Amount and then only the Indemnification Deductible shall not apply to the extent Fundamental Representations and, accordingly, any claims by a Seller Indemnified Party in respect of such excess and a Fundamental Representation of the Purchaser shall be indemnified hereunder from the first dollar of any applicable Losses.
(iid) Notwithstanding anything to the contrary in this Article VII or elsewhere in this Agreement in no event shall the aggregate amount Purchaser be required to be paid as provide indemnification with respect to any claim for indemnification made pursuant to Section 10.2(b7.2(c)(i) exceed in an amount exceeding the Indemnification Cap; provided that the De Minimus Amountprovided, however, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of suffered by the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of inaccuracies in or breaches of the entry into force ofFundamental Representations of the Purchaser, or any change inwhich shall be excluded in calculating when such Indemnification Cap is reached and instead shall be subject to a separate indemnification cap equal to the Purchase Price. For the avoidance of doubt, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase Indemnification Cap shall not apply to the matters referred to in the Tax rates or any new Tax or any withdrawal of ReliefSection 7.2(d)(ii), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Share Purchase Agreement (GTT Communications, Inc.)
Limitations on Indemnification. (a) Notwithstanding Except as provided in Section 9.5(f) and Section 9.5(g), the provisions of this ARTICLE X, (i) no Acquiror Selling Parties indemnification obligations to the Buyer Indemnified Party shall be entitled to indemnification pursuant to Parties under Section 10.2(a)(i) 9.1 will not commence unless and until the amount of Losses incurred by such Acquiror the Buyer Indemnified Party that are as a result thereof equals or exceeds in the subject of a claim (or any series of related claims) exceeds aggregate $50,000 31,040.00.00 (the “De Minimus Basket Amount”) and such Acquiror at which time the Selling Parties shall be obligated to indemnify the Buyer Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of Parties for all Losses incurred by all Acquiror the Buyer Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (from the “Indemnification Deductible”), and then only to the extent first dollar of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceLosses.
(b) Notwithstanding the provisions of Except as provided in Section 10.4(a9.5(f) and Section 9.5(g), (i) the De Minimus Amount and Buyer’s indemnification obligations to the Indemnification Deductible shall Seller Indemnified Parties under Section 9.2 will not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) commence unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Seller Indemnified Parties that are indemnifiable pursuant as a result thereof equals or exceeds in the aggregate the Basket Amount, at which time the Buyer shall be obligated to Section 10.2(a)(vi) exceeds $500,000, and then only to indemnify the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of Parties for all Losses incurred by all Seller Indemnified Parties from the first dollar of such Losses.
(c) Except as provided in Section 9.5(d), Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which such Seller Indemnified any of the Selling Parties are entitled to indemnification shall be liable for breaches of representations and warranties pursuant to Section 10.2(b9.1(a) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed $4,574,700.00 (the Purchase Price“General Cap Amount”).
(d) For purposes Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of determining whether a breach of Losses for which any of the representations or warranties Selling Parties shall be liable for breaches of Seller or Company has occurred andFundamental Representations, if so, for purposes of calculating the amount of Losses relating Special Representations and pursuant to any breach clause of any of Section 9.1 other than Section 9.1(a) shall not exceed $12,707,500.00 (the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events“Special Cap Amount”), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will Except as provided in Section 9.5(f) and Section 9.5(g), the aggregate amount of Losses for which the Buyer shall be entitled liable pursuant to indemnification Section 9.2 shall not exceed an amount equal to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)General Cap Amount.
(f) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, no Acquiror Indemnified Party Section 9.5(a), Section 9.5(b), Section 9.5(c), Section 9.5(d) and Section 9.5(e) shall not apply to Losses in connection with, incident to, resulting from or arising out of, directly or indirectly, Taxes, any intentional misrepresentation, fraud or criminal activity and such Losses shall not be entitled to indemnification under this ARTICLE X for (i) any Losses subject to the extent such Losses are reflected in Basket Amount and shall not be counted for purposes of determining whether the Closing Date Working Capital Statement General Cap Amount or (ii) punitive, consequential, indirect, incidental Special Cap Amount has been met or special damages, except to the extent any such damages are received by a third party from an Indemnified Partyexceeded.
(g) In determining Notwithstanding anything to the amount of any contrary contained herein, Section 9.5(a) shall not apply to Losses for which the Indemnified Parties are entitled to assert a claim for indemnificationin connection with, the amount of any incident to, resulting from or arising out of, directly or indirectly, Floorplan Loan Liabilities, Compliance Liabilities, Employee Liabilities and such Losses will shall not be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal subject to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyBasket Amount.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (KAR Auction Services, Inc.)
Limitations on Indemnification. (i) Any amounts which any party hereto may be obligated to pay another party hereto pursuant to Section 10(d) will be reduced by an amount equal to: (a) Notwithstanding the provisions tax benefit, if any, realized as a result of this ARTICLE Xsuch losses (for purposes of determining the "tax benefit", if any, the reasonable joint determination by Purchaser's and Seller's outside accountants will be binding and conclusive as to all parties hereto); and (ib) no Acquiror Indemnified Party any insurance recovery with respect to such losses received by the indemnified party.
(ii) Neither Purchaser nor Seller and Shareholders shall be entitled to assert any Claims for indemnification pursuant to this Section 10.2(a)(i) 10 unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred Claims for indemnification asserted by such party exceeds Fifty Thousand Dollars ($50,000.00) in the aggregate, and upon such event and at such time the applicable indemnifying party or parties shall be responsible for and obligated to pay one hundred percent (100%) of all Acquiror Indemnified Parties for Claims in excess of Twenty-five Thousand Dollars ($25,000.00) in the aggregate.
(iii) Purchaser shall not assert Claims against Seller or the Shareholders which such Acquiror Indemnified Parties are entitled to indemnification aggregate more than the Purchase Price, as specified and adjusted pursuant to Section 10.2(a)(i3(a) exceeds $3,550,000 hereof.
(the “Indemnification Deductible”), and then only to the extent of such excess, (iiiv) in no event shall the aggregate amount to be paid as indemnification Except for Claims pursuant to Section 10.2(a)(i10(a)(ii) hereof for breach of Seller and Shareholder's Warranties and Representations under Section 8(c) which shall not be limited as to time, the right of indemnification afforded to Purchaser, Seller and the Shareholders pursuant to this Section 10 shall be available for the following periods of time:
(A) With respect to any Claim asserted under Section 10(a)(ii), (ivexcept for Section 8(c) Representations and Warranties aforesaid), and/or under Section 10(b)(ii), a period of eighteen (v18) months from and (vii) exceed $35,500,000 (after the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Asset Purchase PriceClosing date.
(bB) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with With respect to any claim pursuant to and all other Claims asserted under Section 10.2(a)(iv10(a) that is covered by or Section 10(b), for a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed period of three (3) years from and after the amount of the deductible applicable to such claim under the related Seller Insurance PolicyPurchase Asset Closing date.
(cC) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement anything herein to the contrary, no Acquiror Indemnified Party any specific Claim or action of which specific written notice is given to the party which has the indemnification obligation prior to the date on which such right of indemnification otherwise terminates as provided in this Section 10(e)(iv) may continue to be asserted and shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party indemnified against pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySection 10.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Valley National Gases Inc)
Limitations on Indemnification. (a) Notwithstanding Any Indemnifiable Claim shall be limited to the provisions amount of this ARTICLE Xactual damages sustained by the Indemnified Party by reason of a breach or nonperformance by the Indemnifying Party, less (i) no Acquiror any Tax benefits by the Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until based on the amount present value thereof, discounted at the Agreed Rate as of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent time of such excessclaim, by reason of such Losses and (ii) in no event the dollar amount of any insurance proceeds paid to the Indemnified Party with respect to such Losses; provided, that payment of such Indemnifiable Claim shall not be withheld pending resolution or final payment with respect to any such insurance proceeds; and provided further, that any insurance proceeds paid to the aggregate amount Indemnified Party with respect to be paid as indemnification Losses for which the Indemnified Party has previously received payment pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (this Article XII shall be promptly delivered to the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceIndemnifying Party.
