Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof. (b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Purchase Agreement (Dqe Inc)
Limitations on Indemnification. (a) Notwithstanding No Seller or Shareholder will have any other provision of this Agreement to the contrary, the Parties' obligations pursuant to liability under this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, 7 until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined all Adverse Consequences described in Section 4.3(b)7.1 exceeds $500,000 (the “Threshold Amount”), following and then only for the amount by which such Adverse Consequences exceed the indemnifying Party shall indemnifyThreshold Amount, defend and hold harmless the Buyer Indemnitees or the Seller Indemniteesprovided, as the case may behowever, only to the extent that the Buyer Indemnifiable Losses Threshold Amount will not apply to claims for payment of Pre-Closing Taxes, a payment default under Section 1.3 or the Seller Indemnifiable Lossesclaims of breach by Sellers or Shareholders of Sections 2.1, as the case may be2.2, exceed the Indemnity Basket2.4, 2.14(a) and 2.23. In additionSolely for purposes of determining whether a representation, the Seller's and DQE's liabilitywarranty, taken together, for Buyer Indemnifiable Losses covenant or agreement has been breached by Sellers or Shareholders and the Buyer's Adverse Consequences resulting therefrom “credited” against the Threshold, any representation, warranty, covenant or agreement that is otherwise subject to a “materiality” qualifier shall be interpreted, and any breach thereof determined, without regard to such “materiality” qualifier. Upon reaching the Threshold Amount, Sellers and Shareholders will be jointly and severally liable to Buyer for all claims for Adverse Consequences in excess of the Threshold Amount up to twenty-five percent of the Purchase Price (the “Maximum Amount”). The joint and several liability of Shareholders for Adverse Consequences shall not apply to any Shareholder who does not own more than five percent (5%) of the capital stock of either Seller Indemnifiable Losseson the date hereof. All indemnity claims shall be satisfied first from the Escrow Fund, then from the Ernout prior to any payment from any individual Shareholder. Under no circumstances will Sellers or Shareholders be liable to Buyer for any amount in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount excess of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))Maximum Amount; provided, however, that in determining whether the Seller's and DQE's liability Maximum Amount will not apply to claims for payment of Pre-Closing Taxes, a particular Buyer Indemnifiable Loss payment default under Section 1.3 or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited claims of breach by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is Sellers or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice Shareholders of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof2.2.
(b) As used Sellers and Shareholders will not be required to indemnify and hold Buyer harmless with respect to any claim for indemnification if the facts upon which Buyer bases such claim were actually known by or disclosed in writing to Buyer or its Representatives prior to or at the Closing.
(c) To the extent that recovery from another Person (including any insurer) is available to Buyer to compensate for any item for which indemnification may be sought hereunder, Buyer will exhaust all available remedies to recover the amount of its claim as may be available from such other Person and will only seek indemnification against Sellers and Shareholders in the event that it fails to obtain such reimbursement from the other Person or if such reimbursement is insufficient to satisfy the claim (and in the latter instance will only seek indemnity for the amount of the deficiency). To the extent Sellers or Shareholders indemnify Buyer on any claim referred to in the previous sentence, Buyer will assign to Sellers and Shareholders, to the fullest extent allowable, its rights and causes of action with respect to such claim against other Persons, or in the event assignment is not permissible, Sellers and Shareholders will be allowed to pursue such claim in the name of Buyer, as applicable, at Sellers’ or Shareholders’ expense. Sellers and Shareholders will be entitled to retain all recoveries for their own accounts made as a result of any such action. Buyer will provide Sellers and Shareholders reasonable assistance in prosecuting any such claim, including making their books and records relating to such claim available to Sellers and Shareholders and their respective Representatives and making their respective employees available for interviews, testimony and similar assistance. If Buyer or its Affiliates recover from a third party any part of a claim that has previously been paid by Sellers or Shareholders pursuant to this AgreementArticle 7, Buyer will promptly remit to Sellers’ (or Sellers’ Liquidating Trust) the amount of such recovery without regard to the time limitations described in Section 9.1. Sellers and Shareholders will have no liability with respect to any claim that would have been covered by insurance had Buyer maintained the same insurance coverage that were in effect before the Closing with respect to the Sellers or the Subsidiaries.