(b) Notwithstanding Except in the provisions case of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (TaxesSections 4.1, 4.2(a); (ii, 4.4(a) the Cap and 4.4(c)(i), Koppers shall not apply with respect be required to indemnify Buyer under Section 12.1 unless the amount of the claim for Losses relating exceeds $100,000 per individual claim or series of related claims arising from the same set of facts or circumstances (the “Per Claim Amount”) and unless the aggregate amount of all claims for which indemnity would otherwise be payable by Koppers to indemnification pursuant to Buyer under Section 7.4(a12.1 exceeds $1,000,000 (the “Deductible Amount”), Section 10.2(a)(ii)and, (iii)in such event, (vi), (viii) or (ix) or to Koppers shall be responsible only for the amount in excess of the Deductible Amount. Except in the case of breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iiiSections 4.2(b) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b4.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim CI shall not exceed be required to indemnify Buyer under Section 12.2 unless the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of for Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Per Claim Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent unless the aggregate amount of all Losses incurred by all Seller Indemnified Parties claims for which such Seller Indemnified Parties are entitled indemnity would otherwise be payable by CI to indemnification pursuant to Buyer under Section 10.2(b) 12.2 exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Deductible Amount, and, in such event, CI shall be responsible only for the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches amount in excess of the Acquiror Fundamental RepresentationsDeductible Amount. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party but subject only to Section 12.5(c) below, Koppers’ indemnity obligations under Section 12.1 shall be entitled limited, in the aggregate, to ten percent (10%) of the Koppers Purchase Price.
(c) With respect to any breaches or inaccuracies of the representations and warranties in Sections 4.1, 4.2(a), 4.4(a), 4.4(c)(i) and 4.7(a), the maximum aggregate liability of Koppers will equal the amount of the Koppers Purchase Price and with respect to any indemnity obligation of Koppers pursuant to Section 12.1(d), the Per Claim Amount, Deductible Amount and aggregate liability limitation set forth in Section 12.5(b) shall not apply. With respect to any breaches or inaccuracies of the representations and warranties in Sections 4.2(b), 4.4(b), 4.4(d) and 4.7(b), the maximum aggregate liability of CI will equal the amount of the CI Purchase Price.
(d) Buyer shall not be required to indemnify Sellers under Section 12.3 unless with respect to any such claim the amount thereof shall exceed the Per Claim Amount and the aggregate of all amounts for which indemnity would otherwise be payable by Buyer in respect of all such claims by Sellers exceeds the Deductible Amount, and in such event, Buyer shall be responsible only for the amount in excess of the Deductible Amount.
(e) For the avoidance of doubt, the parties acknowledge and agree that the matters described Sections 4.9(d) and 4.11(b) of the Disclosure Schedule shall not give rise to or otherwise form a basis upon which Buyer may seek indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Except with respect to Breaches of Fundamental Representations or resulting from fraud, willful Breach or intentional misrepresentation, the provisions maximum aggregate liability of Seller to the Purchaser Indemnified Persons under Section 9.2(a), and the maximum aggregate liability of Purchaser to the Seller Indemnified Persons under Section 9.3(a), shall be equal to $15,000,000. Further, except in the case of fraud, willful Breach or intentional misrepresentation, from and after the Closing, the maximum aggregate liability of Seller to the Purchaser Indemnified Persons under this ARTICLE X, Agreement shall be limited to an amount equal to $90,000,000 plus the sum of (i) no Acquiror all Earnout Payments earned pursuant to Section 1.2 (whether or not paid due to setoff) and (ii) the sum of any Losses related to Third Party Claims (including, for the avoidance of doubt, any fine or penalty imposed by any Governmental Authority) for which the Purchaser Indemnified Party Persons are entitled to indemnification hereunder.
(b) Neither the Seller nor the Purchaser shall be entitled liable under Section 9.2(a) or 9.3(a), as the case may be, for indemnification of the Purchaser Indemnified Persons or the Seller Indemnified Persons, as the case may be, with respect to any Losses until the aggregate amount of all such Losses subject to indemnification under Section 9.2(a) or 9.3(a), as the case may be, exceeds $250,000 (the “Threshold”), in which event Seller or Purchaser, as the party responsible for indemnification, shall be required to pay or be liable for all such Losses from the first dollar, except that the party responsible for indemnification shall not be liable for any Losses above the Threshold that do not involve an individual claim or series of related claims that exceeds $5,000.
(c) With respect to any Pre-Closing Taxes of the Company under Section 9.2(c) and any Breach by Seller of any of its representations or warranties regarding the Company contained in Article IV hereof, any Losses suffered or incurred by any Purchaser Indemnified Person and for which indemnification shall be available hereunder shall reflect the fact that Purchaser is only acquiring a 50% interest in the Company pursuant to this Agreement and specifically shall not include Losses suffered or incurred as a result of any other interest in the Company that Purchaser may have or acquire. For example, if the Company sustains or suffers a $100 Loss that is subject to indemnification pursuant to Section 10.2(a)(i) unless 9.2, Purchaser’s Loss and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party Seller’s responsibility to indemnify Purchaser hereunder, shall only be entitled limited to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent 50% of such excessLoss, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed or $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price50.
(d) For purposes of determining whether a breach The Purchaser Indemnified Persons shall not be entitled to be indemnified for any Losses for Breach of any of the Seller’s representations or warranties regarding the Company contained in Article IV hereof (other than with respect to Breach of any representation or warranty contained in Section 4.11(m)) to the extent that the Breach of representation or warranty was directly caused by any action of Purchaser or Parent or their respective Affiliates and was not approved in advance by Seller or its representatives on the Management Committee of Dynamic (it being understood that, prior to the Syntroleum Closing, neither Syntroleum nor the Company has occurred and, if so, shall be deemed an Affiliate of Purchaser or Parent for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events9.4(d), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties).
(e) No Indemnified Party will Seller shall not be entitled to indemnification to the extent of liable for any Losses that a court of competent jurisdiction has determined suffered or sustained by final judgment any Purchaser Indemnified Person (other than Losses related to have resulted from the bad faith, gross negligence or willful misconduct Pre-Closing Taxes) caused by any actions taken by Syntroleum on behalf of the party seeking indemnification (provided that Company between the bad faith, gross negligence or willful misconduct date of Seller, Company or any of its Subsidiaries prior to this Agreement and the Syntroleum Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)unless Seller approved the specific action in writing.
(f) Notwithstanding In no event shall any other provision party be liable for punitive damages, damages to reputation or loss of good will whether based in contract, tort, strict liability or otherwise; provided, however, that this Agreement Section 9.4(f) shall not limit a party’s right to recover any such damages to the contrary, no Acquiror Indemnified Party shall be extent such party is required to pay damages to a non-Affiliated third party in connection with a matter for which such party is otherwise entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartyArticle IX.
(g) The Purchaser Indemnified Persons, on the one hand, and the Seller Indemnified Persons, on the other hand, shall be entitled to recover for a Loss only once under this Article IX 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.
(h) In determining the amount of any Losses for which the any Purchaser Indemnified Parties Persons or Seller Indemnified Persons are entitled to assert a claim for indemnificationindemnification hereunder, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer (after giving effect to any applicable deductible or retention and resulting retrospective or other premium adjustment) actually received by such Indemnified Parties Persons in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartyPersons.
(hi) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount Except with respect to Breaches of Fundamental Representations or resulting from fraud, willful Breach or intentional misrepresentation, the remedies contemplated in Section 6.6 and this Article IX shall constitute the sole and exclusive remedy and recourse, from and after the Closing, of Purchaser, Parent and any Purchaser Indemnified Persons against Seller, and of Seller and any Seller Indemnified Persons against Parent or Purchaser, in connection with Losses arising or resulting from the matters set forth in Section 9.2(a) and 9.3(a). Nothing in this Section 9.4(i) shall limit any Purchaser Indemnified Person’s right to seek and obtain any equitable relief to which any such matter Purchaser Indemnified Person is entitled pursuant to that or other provisions of this Agreement.
(ij) Notwithstanding Solely for purposes of determining the amount of any other provision of this Agreement to the contrary, no Acquiror Losses for which any Purchaser Indemnified Party shall be Persons or Seller Indemnified Persons are entitled to indemnification under this ARTICLE X in respect hereunder (and not for purposes of any Losses which occur or are increased as determining whether a result Breach has occurred), the representations, warranties, covenants, and agreements of the entry into force of, parties set forth in this Agreement will be considered without regard to any “materiality” or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase “Material Adverse Effect” qualification set forth in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectthis Agreement.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Renewable Energy Group, Inc.)
Limitations on Indemnification. (a) Notwithstanding the provisions of 11.3.1 Except for fraud or willful misrepresentation, no Company Stockholder shall have any liability to an Acquirer Indemnified Person under this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only Agreement except to the extent of such excessCompany Stockholder’s Escrow Shares, Escrow Cash and any other assets deposited in escrow pursuant to the terms of Section 2.5 and Article 11. Except for fraud or willful representation, the Escrow Fund shall be the sole remedy and source of compensation for Damages for any Acquirer Indemnified Persons.
11.3.2 The indemnification provided for in Section 11.2 shall not apply unless and until the aggregate Damages for which one or more Acquirer Indemnified Persons seeks or has sought indemnification hereunder exceeds a cumulative aggregate of $250,000 (the “Basket”), in which event the Company Stockholders shall, subject to the other limitations herein, be liable to indemnify the Acquirer Indemnified Persons for all Damages; provided, however, that the Basket shall not apply to (i) any indemnification claim for breach of a covenant or agreement of the Company in this Agreement, (ii) in no event shall any indemnification claim for fraud or willful misrepresentation on the aggregate amount to be paid as indemnification pursuant to part of the Company or a Company Stockholder, (iii) any claim based upon a breach of Section 10.2(a)(i3.4 (Capitalization), (iv) any claim based upon a breach of Section 3.7 (Taxes), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions any claim based upon a breach of Section 10.4(a), 3.8 (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iiiFinancial Statements), (vi), (viii) or (ix) or any claim for indemnification related to breaches the matter described in the first paragraph of Section 3.6 of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) Disclosure Letter, or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a any claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim amount paid by the Company pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy5.3.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding anything contained in this Agreement to the provisions of this ARTICLE Xcontrary, (i) no Acquiror Circuit City, FNANB and Tyler Funding shall not be liable in the aggregate for any amounts for which Purchaser Indemnified Party shall be Parties are otherwise entitled to indemnification pursuant to Section 10.2(a)(i10.02(iii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of (x) a claim is timely asserted during the survival period specified in Section 10.01(a), and (or any series of related claimsy) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties Damages for which such Acquiror Purchaser Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i10.02(iii) exceeds exceeds, on a cumulative basis, $3,550,000 5 million (the “Indemnification "Deductible”"), and then only to the extent of such excess, and (ii) in no event Circuit City, FNANB and Tyler Funding shall the aggregate amount not be required to be paid as make indemnification payments pursuant to Section 10.2(a)(i), (iv), (v10.02(iii) and (vii) to the extent indemnification payments thereunder would exceed in the aggregate $35,500,000 125 million (the “"Cap”"). Seller’s aggregate liability under The limitations contained in this ARTICLE X Section 10.05(a) shall not exceed apply in respect of the Purchase Pricefirst sentence of Section 5.14.
(b) Notwithstanding anything contained in this Agreement to the provisions of Section 10.4(a)contrary, (i) the De Minimus Amount and the Indemnification Deductible Purchaser shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror be liable for any amounts for which Seller Indemnified Party shall be Parties are otherwise entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii10.03(ii) unless (x) a claim is timely asserted during the survival period specified in Section 10.01(a) and until (y) the aggregate amount of Losses incurred by such Acquiror all Damages for which Seller Indemnified Party that Parties are entitled to indemnification pursuant to Section 10.03(ii) exceeds, on a cumulative basis, the subject of a claim (or any series of related claims) exceeds $250,000Deductible, and then only to the extent of such excess; , and (ivii) no Acquiror Indemnified Party Purchaser shall not be entitled required to make indemnification payments pursuant to Section 10.2(a)(v10.03(ii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected indemnification payments thereunder would exceed in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance PolicyCap.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply Other than with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of Section 7.04, in determining the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations foregoing Deductible and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In otherwise determining the amount of any Losses for to which the Indemnified Parties are entitled to assert a claim for indemnificationindemnification pursuant this Article X, no claim for indirect, incidental, exemplary, special, consequential or punitive damages, lost profits or opportunity costs shall be taken into account.
(d) Indemnity Payments shall be paid in immediately available funds within ten (10) Business Days after the amount later of any such Losses will be determined after deducting therefrom (i) the value receipt of any Tax benefit or Relief actually realized by any a written request from the party entitled to such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, Indemnity Payment and (ii) the date of payment of the amount that is the subject of any insurance proceeds from a third-the Indemnity Payment by the party insurer actually received entitled to receive the Indemnity Payment, except to the extent contested by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Lossesthe Indemnifying Party. All Indemnified Parties such Indemnity Payments shall use commercially reasonable efforts be made to mitigate all Losses for which such Indemnified Parties are entitled or may be the designated account of, and in the manner specified in writing by, the party entitled to such Indemnity Payments.
(e) For purposes of indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relateArticle X, a portion breach or inaccuracy of such indemnification payment equal to the amounts so recovered a representation, warranty, covenant or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party agreement contained in this Agreement, shall be entitled deemed to recover occur or exist if such representation, warranty, covenant or agreement would have been so breached or inaccurate if it had not contained any amount relating limitation or qualification as to any matter arising under one provision materiality or the Party's Knowledge; provided, however, that Section 5.19 shall for purposes of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE Article X in respect of any Losses which occur or are increased be qualified by materiality as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectset forth therein.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Circuit City Stores Inc)
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) Anything in this Agreement to the contrary notwithstanding, no Acquiror indemnification payment shall be made to the Purchaser Indemnified Party shall Parties until the amounts which the Purchaser Indemnified Parties would otherwise be entitled to receive as indemnification pursuant under this Agreement aggregate at least $100,000, at which time the Purchaser Indemnified Parties shall be indemnified dollar for dollar to the extent any liability with respect to such matters exists. The indemnification provisions set forth in Section 10.2(a)(i5.3(a)(i) unless (with respect to a breach of Sections 4.14, 4.26 and 4.30), 5.3(a)(ii) (with respect to a breach of Sections 7.1, 7.2 and 7.4), 5.3(a)(iii), 5.3(a)(iv), and 5.3(a)(v), or a claim based upon "fraud" (as hereinafter defined) shall not be subject to the limitations set forth in this Section 5.3(d)(i) and shall be indemnified to the Purchaser Indemnified Parties dollar for dollar to the extent any liability with respect to such matters exists. Anything in this Agreement to the contrary notwithstanding, no indemnification payment shall be made to the Seller Indemnified Parties until the amount of Losses incurred by such Acquiror amounts which the Seller Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only Parties would otherwise be entitled to receive as indemnification pursuant to Section 10.2(a)(i) under this Agreement aggregate at least $100,000, at which time the Seller Indemnified Parties shall be indemnified dollar for dollar to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate any liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of such matters exists. Notwithstanding the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) foregoing, the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Seller Indemnified Party Parties shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve indemnified dollar for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) dollar with respect to any claim pursuant to liability arising out of ▇▇▇▇▇▇'▇ breach of Sections 2.4(d) and 3.6 hereof, and also Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification 3.7 hereof solely to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a ▇▇▇▇▇▇'▇ breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall causes ▇▇▇▇▇▇ to not be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection compliance with the incurrence requirements of Rule 144(c) promulgated under the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySecurities Act.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE XVIII, except to the extent such Losses arise out of a breach of a Company Fundamental Representation, no Seller shall have any indemnification obligations for Losses under Section 8.2(a)(i): (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the aggregate amount of all such Losses actually incurred by such Acquiror the Purchaser Indemnified Party that are the subject of a claim (or any series of related claimsParties under Section 8.2(a)(i) exceeds an amount equal to Two Million Two Hundred Fifty Thousand Dollars ($50,000 2,250,000) (the “De Minimus Basket Amount”), from and after which time the Sellers shall be liable only for the amount that exceeds the Basket Amount; (ii) unless and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent until the aggregate amount of all such Losses actually incurred by all Acquiror the Purchaser Indemnified Parties under Section 8.2(a)(i) for which such Acquiror Indemnified Parties are entitled any claim relating to indemnification pursuant to Section 10.2(a)(iany single matter or series or group of related matters exceeds Seventy-Five Thousand Dollars ($75,000.00) exceeds (a “Qualifying Claim”) and only Qualifying Claims, and only the amount of any Qualifying Claim in excess of Seventy-Five Thousand Dollars ($3,550,000 (the “Indemnification Deductible”75,000.00), and then only shall be applied toward the satisfaction of the Basket Amount; and(iii) except to the extent such Losses arise out of such excessa breach of a Company Fundamental Representation, (ii) in no event shall the aggregate amount indemnification to be paid as indemnification pursuant to by the Sellers under Section 10.2(a)(i), (iv), (v) and (vii8.2(a)(i) exceed $35,500,000 the amount then available in the Indemnity Escrow Account. Notwithstanding anything to the contrary contained herein: (A) except to the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed extend such Losses arise out of a breach of a Company Fundamental Representation, the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply Purchaser Indemnified Parties’ sole recourse with respect to indemnifiable claims for Losses relating under Section 8.2(a)(i) shall be to breaches of the representations and warranties set forth amount then available in Company Fundamental Representations or Section 3.15 (Taxes)the Indemnity Escrow Account; (iiB) no Purchaser Indemnified Party may make a claim against the Cap shall not apply with respect to Indemnity Escrow Account for any Losses relating other than Losses that are subject to indemnification pursuant to Section 7.4(a6.4, Section 8.2(a)(i), Section 10.2(a)(ii8.2(a)(ii) and/or Section 8.2(a)(v), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (viC) the Purchaser Indemnified Parties’ sole recourse with respect to indemnifiable claims under Section 8.2(a)(vi) and/or with respect to any claim pursuant Special Indemnity Matter shall be a right to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed recover Special Losses from the amount of then available in the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) Special Escrow Account and no Seller Purchaser Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until may make a claim against the amount of Special Escrow Account for any Losses incurred by such Seller Indemnified Party that are other than Special Losses. Furthermore, the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Purchaser Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, acknowledge and then only to the extent of such excess and (ii) agree that in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefromJoining Common Holder) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In Agreement exceed the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt aggregate Consideration Received by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying PartySeller.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Except as specifically set forth herein, the provisions maximum amount of this ARTICLE X, (iindemnifiable Damages that may be recovered from the Seller arising out of or resulting from Section 9.2(a) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the an amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) equal to the extent the aggregate amount Purchase Consideration, net of any and all Losses incurred by all Acquiror Indemnified Parties for Tax payments, whether already paid or which are at such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricetime payable.