(d) In computing the amount of any indemnification to which Buyer may be entitled under this Article 7 by virtue of a breach of Sections 2.3 or 2.5, if the amount of any liability has been understated or unrecorded, on one hand, but on the other hand the amount of any other liabilities has been overstated or any assets understated, only the net effect (benefits or detriment as the same are determined in accordance with GAAP) of such errors will be taken into account.
(e) Any amounts recoverable by Buyer from Sellers or Shareholders under this Article 7 will be net of any Tax benefits to Buyer or its Affiliates (including the Sellers and the Subsidiaries). For purposes of this paragraph, “Tax benefit” will mean the present value of any refund, credit or reduction in otherwise required Tax payments, including any interest payable thereon, which present value will be computed as of the later of the Closing Date or the first date on which the right to the refund, credit or other Tax reduction arises or otherwise becomes available to be utilized (regardless of the time that Buyer or its Affiliates actually utilize the benefit), using (i) the term "Indemnity Basket" shall mean $250,000Tax rate applicable to the highest level of income with respect to such Tax under applicable Legal Requirements on such date, and (ii) the term "Indemnity Cap" interest rate on such date imposed on corporate deficiencies paid within thirty (30) days of the notice of proposed deficiency under the Code.
(f) Buyer is not entitled to recover any amounts for a claim for indemnification that are attributable to any delay in delivering notice of the indemnification claim to Sellers. Buyer is not entitled to any indemnity (i) on account of consequential, incidental or indirect damages or losses including business interruption, loss of profits, loss of use of facilities and loss of goodwill, and no “multiple of profits” or other similar damage calculation methodology will be applied in calculating any damage that may be claimed hereunder, except with respect to indemnification for third party claims, to which this clause (i) shall mean $15,000,000; providednot apply or (ii) in respect of any claim to the extent that the matter that is the subject of the claim is reflected on, howeveraccrued for or reserved against or otherwise provided for in the Financial Statements, Interim Financial Statements or the Final Closing Balance Sheet or that was raised and resolved by agreement of the Parties or through the dispute resolution procedures described in Section 1.4 above. Sellers and Shareholders will have no liability for indemnification with respect to any claim for indemnification that relates to the passing of, or any change in, any Legal Requirement or any accounting policy, principle or practice after the Closing Date or any increase in Tax rates in effect on the first (1st) anniversary of the Closing Date, even if the Indemnity Cap shall change or increase has retroactive effect or requires action at a future date.
(g) To the extent that any breach of a representation or warranty made by Sellers or Shareholders is capable of cure, Buyer will, as a condition precedent to asserting a claim concerning the breach, afford Sellers and Shareholders a reasonable opportunity (which will not be reduced toless than 30 days) to cure the breach and will provide, and shall thereafter meanwill cause its Affiliates to provide, $7,500,000; Sellers and provided furtherShareholders all reasonable assistance (including access to buildings, offices, records, files, properties and assets) in connection with such remedy or cure. Buyer agrees that on in the second event of any breach giving rise to an indemnity obligation of Sellers or Shareholders hereunder, Buyer will take all reasonable measures to mitigate the Adverse Consequences arising from the breach (2ndincluding taking all reasonable steps to prevent any contingent liability from becoming an actual liability).
(h) anniversary Sellers and Shareholders will have no liability with respect to any claim for indemnification or part of a claim for indemnification that would not have arisen but for any act or omission after Closing by Buyer or its Affiliates, other than any act or omission done pursuant to this Agreement or required by applicable Legal Requirements.
(i) No claim for indemnification may be made or maintained against any Seller or Shareholder following the sale by Buyer of a majority of the Closing DatePurchased Assets, whether through a sale of stock, a merger or consolidation, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third sale of assets or otherwise.
(3rdj) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement anything contained herein to the contrary, to the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating extent that any facts or circumstances give rise to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, a claim for indemnification under this Article 7 and (ii) Excluded Assetsa purchase price adjustment to the Cash Purchase Price under Section 1.3, (iii) any and all liabilities and obligations of such facts or circumstances shall first be resolved under the Seller or purchase price adjustment mechanism pursuant to Section 1.3. To the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided extent that the foregoing reference Purchase Price has been adjusted pursuant to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); Section 1.3 and Buyer is paid in additionconnection therewith, the Buyer's liability for the following Seller Indemnifiable Losses Buyer shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating entitled to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) a “second” payment under Article 7 for any breach facts or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant circumstances which could have also given rise to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)a claim for indemnification under Article 7.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Any indemnification claims by the Indemnified Party pursuant to Section 11.2 shall be paid with the Holdback Shares. With respect to any such indemnification payment, for purpose of determining the indemnification payment, the Holdback Shares shall be valued at $10.10 per share, regardless of the trading price of the Holdback Shares at the time that the indemnification claim is finally determined in accordance with this Article XI.
(b) Except in the case of Fraud by the Company and the Shareholder, the sole and exclusive recourse for any amount finally determined to be owed in respect of any indemnity obligations pursuant to this Article XI shall be made only by transfer of Holdback Shares to the Indemnified Parties, no other assets shall in any respect be used to satisfy such indemnity obligations, and once the Holdback Shares shall be fully released and transferred, such indemnity obligations shall terminate. For successful indemnification claims by an Indemnified Party, within five (5) Business Days after the indemnification claim is finally determined in accordance with this Article XI, PubCo shall retain a number of Holdback Shares, valued at $10.10 per share, equal to the amount of such indemnification claim (as determined in accordance with this Article XI).
(c) In the event Parent Parties proceed with the Closing notwithstanding actual knowledge by Parent Parties or any Affiliate of Parent Parties at or prior to the Closing (as evidenced in a writing, either from the Company to Parent Parties or from Parent Parties to the Company) of any breach by the Company or the Shareholder of any representation, warranty, covenant or agreement in Article V or in any certificate or Additional Agreement delivered by the Company pursuant hereto, no Indemnified Party shall have any claim or recourse against the Shareholder or the Holdback Shares with respect to such breach, under this Article XI or otherwise.
(d) In no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall Losses be deemed to include, any punitive, special, incidental, exemplary, consequential, indirect or exemplary damages, or for any diminution in value changes measured as a multiple of earnings, revenue or by any other provision similar performance metric, (including loss of this Agreement future revenue or income, loss of business reputation or opportunity), except for any such damages to the extent actually awarded by a court of competent jurisdiction and paid to a third party in a Third Party Claim (as defined below).
(e) Any Losses recoverable hereunder shall be reduced in amount by insurance proceeds, indemnification payments, contribution payments or reimbursements or any Tax benefits or reduction actually received by any Indemnified Party in connection with, or as a result of, such Losses, and the Indemnified Parties shall use reasonable and diligent efforts to realize such benefits, proceeds, payments, reimbursements or reductions.
(f) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the extent reasonably necessary to remedy the breach that gives rise to such Loss.
(g) Notwithstanding anything to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Indemnified Parties shall be deemed not be required to indemnifyhave suffered any Losses (whether in contract, defend tort or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only otherwise) to the extent that the Buyer Indemnifiable such Losses (i) are accrued, provided or the Seller Indemnifiable Lossesreserved for, as the case may be, exceed the Indemnity Basket. In additionor otherwise reflected or taken into account in, the Seller's and DQE's liabilityFinancial Statements, taken togetheror (ii) arise out of changes after the Closing Date in accounting principles or applicable Laws, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss rules or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is regulations or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofinterpretations thereof.
(bh) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses An Indemnified Party shall not be limited by entitled to damages or other payment from the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (Shareholder in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, claims concerning the Company or any Company Subsidiary (provided that the foregoing reference under or in relation to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to this Agreement if (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, any such claim is less than $300,000 or (ii) any breach or violation the aggregate of any Environmental Law by PSCall such claims permitted under (i) is less than $3,000,000, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, after which the Company or any Company Subsidiary on or after Shareholder shall be liable for the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)full amount of its indemnification Liabilities.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding the provisions of Section 9.1 above, (i) in no event shall the liability of any other provision of this Agreement to Seller under Section 9.1 exceed the contraryCap Limitation for the applicable Property, in the Parties' obligations pursuant to this Article IV areaggregate, and at (ii) in no event shall any Seller have any liability under Section 9.1 with respect to any Property until such liability exceeds the Basket Limitation for such 41 Property (in which case Seller shall be responsible for all times shall be, such liability from dollar one (but subject to the limitations set forth in this Section 4.3. The Parties shall Cap Limitation) and not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as just the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, portion that exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofLimitation.