(b) Notwithstanding anything to the provisions of Section 10.4(a)contrary contained in this Agreement, (i) no Indemnitee shall be entitled to seek indemnification from the De Minimus Amount and the Indemnification Deductible shall not apply Seller under this Agreement with respect to Losses relating to breaches any Damages arising out of the representations and warranties set forth in Company Fundamental Representations or resulting from Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a9.2(a), Section 10.2(a)(iiuntil the aggregate amount of such Damages exceeds two hundred thousand US dollars ($200,000), and where such damages exceed two hundred thousand US dollars (iii$200,000), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party Indemnitees shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or in full (vii) unless and until with no deduction of the amount of Losses incurred by such Acquiror Indemnified Party that are the two hundred thousand US dollars ($200,000)), subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent provisions of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b9.5(a), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding anything to the provisions contrary contained in this Agreement, the maximum amount of indemnifiable Damages that may be recovered from the Purchaser and Terayon arising out of or resulting from Section 9.2(b) shall be an amount equal to the Purchase Consideration.
(d) Notwithstanding anything to the contrary contained in this ARTICLE XAgreement, the Seller shall not be entitled to seek indemnification from the Purchaser or Terayon under this Agreement with respect to any Damages arising out of or resulting from Section 9.2(b), until the aggregate amount of such Damages exceeds two hundred thousand US dollars (i) no $200,000), and where such damages exceed two hundred thousand US dollars ($200,000), the Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until in full (with no deduction of the amount of Losses incurred by such Seller Indemnified Party that are the two hundred thousand US dollars ($200,000)), subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount provisions of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights9.5(c).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (Terayon Communication Systems)
Limitations on Indemnification. With respect to claims for indemnification pursuant to Sections 6B(i) and 6B(ii) above, the following provisions shall apply:
(a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification If there is an applicable survival period pursuant to Section 10.2(a)(i) unless and until 6A above with respect to such claim, the amount of Losses incurred by party making such Acquiror Indemnified Party that are claim must make a written claim for indemnification against the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for party from which such Acquiror Indemnified Parties are entitled to party is seeking indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”)within such survival period, and then only with respect to any Environmental Claim, the extent party making such claim must make a written claim for indemnification against the party from which such party is seeking indemnification on or before the fourth anniversary of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase PriceClosing.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible The Existing Stockholders shall not apply with respect have any obligation to Losses relating to breaches of the representations indemnify any Purchaser Indemnified Party from and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification against any Adverse Consequences arising pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties contained in Section 5S above or pursuant to clause (vii) of Seller Section 6B(i) above (each, an "Environmental Claim") unless and until (and then, subject to the
(c) The Existing Stockholders shall not have any obligation to indemnify any Purchaser Indemnified Party from and against any Adverse Consequences arising pursuant to clauses (i) or Company has occurred and(vii) of Section 6B(i) above unless and until (and then, if sosubject to the other limitations herein, only to the extent) Purchaser Indemnified Parties have collectively suffered Adverse Consequences by reason of all such breaches in excess of a $1,000,000 aggregate basket (excluding for purposes of calculating such calculation, any Adverse Consequences used in satisfying the Environmental Sub-Basket, it being the intent that as to Environmental Claims, the Existing Stockholders will have the benefit of the Environmental Sub-Basket and the provisions of this paragraph (c) to the extent of any excess).
(d) The Purchaser shall not have any obligation to indemnify any Seller Indemnified Party from and against any Adverse Consequences arising pursuant to clause (i) of Section 6B(ii) unless and until (and then, subject to the other limitations herein, only to the extent) Seller Indemnified Parties have collectively suffered Adverse Consequences by reason of all such breaches in excess of a $1,000,000 aggregate basket (at which point the Purchaser will be obligated to indemnify Seller Indemnified Parties from and against all such Adverse Consequences in excess of such basket).
(e) In no event shall the aggregate amount of Losses relating any liability of the Existing Stockholders with respect to Adverse Consequences arising pursuant to clauses (i), (vi) or (vii) of Section 6B(i) exceed $10,000,000, and in no event shall the aggregate amount of any liability of the Purchaser with respect to Adverse Consequences arising pursuant to clause (i) of Section 6B(ii) exceed $10,000,000.
(f) Neither Existing Stockholder shall be liable under the indemnification provisions of this Section 6 hereof with respect to Adverse Consequences arising pursuant to clause (i) of Section 6B(i) (other than with respect to the breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(eSection 5E) No Indemnified Party will be entitled to indemnification to the extent that Bill ▇. ▇▇▇▇▇▇ ▇▇ Tomm▇ ▇▇▇▇ has knowledge of any Losses that facts or circumstances not disclosed, which if disclosed, would not constitute a court of competent jurisdiction has determined by final judgment to have resulted from breach at the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified PartyClosing.
(g) Any set of common facts and circumstances which constitute the basis for claims that both (i) a representation or warranty has been breached and (ii) a pre-Closing covenant or agreement has been breached, shall be construed as being the basis for such claim that a representation or warranty has been breached
(h) The amount of any indemnification payable under Section 6 shall be (i) net of any insurance recoveries received by the Indemnified Party, (ii) net of any income Tax benefit realized by the Indemnified Party, (iii) increased to take account of any income Tax cost incurred by the Indemnified Party arising from the receipt or accrual of indemnity payments hereunder (grossed up for such increase) and (iv) in the case of a claim for indemnification with respect to a matter for which a reserve was taken into account in the determination of Actual Working Capital, decreased by the amount of such reserve. In determining computing the amount of any Losses for which such Tax cost or Tax benefit, the Indemnified Parties are entitled Party shall be deemed to assert recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt or accrual of any indemnity payment hereunder or the incurrence or payment of any indemnified Adverse Consequences. Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be increased or reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit only after the Indemnified Party has actually realized such cost or benefit. For purposes of this Agreement, an Indemnified Party shall be deemed to have "actually realized" a claim net Tax cost or a net Tax benefit to the extent that, and at such time as, the amount of Taxes payable by such Indemnified Party is increased above or reduced below, as the case may be, the amount of Taxes that such Indemnified Party would be required to pay but for indemnificationthe receipt or accrual of the indemnity payment of the incurrence or payment of such Adverse Consequences, as the case may be. The amount of any increase or reduction hereunder shall be adjusted to reflect any final determination (which shall include the execution of Form 870-AD or successor form) with respect to the Indemnified Party's liability for Taxes and payments between the Existing Stockholders and the Purchaser to reflect such adjustment shall be made if necessary. Any indemnity payment under this Agreement shall be treated as an adjustment to the Repurchase Price for Tax purposes, unless a final determination (which shall include the execution of a form 870-AD or successor form) with respect to the Indemnified Party or any of its Affiliates causes any such payment not to be treated as an adjustment to the Repurchase Price for United States federal income Tax purposes. For purposes of the preceding sentence, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax state income tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with cost shall take into account the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect federal income tax effect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties benefit or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreementcost.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror If a Purchaser Indemnified Party shall be suffers any Adverse Consequences for which such Purchaser Indemnified Party is entitled to indemnification under the provisions of this ARTICLE X Agreement by reason of a violation of a Legal Requirement (a "Violation Based Loss"), then, notwithstanding anything to the contrary contained in this Agreement, to the extent the discovery of such violation by a Governmental Entity or other third party or the incurring of such - 44 - 51 Violation Based Loss resulted from the Purchaser Indemnified Party disclosing such matter to such Governmental Entity or other third party under circumstances where such Purchaser Indemnified Party was not obligated to do so under any Legal Requirement or contractual obligation, neither Existing Stockholder shall be liable to such Purchaser Indemnified Party under the indemnification provisions of this Section 6 hereof to the extent the indemnification claim resulted from such non-required disclosure.