(b) As used If, prior to the Closing of any Property, Buyer obtains knowledge of any inaccuracy or breach of any representation, warranty or pre-closing covenant of Seller contained in this AgreementAgreement (a “Buyer Waived Breach”) and nonetheless proceeds with the and consummates the Closing, then Buyer and any Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under Section 9.1 for, or any other claims or cause of action under this Agreement at law or in equity on account of, any such Buyer Waived Breach.
(c) Notwithstanding the provisions of Section 9.2 above, (i) in no event shall the term "Indemnity Basket" shall mean $250,000liability of Buyer under Section 9.2 exceed the Cap Limitation, in the aggregate, and (ii) in no event shall the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on Buyer have any liability under Section 9.2 until such liability exceeds the first Basket Limitation (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it Buyer shall be reduced toresponsible for all such liability from dollar one (but subject to the Cap Limitation) and not just the portion that exceeds the Basket Limitation.
(d) If, prior to any Closing, Seller obtains knowledge of any inaccuracy or breach of any representation, warranty or pre-closing covenant of Buyer contained in this Agreement (a “Seller Waived Breach”) and nonetheless proceeds with the and consummates the Closing, then Seller and any Seller-Related Entities shall thereafter meanbe deemed to have waived and forever renounced any right to assert a claim for indemnification under Section 9.1 for, zero. Notwithstanding or any other provision claims or cause of action under this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing at law or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisitionequity on account of, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)such Seller Waived Breach.
Appears in 1 contract
Sources: Purchase and Sale Agreement
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations Except as set forth in this Section 4.3. The Parties shall not be required Sections 7.5(b) and 7.5(c), the maximum amount an Indemnified Party may recover from a Company Holder individually pursuant to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined indemnity set forth in Section 4.3(b)), following which the indemnifying Party 7.2 hereof for Losses shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only be limited to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap proceeds paid to such Company Holder out of the Merger Consideration (as defined in Section 4.3(b)); provided, however, that in determining whether including the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or amount deposited into the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect Escrow Fund on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice behalf of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as Company Holder and the case may be, amount of any taxes withheld from any payment made to the Seller as contemplated by Section 4.4 hereofsuch Company Holder).
(b) As used Nothing herein shall limit the liability of the Company for any breach or inaccuracy of any representation, warranty or covenant contained in this Agreement or any Related Agreement if the Merger does not close.
(c) The limitations of Section 7.5(a) shall not apply (i) 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 payable to 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 this Agreement unless and until the aggregate amount otherwise payable to the Indemnified Parties under this Article VII for such breaches and inaccuracies exceeds $50,000 (the “Basket”). At such time as the total amount payable to the Indemnified Parties exceeds the Basket, in the aggregate, the Indemnified Parties shall be entitled to be indemnified against all Losses, including the Losses included in the Basket.
(e) Notwithstanding anything to the contrary provided in this Agreement, (i) the term "Indemnity Basket" all claims for indemnification shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary be paid out of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, Escrow Fund unless the Indemnity Period Escrow Fund has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited exhausted by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)claims.
Appears in 1 contract
Sources: Merger Agreement (Nanometrics Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required liable and the Buyer agrees not to indemnify, defend enforce any claim for indemnification with respect to a misrepresentation or hold harmless any Buyer Indemnitee breach of a representation or Seller Indemnitee, as the case may be, warranty under this Agreement until the aggregate amount of all such claims exceeds $50,000 (the "THRESHOLD AMOUNT"), and then the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as shall be entitled to recover only the case may be, exceeds amount of such claims in excess of the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party Threshold Amount. The Buyer shall indemnify, defend and hold harmless the Buyer Indemnitees or provide the Seller Indemnitees, as with written notice of all claims included in the case may be, only to the extent that the Buyer Indemnifiable Losses or Threshold Amount. The maximum liability of the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's for indemnification for misrepresentation or breach of representations and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this warranties under Article IV shall in no event exceed an aggregate amount of dollars equal to be the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofPurchase Price.
(b) As used in this Agreement, (i) The parties shall use reasonable efforts to collect the term "Indemnity Basket" shall mean $250,000, and (ii) proceeds of any insurance which would have the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary effect of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a)reducing Losses, in which case the Indemnity Cap shall continue to mean $7,500,000 until the third such insurance proceeds (3rd) anniversary net of the Closing Datecosts incurred in obtaining such proceeds) shall reduce such Losses, upon which it and, if indemnification payments shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement have been received by the Indemnified Party prior to the contrarycollection of such proceeds, the Seller's and DQE's liability for Indemnified Party shall remit to the following Buyer Indemnifiable Losses shall not be limited Indemnifying Party the amount of such proceeds (net of the cost of collection thereof) to the extent of indemnification payments received in respect of such Losses. To the extent any Loss of an Indemnified Party is reduced by the Indemnity Cap: Buyer Indemnifiable Losses relating to receipt of payment (i) any litigationunder insurance policies which are not subject to retroactive adjustment or other reimbursement to the insurer in respect of such payment, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assetsfrom third parties not affiliated with the Indemnified Party, such payments (iii) any and all liabilities and obligations net of the Seller or the Subsidiaries expenses of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (ivrecovery thereof) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)credited against such Loss.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of anything in this Agreement to the contrary, the Parties' obligations right to indemnification under this Article VI is limited as follows:
(a) Except in the case of fraud, the Stockholder Indemnitees shall not be entitled to assert any claims for Losses pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, VI until such time that the aggregate amount of all such Losses suffered by the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Stockholder Indemnitees pursuant to this Article VI exceeds $1,000,000 (the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)“Deductible”), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionin such event, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and Stockholder Indemnitees shall be entitled to recover the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to such Losses in excess of the Indemnity Cap (as defined in Section 4.3(b))Deductible; provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or aggregate amount required to be paid by the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, Company pursuant to its indemnification obligations under Section 6.3 or any other liability that might arise out of this Article IV is limited by Agreement shall in no event exceed ten percent (10%) of the Indemnity CapFace Amount and the Company shall have no liability to any Stockholder Indemnitee for, and such Stockholder Indemnitee shall have no right to recover from the Parties shall refer to Company for, any amount of Losses which exceeds (and from and after the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of time such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofLosses exceed) such amount.
(b) As used Except in the case of fraud committed by a Stockholder (in which case, any claim for Losses suffered as a result of such fraud shall be brought only against such Stockholder alleged to have committed such fraud), the aggregate amount required to be paid by the Stockholders pursuant to their respective indemnification obligations under Section 6.2 or any other liability that might arise out of this AgreementAgreement shall in no event exceed ten percent (10%) of the Face Amount and the Stockholders shall not have any liability to any Company Indemnitee for, and such Company Indemnitee shall have no right to recover from the Stockholders for, any amount of Losses which exceeds (and from and after the time such Losses exceed) such amount.
(c) For the purpose of calculating Losses under this Article VI after a breach has occurred (and for the sake of clarity, not for the purpose of determining whether a breach has occurred), (i) any and all materiality or Material Adverse Effect qualifications (or similar qualifications) in the term "Indemnity Basket" representations, warranties, covenants and agreements shall mean $250,000, be disregarded and (ii) any amounts actually received from insurers or third parties with respect to any contractual rights to indemnification, reimbursement, offset or recovery shall reduce the term "Indemnity Cap" amount of Losses for determining the amount of the indemnity obligation under this Article VI.
(d) Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall mean $15,000,000; provided, however, that give rise to any right on the first (1st) anniversary part of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ Stockholder Indemnitee or any Company Subsidiary Indemnitee, after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the Integrated Assets or Integrated Liabilities), transactions contemplated hereby.
(ive) indemnity obligations Any Loss for which any Stockholder Indemnitee is entitled to indemnification under this Section 6.5 shall be determined without duplication of recovery by reason of the Parties in respect state of Taxesfacts giving rise to such Loss constituting a breach of more than one representation, as set forth in Section 4.5warranty, covenant or agreement.