(j) With respect to any Environmental Claim for any Facility, the Existing Stockholders shall not have any obligation to indemnify any Purchaser Indemnified Party from and against any Adverse Consequences to the extent such Adverse Consequences arise solely from the diminution in fair market value of any Losses which occur or are increased such Facility as a result of the entry into force offacts and circumstances underlying such Environmental Claim.
(k) With respect to any Environmental Claim asserted hereunder, or any change in, after the Existing Stockholders' obligation to provide indemnification hereunder shall not exceed the amount of indemnification that would be required with respect to such Environmental Claim if the use of the relevant Facility were to remain the same as the use existing as of the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Recapitalization Agreement (Living Centers of America Inc)
Limitations on Indemnification. (a) Notwithstanding All representations and warranties of the provisions Seller, the Group Companies, the Purchaser, and Purchaser Sub under this Agreement will survive the Closing until, and will expire at, 5:00 p.m. New York time on the eighteen-month anniversary of this ARTICLE Xthe Closing Date, except for (i) no Acquiror the representations and warranties relating to Taxes made in Section 4.4, which shall survive the Closing until the expiration of the applicable statute of limitations (including any extensions, tolling or waivers thereof), plus 60 days, and (ii) the Group Company Fundamental Representations, Seller Fundamental Representations and Purchaser Fundamental Representations, which shall survive the Closing indefinitely. All covenants under this Agreement requiring performance prior to or at the Closing shall expire immediately after the Closing, except for covenants, if any, required to be performed after the Closing, which shall expire on the completion of their performance. The other obligations of the Seller to indemnify the Purchaser Indemnitees set forth in Section 12.1(a) shall survive for the following periods, within which claims for indemnification may be made: (A) the matters set forth in Section 12.1(a)(viii) for a period of 18 months following the Closing (except for material breaches or material inaccuracy in respect of Section 4.4, which shall survive until the expiration of the applicable statute of limitations (including any extensions, tolling or waivers thereof), plus 60 days); and (B) the matters set forth on Schedule 12.1(a)(ix) for the applicable period listed on Schedule 12.1(a)(ix) for each such matter.
(b) Neither the Purchaser Indemnified Party Parties nor the Seller Indemnified Parties (each, an “Indemnified Party”) shall be entitled to seek indemnification pursuant to under Section 10.2(a)(i12.1(a)(i), Section 12.1(a)(ii), Section 12.1(b)(i), or Section 12.1(a)(viii) unless and as applicable, until the aggregate amount of Losses incurred all Damages suffered by such Acquiror all Purchaser Indemnified Party that are Parties or all Seller Indemnified Parties, as the subject of a claim (or any series of related claims) case may be, exceeds in the aggregate an amount equal to $50,000 4,500,000 (the “De Minimus Basket Amount”) ), and then such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent for the aggregate amount of all Losses incurred by all Acquiror Damages that exceeds the Basket Amount.
(c) Neither the Purchaser Indemnified Parties for which such Acquiror nor the Seller Indemnified Parties are shall be deemed to have incurred any Damages under Section 12.1(a)(i), Section 12.1(a)(ii), Section 12.1(a)(viii) or Section 12.1(b)(i) as applicable, unless the claim (or series of related claims, claims having a common or substantially similar cause or claims that arise out of reasonably common circumstances) for Damages exceeds $100,000 (the “De Minimis Amount”).
(d) The aggregate amount of all payments to which the Purchaser Indemnified Parties shall be entitled to receive under Section 12.1(a)(i) or Section 12.1(a)(ii), as applicable, shall in no event exceed the Escrow Amount. The aggregate amount of all payments to which the Purchaser Indemnified Parties shall be entitled to receive under Section 12.1(a)(viii) and Section 12.1(a)(ix) shall in no event exceed $12,500,000. For the avoidance of doubt, the limitations set forth in this Section 12.2(d) shall not preclude or limit the Purchaser Indemnified Parties’ right to recover under any insurance policy, including the R&W Policy.
(e) The aggregate amount of all payments to which the Purchaser Indemnified Parties shall be entitled to receive under Section 12.1(a)(iii) through Section 12.1(a)(vii), or Section 13.1(a), as applicable, shall in no event exceed the Transaction Consideration, which for the avoidance of doubt, shall not preclude or limit the Purchaser Indemnified Parties’ right to recover under any insurance policy, including the R&W Policy.
(f) The aggregate amount of all payments to which the Seller Indemnified Parties shall be entitled to receive under Section 12.1(b) shall in no event exceed the Transaction Consideration.
(g) None of the Indemnified Parties shall be entitled to seek indemnification for Damages under this Article XII or Article XIII to the extent that the amount of Damages had been fully accounted for in any adjustments pursuant to Section 10.2(a)(i3.1, including in any component of Indebtedness, Net Working Capital or Transaction Expenses.
(h) exceeds $3,550,000 The amount of any Damages for which indemnification is provided under this Agreement shall be reduced by any insurance proceeds (other than under the “Indemnification Deductible”)R&W Policy): (i) actually received by the Indemnified Party after giving effect to any applicable deductible or retention; (ii) within three years of the date such Damages were suffered by the Indemnified Party; and (iii) under applicable insurance policies (net of any expenses incurred by such Indemnified Party in procuring such recovery, and then only including any retrospective or prospective increased premiums or costs) reimbursing such Indemnified Party for such Damages. The Purchaser shall use its commercially reasonable efforts to pursue any reasonably available insurance recoveries.
(i) In no event shall Seller be liable (A) for any Damages that are not reasonably foreseeable as of the date hereof, (B) for any punitive or exemplary Damages, except to the extent awarded by a court of such excesscompetent jurisdiction to a third party in connection with a third party claim, or (iiC) in no event shall the aggregate amount to be paid as indemnification case of a claim by a Purchaser Indemnified Party pursuant to Section 10.2(a)(i12.1(a)(iv), (ivSection 12.1(a)(vii), (v) and (vii) exceed $35,500,000 (the “Cap”or Section 12.1(a)(ix). Seller’s aggregate liability under this ARTICLE X shall not exceed , for Damages calculated as a multiple of earnings derivative or similar amount that may have been used by Purchaser to calculate the Purchase Price.
(bj) Notwithstanding Neither the provisions of Section 10.4(a)Seller Indemnified Parties, (i) on the De Minimus Amount and one hand, or the Indemnification Deductible shall not apply with respect to Losses relating to breaches of Purchaser Indemnified Parties, on the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a)other hand, Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or may recover Damages more than once for any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policyunderlying claim.
(ck) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement anything herein to the contrary, no Acquiror Indemnified Party the limitations set forth in this Section 12.2 shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected not apply in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent Seller is found to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims have committed actual fraud with regard to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Partyspecific claim.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions any other provision of this ARTICLE XAgreement, the right of an Indemnified Party to indemnification under Sections 8.2(a), 8.2(b), 8.3(a) and 8.3(b) shall be subject to the following provisions:
(i) no Acquiror Indemnified Party No indemnification by Seller shall be entitled payable pursuant to Section 8.2(a) unless the total of all claims for indemnification pursuant to such Section 10.2(a)(i8.2(a) shall collectively exceed US$100,000 in the aggregate and no indemnification by Buyer shall be payable pursuant to Section 8.3(a) unless and until the total of all claims for indemnification pursuant to such Section 8.3(a) shall exceed US$100,000 in the aggregate, whereupon only the amount of Losses incurred by such Acquiror Indemnified Party that are claims in excess of the subject of a claim (or any series of related claims) exceeds $50,000 (foregoing threshold amount shall be recoverable in accordance with the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, terms hereof;
(ii) in no event No claim for indemnification shall the aggregate amount to be paid as indemnification made pursuant to Section 10.2(a)(iSections 8.2(a), (iv8.2(b), (v8.3(a), or 8.3(b) after the first anniversary of the Closing Date, except claims arising pursuant to Sections 4.1, 4.2, 4.5, 4.11, 5.1 and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price5.2.
(b) Notwithstanding All amounts to which an Indemnified Party may be entitled pursuant to the provisions of Section 10.4(a), Sections 8.2 and 8.3 shall be net of (i) any insurance coverage of the De Minimus Amount and the Indemnification Deductible shall Indemnified Party (whether or not apply actually paid) with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); thereto, (ii) any tax benefits realized or realizable by the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations Indemnified Party and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror net of any setoff, including any indemnification claim the Indemnifying Party has against the Indemnified Party shall be entitled without regard to whether the indemnification pursuant to claim being set off is less than the minimum amount required by Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b8.5(a)(i), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE XSection 8.5 to the effect that certain obligations of an Indemnifying Party’s shall expire at specified times set forth herein, such obligations shall continue (i) no Seller Indemnified as to any matter as to which a claim is submitted in writing to the Indemnifying Party shall be entitled prior to such specified time and identified as a claim for indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess this Agreement and (ii) in no event shall as to any matter that is based upon fraud by the aggregate amount to be paid Indemnifying Party, until such time as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible such claims and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Pricematters are discovered and resolved.
(d) For purposes of determining whether a breach Notwithstanding any provision to the contrary herein, claims based upon the fraud of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating party to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing Agreement shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding be limited by this ARTICLE 8 or any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effect.
Appears in 1 contract
Sources: Asset Purchase Agreement (Ddi Corp)
Limitations on Indemnification. (a) Notwithstanding Neither party shall be liable for consequential, punitive or indirect damages or lost profits under this Agreement.
(b) Except for the provisions of this ARTICLE Xmatters set forth on Schedules 8.1(e) and Schedule 8.2(e), (i) no Acquiror Levy Indemnified Party or USC Indemnified Party shall be entitled to assert any right to indemnification pursuant to under Section 10.2(a)(i) unless and until the amount 8.1 or 8.2 of Losses incurred by such Acquiror Indemnified Party that are the subject of this Agreement for any single claim which is less than $5,000 (a claim (or any series of related claims) exceeds $50,000 (the “De Minimus AmountMinimis Claim”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to until Losses for all De Minimis Claims exceed $100,000, after which the extent the aggregate entire amount of all Losses incurred by all Acquiror with respect to De Minimis Claims (including the first $100,000) shall be counted against the Basket (as defined below) and shall otherwise be subject to indemnification as provided for in this Article 8. For avoidance of doubt, the provisions of this Section 8.5(b) will only be applicable once with respect to the Levy Indemnified Parties for which such Acquiror on the one hand and the USC Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (on the “Indemnification Deductible”)other hand, and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) once De Minimis Claims first exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under 100,000 with respect to a group, this ARTICLE X shall not exceed the Purchase PriceSection 8.5(b) will be of no further effect with respect to such group.
(bc) Notwithstanding the provisions of Subject to Section 10.4(a8.5(b), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations no Levy Indemnified Party or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror USC Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or assert any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled right to indemnification pursuant to under Section 10.2(a)(v) unless and until the amount 8.1 or 8.2 of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) this Agreement until the aggregate amount of Losses incurred or suffered by the Acquiror Levy Indemnified Parties or the USC Indemnified Parties taken as a whole exceed $250,000 (the “Basket”), after which there will be first dollar indemnification for the entire amount of all such Losses; provided, however, that are indemnifiable pursuant to Section 10.2(a)(vi8.5(b) exceeds $500,000and the Basket will not apply to, and then there will be first dollar indemnity for claims under Sections 4.1 and 5.1 (Organization; Power and Authority; Authorization; Due Execution; No Conflicts), Sections 4.2 and 5.2 (Title to and Condition of Contributed Assets) (only as it relates to good and unencumbered title), Sections 4.9 and 5.9 (Taxes), Sections 4.12 and 5.12 (Brokers), and those matters set forth on Schedules 8.1(e) and Schedule 8.2(e). In no event shall (i) the extent USC Members (in the aggregate) be subject to indemnification liability under Section 8.1 in an amount greater than $7,500,000 (the “USC Cap”), or (ii) Levy be subject to indemnification liability under Section 8.2 in an amount greater than $5,000,000 (the “Levy Cap”); provided that, with respect to those environmental matters set forth on Schedules 8.1(e), the USC Members (in the aggregate) may be subject to indemnification liability under Section 8.1 in excess of such excessthe USC Cap in an amount up to $12,500,000, and with respect to those environmental matters set forth on Schedule 8.2(e), Levy may be subject to indemnification liability under Section 8.2 in excess of the Levy Cap in an amount up to $8,333,000; provided further that, (i) the USC Cap and the Levy Cap shall not apply to any indemnification claim in respect of any parties’ pension withdrawal liability, and (viii) the USC Cap shall not apply to any indemnification claim with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation tax refund claims under review as of the date hereof or any Liability arising from or with respect to such claim shall not exceed the amount of the deductible applicable that certain memo from ▇▇▇▇▇ ▇▇▇▇▇ to such claim under the related Seller Insurance Policy▇▇▇▇▇ ▇▇▇▇▇▇, dated June 16, 2003, regarding “Builders’ Redi-mix post close obligations.”
(cd) Notwithstanding the provisions of this ARTICLE X, (i) no Seller No Levy Indemnified Party or USC Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of assert any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled right to indemnification under this ARTICLE X for (iSection 8.1(a) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii8.2(a) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (party had knowledge of the breach of the applicable representation or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, warranty at or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect prior to such matter pursuant to that or other provisions of this AgreementClosing.
(ie) Notwithstanding To the extent that any other provision of this Agreement indemnification claim is made by any Levy Indemnified Party or the Company against the USC Members, the USC Members will use their best efforts to pursue any indemnification claims the USC Members may have against third parties pursuant to the contraryterms of the Prior Acquisition Agreements; provided that, no Acquiror such obligation shall prevent the Levy Indemnified Party Parties from pursuing any indemnification claim against the USC Members. To the extent that the USC Members collect from any third party pursuant to any indemnification rights under the Prior Acquisition Agreements, such amount of the underlying indemnification claim by the Levy Indemnified Parties or the Company shall be entitled not count against the USC Cap. The USC Members agree to indemnification under this ARTICLE X in respect keep the Levy Indemnified Parties apprised of the status of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectindemnification action.
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Limitations on Indemnification. (a) Notwithstanding The representations and warranties made in this Agreement shall terminate upon the provisions twelve (12) month anniversary of this ARTICLE Xthe Closing Date, except for the Fundamental Representations, which shall survive as follows: the representations and warranties in Section 3.10 (Tax Matters), Section 3.11 (Environmental Matters), and Section 3.14 (Employee Benefits) shall survive until sixty (60) days following the expiration of the statute of limitations applicable thereto (giving effect to any waiver, mitigation or extension thereof) and all other Fundamental Representations shall survive in perpetuity.
(b) Subject to Section 8.3(d), PHMD’s maximum aggregate liability to Purchaser Indemnified Persons for indemnification (including costs incurred in the defense of such claim) under (i) no Acquiror Indemnified Party Section 8.1(a)(i) (other than with respect to Fundamental Representations) shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless not exceed $3,600,000; and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) Section 8.1 and Section 9.2, in no event the aggregate, shall not exceed the aggregate amount to be paid as indemnification pursuant Purchase Price. Subject to Section 10.2(a)(i8.3(d), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). SellerPurchaser’s maximum aggregate liability to Seller Indemnified Persons for indemnification (including costs incurred in the defense of such claim) under this ARTICLE X Section 8.1 shall not exceed the Purchase Price.
(bc) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror No Purchaser Indemnified Party Person shall be entitled to indemnification pursuant to Section 10.2(a)(iv8.1(a)(i) or (viiother than with respect to Fundamental Representations which shall not be subject to the limitations of this Section 8.3(c)) unless and until the amount of aggregate Losses incurred by all Purchaser Indemnified Persons in respect of all claims under Section 8.1(a)(i) (other than with respect to Fundamental Representations) collectively exceeds $450,000 whereupon Purchaser Indemnified Persons shall only be entitled to indemnification hereunder (subject to the other provisions of this Article VIII) from PHMD for all such Acquiror Losses incurred by Purchaser Indemnified Party that Persons in excess of such $450,000 threshold.
(d) The amount of any Losses for which indemnification is provided under this Agreement shall be reduced by (i) any amounts realized by the Indemnified Person as a result of any indemnification, contribution or other payment by any third party, (ii) any insurance proceeds actually recovered by any Indemnified Person (which amount shall be reduced by the amount by which insurance premiums for the Indemnified Person are increased as a direct result of the subject of a claim Losses for which such insurance proceeds were received by the Indemnified Person) or any amounts actually recovered by any Indemnified Person pursuant to any indemnification agreement with any Person and (iii) any Tax savings actually realized by the Indemnified Person (or its Affiliate) in the taxable year in which the Loss is incurred. The Indemnified Persons shall use their commercially reasonable efforts to pursue any series claims for insurance, Tax benefits, indemnification, contribution and/or other payments available from third parties with respect to Losses for which it will seek, or has sought, indemnification hereunder.
(e) Notwithstanding anything to the contrary in this Agreement, the limitations, thresholds and qualifications set forth in this Article VIII: (i) shall not apply in the case of related claimsfraud or willful breach, or (ii) exceeds $250,000in any manner preclude an Indemnified Person from seeking any non-monetary equitable remedy, including specific performance or a preliminary or permanent injunction.
(f) No claim for indemnification may be made by a Purchaser Indemnified Person and then only no indemnification shall be required to the extent that the Losses sustained or incurred by such Purchaser Indemnified Person for which indemnification is sought were treated and taken into account as a liability in the Working Capital.
(g) Subject to Section 8.3(f), the indemnification provided in this Article VIII and in Section 9.2 (including all limitations contained herein) shall be the sole and exclusive remedy for all matters relating to this Agreement, the transactions contemplated hereby, and for the breach of any representation, warranty, covenant or agreement contained herein, and Purchaser and PHMD each expressly waive any and all claims which it may have with respect to the foregoing, other than any Indemnification Claims to the extent provided for in this Article VIII and in Section 9.2.
(h) The representations, warranties, covenants and obligations of a Party and the rights and remedies that may be exercised by the Indemnified Persons based on such excess; representations, warranties, covenants and obligations, will survive and not be limited or affected by any investigation conducted by any Indemnified Person with respect to, or any knowledge acquired (ivor capable of being acquired) by such Indemnified Person at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of, or compliance with or performance of, any such representation, warranty, covenant or obligation, and no Acquiror Indemnified Person shall be required to show that it relied on any such representation, warranty, covenant or obligation of a Party shall in order to be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this AgreementArticle VIII.
(i) Notwithstanding any other provision Solely for the purpose of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification calculating Losses arising under this ARTICLE X Article VIII in respect of a breach of any Losses which occur representation or are increased as a result warranty (but, for the avoidance of doubt, not for the entry into force of, or purpose of determining whether any change in, after the Closing Datesuch breach occurred), any Law Material Adverse Effect, materiality, material or any practice of any Governmental Authority (including any increase similar limitation set forth in the Tax rates such representation or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectwarranty shall be disregarded.
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Limitations on Indemnification. (a) Notwithstanding the provisions of this ARTICLE X, (i) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(i) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all Losses incurred by all Acquiror Indemnified Parties for which such Acquiror Indemnified Parties are entitled to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 (the “Indemnification Deductible”), and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Cap”). Seller’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(b) Notwithstanding the provisions of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds an amount equal to the sum of (1) the reserve for the applicable workers compensation claim set forth on Schedule 10.4(b), to the extent such reserve is reflected in Final Net Working Capital plus (2) $250,000, and then only to the extent of such excess; (v) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000, and then only to the extent of such excess; and (vi) with respect to any claim pursuant to Section 10.2(a)(iv) that is covered by a Seller Insurance Policy, Seller’s indemnification obligation with respect to such claim shall not exceed the amount of the deductible applicable to such claim under the related Seller Insurance Policy.
(c) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to recover for Losses under Section 9.2(a), other than with respect to the Certain IIA Representations and the Tax Representations to which this Section 9.4(a) does not apply, (i) that individually are in an amount of $25,000 or less (a “Minor Claim”) and which Minor Claims that are substantially related may be aggregated, or (ii) unless and until Losses (excluding Minor Claims) aggregate to an amount in excess of $325,000 (the “Basket”), in which case, the Indemnifying Party will be liable for the amount of all Losses sought by the Indemnified Party from the first dollar (i.e., including and in excess of the Basket).
(b) With respect to any Losses suffered or incurred by a Purchaser’s Indemnified Party under Section 9.2(a), such Purchaser’s Indemnified Party shall:
(i) first recover such Losses from the Holdback Amount until the Holdback Amount has been depleted or released to Seller pursuant to Section 9.1(b) before pursuing any other remedy hereunder;
(ii) next, following depletion or release of the Holdback Amount, be entitled to recover directly from Seller, subject to the passing of the Applicable Survival Date and the following limitations: the aggregate amount of all Losses for which the Purchaser Indemnified Parties shall be entitled to recover (A) under Section 9.2(a)¸other than with respect to Losses associated with breaches of Intellectual Property Representations, Certain IIA Representations or Tax Representations, shall not exceed $6,500,000; (B) with respect to Losses associated with breaches of the Intellectual Property Representations shall not exceed $13,000,000; and (C) for Losses associated with breaches of the Certain IIA Representations, Tax Representations or under Sections 9.2(b), 9.2(c), 9.2(d), 9.2(e), 9.2(f), or 9.2(g) shall not exceed the aggregate amount of the Purchase Price.
(c) The aggregate indemnification obligations of Seller and of Purchaser, respectively, shall be capped at the amount of the Purchase Price actually received by Seller, except in the case of Fraud (but exclusively to such claim of Fraud and any claims substantially related to Fraud).
(d) Each of the representations, warranties, covenants, agreements or other obligations contained herein that contains any “Material Adverse Effect,” “material,” “in all material respects,” or similar materiality qualifications shall be read as though such qualifications were not contained therein for the purposes of determining the amount of Losses to which such Indemnified Party may be entitled under this Article IX.
(e) Notwithstanding anything to the contrary in this Agreement, any amounts payable pursuant to the indemnification obligations under this Agreement shall be paid without duplication and in no event shall (i) any Indemnifying Party be obligated to indemnify any Indemnified Party with respect to any Losses with respect to any matter to the extent such matter was taken into account in determining the final Purchase Price pursuant to Section 2.3; or (ii) any Indemnified Party be indemnified under different provisions of any this Agreement for the same Losses that so as to result in a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights)duplicative recovery.
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X Amounts in respect of any Losses which occur payable by any Indemnifying Party pursuant to the indemnification obligations under this Agreement shall be reduced by (i) any amounts actually received from third parties by or are increased as a result on behalf of the entry into force of, or Indemnified Party (including applicable insurance proceeds) and (ii) any change in, insurance proceeds (net of direct collection expenses) actually recovered by the Indemnified Party (such amounts and benefits are collectively referred to herein as “Indemnity Reduction Amounts”). If any Indemnified Party receives any Indemnity Reduction Amounts in respect of a claim for which indemnification is provided under this Agreement after the Closing Datefull 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, any Law or any practice then the Indemnified Party shall promptly remit to the Indemnifying Party an amount equal to the excess (if any) of any Governmental Authority (including any increase x) the amount theretofore paid by the Indemnifying Party in respect of such claim, less (y) the Tax rates or any new Tax or any withdrawal amount of Relief), even the indemnity payment that would have been due if such entry into force or change has retroactive effectIndemnity Reduction Amounts in respect thereof had been received before the indemnity payment was made.
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Limitations on Indemnification. 11.6.1. No Indemnifying Party shall be required to indemnify an Indemnified Party hereunder for any Losses related to or arising directly or indirectly out of any breach of or any inaccuracy in any representation or warranty (aother than any breach of or inaccuracy in any representation or warranty made by any Seller in Sections 6.1 (Due Organization and Authority, 6.5 (Authority to Execute and Perform Agreement), 6.14 (Environmental Matters), 6.13 (Employee Benefits), 6.15 (Taxes); 6.18 (Compliance with Laws) Notwithstanding and 6.21 (Illegal Payments), indemnification for which shall be as provided below) made by such Indemnifying Party in or pursuant to this Agreement (including the provisions Schedules and Exhibits hereto) (such Losses being collectively referred to herein as the “Representation and Warranty Losses”) except to the extent that the aggregate amount of such Representation and Warranty Losses for which the Indemnified Party is otherwise entitled to indemnification pursuant to this ARTICLE XArticle 11 exceeds $50,000 (the “Deductible Amount”) (it being understood and agreed that the Deductible Amount is intended as a deductible, (i) and no Acquiror Indemnifying Party shall be liable for any Representation and Warranty Losses less than the Deductible Amount for which the Indemnified Party is otherwise entitled to indemnification), whereupon the Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(ibe paid the excess of (x) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $50,000 (the “De Minimus Amount”) and such Acquiror Indemnified Party shall only be entitled to indemnification pursuant to Section 10.2(a)(i) to the extent the aggregate amount of all such Representation and Warranty Losses incurred over (y) the Deductible Amount, subject to the limitations on maximum amount of recovery set forth in Section 11.6.2. All Losses (including, but not limited to, any Losses related to or arising directly or indirectly out of any breach of or any inaccuracy in any representation or warranty made by any Seller in Sections 6.1 (Due Organization and Authority), 6.5 (Authority to Execute and Perform Agreement), 6.14 (Environmental Matters), Sections 6.13 (Employee Benefits), 6.15 (Taxes), 6.18 (Compliance with Laws), and 6.21 (Illegal Payments)) other than Representation and Warranty Losses (all such Losses being collectively referred to herein as “Purchase-Price Limited-Losses”) shall be indemnified in their entirety by the Indemnifying Parties and shall not be subject to the limitations set forth in this Section 11.6.1.
11.6.2. The aggregate amount payable by all Acquiror Indemnified Indemnifying Parties for which such Acquiror Indemnified Parties are entitled in respect of Representation and Warranty Losses (other than any breach of or inaccuracy in any representation or warranty made by any Seller in Section 6.10 (Intellectual Property) shall not exceed an amount equal to indemnification pursuant to Section 10.2(a)(i) exceeds $3,550,000 750,000 (the “Indemnification Deductible”), Representation and then only to the extent of such excess, (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(a)(i), (iv), (v) and (vii) exceed $35,500,000 (the “Warranty Cap”). Seller’s The aggregate liability amount payable by Sellers in respect of Losses related to or arising directly or indirectly out of any breach of or inaccuracy in any representation or warranty made by any Seller in Section 6.10 (Intellectual Property) and all claims for indemnification under this ARTICLE X Section 11.2(v) shall not exceed an amount equal to $1,500,000.
11.6.3. Any indemnification payment made pursuant to Article 11 of this Agreement shall be treated as an adjustment to the Purchase PricePrice for tax purposes.
(b) Notwithstanding the provisions 11.6.4. The aggregate amount payable by all Indemnifying Parties in respect of Section 10.4(a), (i) the De Minimus Amount and the Indemnification Deductible any Purchase-Price Limited-Loss shall not apply with respect to Losses relating to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (ii) the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(a), Section 10.2(a)(ii), (iii), (vi), (viii) or (ix) or to breaches of the representations and warranties set forth in Company Fundamental Representations or Section 3.15 (Taxes); (iii) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(iv) or (vii) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds $250,000, and then only to the extent of such excess; (iv) no Acquiror Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(a)(v) unless and until the amount of Losses incurred by such Acquiror Indemnified Party that are the subject of a claim (or any series of related claims) exceeds exceed an amount equal to the sum Purchase Price, less amounts previously paid or to be paid by such Indemnifying Party pursuant to this Article 11.
11.6.5. No Indemnifying Party shall be liable for: (i) a claim for breach of the portions of Section 6.10 (1Intellectual Property) the reserve which address title or for the applicable workers compensation indemnification under Section 11.2(v) unless a written claim set forth on Schedule 10.4(b), for indemnification in accordance with this Article 11 is given by Indemnified Party with respect thereto prior to the extent such reserve date which is reflected in Final Net Working Capital plus two (2) $250,000, years following the Closing Date: or (ii) a claim for any other Representation and then only Warranty Losses pursuant to this Article 11 unless a written claim for indemnification in accordance with this Article 11 is given by the Indemnified Party to the extent Indemnifying Party with respect thereto prior to the date which is fifteen (15) months following the Closing Date; except that these time limitations shall not apply to any Losses related to or arising directly or indirectly out of any Purchase-Price Limited-Losses, as to which in each case the applicable statute of limitations shall apply. For purposes of this Section 11.6.5, the portions of Section 6.10 (Intellectual Property) which address title are limited to the representations in Section 6.10.6.1, 6.10.6.3, 6.10.6.7 and 6.10.6.8 hereof.
11.6.6. The amount of Losses for which indemnification is provided under this Agreement will be (i) increased to take account of any Tax cost incurred (grossed up for such increase) by the Indemnified Party arising from the receipt of indemnity payments hereunder (unless such indemnity payment is treated as an adjustment to the purchase price for tax purposes) and (ii) reduced to take account of any Tax benefit realized by the Indemnified Party arising from the incurrence or payment of any such Losses. In computing the amount of any such Tax cost or Tax benefit, the Indemnified Party will be deemed to be subject to the applicable Federal, state, local and/or local country income taxes at the maximum statutory rate then in effect. Any indemnity payment made pursuant to this Agreement will be treated as an adjustment to the purchase price for Tax purposes unless a determination (as defined in Section 1313 of the Code) or a similar event under foreign Tax Law with respect to the Indemnified Party causes any such payment not to constitute an adjustment to the purchase price for United States Federal income tax purposes or foreign Tax purposes, as the case may be.
11.6.7. The amount of Losses recoverable by an Indemnified Party under this Article 11 with respect to an indemnity claim shall be reduced by the amount of any payment received by such Indemnified Party (or an Affiliate thereof), with respect to the Losses to which such indemnity claim relates, from an insurance carrier (after deducting reasonable costs and expenses incurred in connection with recovery of such excess; (v) no Acquiror proceeds and premium increases directly related to such insurance claims). An Indemnified Party shall use reasonable commercial efforts to pursue, and to cause its Affiliates to pursue, all insurance claims to which it may be entitled to indemnification pursuant to Section 10.2(a)(vi) until the aggregate amount of in connection with any Losses incurred by the Acquiror Indemnified Parties that are indemnifiable pursuant to Section 10.2(a)(vi) exceeds $500,000it incurs, and then only to the extent of such excess; and (vi) parties shall cooperate with each other in pursuing insurance claims with respect to any Losses or any indemnification obligations with respect to Losses but in no event will an Indemnified Party be required to commence litigation to recover proceeds under its insurance policies. If an Indemnified Party (or an Affiliate) receives any insurance payment in connection with any claim pursuant for Losses for which it has already received an indemnification payment from the Indemnifying Party, it shall pay to Section 10.2(a)(ivthe Indemnifying Party, within 30 days of receiving such insurance payment, an amount (not to exceed the amount previously paid by the Indemnifying Party under this Article 11 with respect to such claim) that is covered equal to the excess of (A) the amount previously received by a Seller Insurance Policy, Seller’s indemnification obligation the Indemnified Party under this Article 11 with respect to such claim shall not exceed plus the amount of the deductible applicable insurance payments received with respect to such claim under the related Seller Insurance Policy.
claim, over (cB) Notwithstanding the provisions of this ARTICLE X, (i) no Seller Indemnified Party shall be entitled to indemnification pursuant to Section 10.2(b) unless and until the amount of Losses incurred by such Seller Indemnified Party that are the subject of such claim exceeds the De Minimus Amount and such Seller Indemnified Party shall only be entitled to indemnification to the extent the aggregate amount of all Losses incurred by all Seller Indemnified Parties for which such Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.2(b) exceeds the Indemnification Deductible, and then only to the extent of such excess and (ii) in no event shall the aggregate amount to be paid as indemnification pursuant to Section 10.2(b) exceed the Cap; provided that the De Minimus Amount, the Indemnification Deductible and the Cap shall not apply with respect to Losses relating to indemnification pursuant to Section 7.4(i) or to breaches of the Acquiror Fundamental Representations. Acquiror’s aggregate liability under this ARTICLE X shall not exceed the Purchase Price.
(d) For purposes of determining whether a breach of any of the representations or warranties of Seller or Company has occurred and, if so, for purposes of calculating the amount of Losses relating to any breach of any of the representations or warranties, the representations and warranties in this Agreement, except for Section 3.7 (Financial Statements) and Section 3.9 (Absence of Certain Changes or Events), shall be read without giving effect to any qualifications or limitations as to “material,” “materiality,” and “Material Adverse Effect” contained in any such representations and warranties.
(e) No Indemnified Party will be entitled to indemnification to the extent of any Losses that a court of competent jurisdiction has determined by final judgment to have resulted from the bad faith, gross negligence or willful misconduct of the party seeking indemnification (provided that the bad faith, gross negligence or willful misconduct of Seller, Company or any of its Subsidiaries prior to the Closing shall not affect Acquiror Indemnified Parties’ indemnification rights).
(f) Notwithstanding any other provision of this Agreement to the contrary, no Acquiror Indemnified Party shall be entitled to indemnification under this ARTICLE X for (i) any Losses to the extent such Losses are reflected in the Closing Date Working Capital Statement or (ii) punitive, consequential, indirect, incidental or special damages, except to the extent any such damages are received by a third party from an Indemnified Party.
(g) In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification, the amount of any such Losses will be determined after deducting therefrom (i) the value of any Tax benefit or Relief actually realized by any such Indemnified Parties arising out of or in connection with the incurrence of the Losses for which indemnity is sought, (ii) the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates (including any increase in premium resulting therefrom) and (iii) any other amounts actually received from a third party pursuant to indemnification, contribution or otherwise in respect of any Losses. All Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are entitled or may be entitled to indemnification under this ARTICLE X. In the event that any insurance proceeds, Tax benefits, Relief or other amounts from any third party are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, Tax benefits, Relief or other amounts relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.
(h) No Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Acquiror Indemnified Parties in the event of an Acquiror Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) had already recovered such amount with respect to such matter pursuant to that or other provisions of this Agreement.
(i) Notwithstanding any other provision of this Agreement to claim which the contrary, no Acquiror Indemnified Party shall be has become entitled to indemnification receive under this ARTICLE X in respect of any Losses which occur or are increased as a result of the entry into force of, or any change in, after the Closing Date, any Law or any practice of any Governmental Authority (including any increase in the Tax rates or any new Tax or any withdrawal of Relief), even if such entry into force or change has retroactive effectArticle 11.
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