(vf) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) In no event shall any fraud committed by DQE, the Seller, the Company or Stockholder be obligated to indemnify any Company Subsidiary (provided Indemnitee for any Losses pursuant to this Article VI that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to are (i) indemnity obligations attributable to a breach of the Parties in respect of Taxes, as set forth in Section 4.5, this Agreement by any other Stockholder or (ii) in the event that more than one Stockholder is obligated to indemnify the Company for any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC Losses pursuant to Section 1.1this Article VI, in excess of such Stockholder’s pro rata percentage of such Losses based on the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed number of Shares held by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)such indemnifying Stockholders.
Appears in 1 contract
Sources: Backstop Securities Agreement (Rehabcare Group Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision No claim for indemnification with respect to a breach of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, a representation and at all times warranty shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless made by any Buyer Indemnitee or Seller Indemnitee, as the case may be, until after the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only applicable Survival Date unless prior to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that such Survival Date the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered shall have given the Sellers or the Buyer, as the case may [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. be, written notice of such claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the existence of any claim, demand, suit, or cause of action against such Buyer Indemnifiable Loss Indemnitee or Seller Indemnifiable LossIndemnitee, as the case may be. No claim for indemnification pursuant to Section 10.6(b)(iv) shall be made by any Buyer Indemnitee after the [***] anniversary of the Closing Date unless prior to such date the Buyer Indemnitee shall have given the Sellers written notice of such claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the existence of any claim, demand, suit, or cause of action against such Buyer Indemnitee.
(b) The Sellers and the Stockholder shall have no indemnification liability under this Agreement unless and until (and only to the extent that) all claims with respect to such Losses pursuant to this Agreement and for "Buyer's Damages" under the ▇▇▇▇▇▇ Stock Purchase Agreement and the Arngar Stock Purchase Agreement (as defined on Exhibit A-1) exceed a cumulative aggregate ----------- total of [***] (the "Basket"); provided, however, the foregoing Basket ------ -------- ------- limitation shall not apply to (1) claims under Sections 10.6(b)(ii) or 10.6(b)(iv), (2) claims under Section 10.6(b)(iii), in so far as such claims relate to a breach of Section 10.9 below, (3) claims under Section 10.6(b)(viii), or (4) claims based upon fraud. With respect to any claim for indemnity under Section 10.6(b)(i) above, if the matter is also the basis for a claim for indemnity under any other provision of this Section 10.6 for which the Basket limitation is not applicable, the Basket limitation shall not be applicable to such claim.
(c) Except in the case of claims based upon fraud, the aggregate indemnification liability of the Sellers and the Stockholder under this Agreement and the "Seller" under each of the ▇▇▇▇▇▇ Stock Purchase Agreement and the Arngar Stock Purchase Agreement shall be [***], which amount is inclusive of indemnification obligations contemplated by the Environmental Indemnification Cap (as defined below). Notwithstanding the foregoing, the Sellers and the Stockholder shall have no indemnification obligations hereunder with respect to indemnification obligations contemplated by the Environmental Indemnification Cap to the extent such indemnification obligations would require payments by the Sellers in excess of the Environmental Indemnification Cap. As used in this Agreement, the "Environmental Indemnification Cap" shall mean the obligations --------------------------------- under this Agreement and the Other Agreements to remediate environmental contamination, including, without limitation, pursuant to (A) Paragraph 7(e) of the respective Real Property Purchase Agreement, (B) Paragraph 5(e) of the "Owned Real Property Rider" under the Arngar Stock Purchase Agreement, (C) Section 10.9(b) below or (D) Section 9.6 of each of the ▇▇▇▇▇▇ Stock Purchase Agreement and the Arngar Stock Purchase Agreement, and/or to indemnify for Environmental Liabilities or breaches of representations or warranties with respect to environmental matters, in either case with respect to the Owned Real Property and/or the Leased Premises, and the "Owned Real Property" and/or the "Leased Premises" under each of the ▇▇▇▇▇▇ Stock Purchase Agreement and the Arngar Stock Purchase Agreement, in the maximum aggregate amount of [***].
(d) In connection with any claim for indemnification with respect to which the Buyer or the Sellers, as the case may be, have an enforceable claim against any third party (contractual or otherwise) on account of the item for which such claim for indemnification has been made, the Buyer or the Sellers, as the case may be, shall, at the time of payment by the [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. indemnifying party of the claim for indemnification, assign to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000other party such claim; provided, however, that on the first assignee of such claim shall further protect -------- ------- and indemnify the assignor in connection with the pursuit by the assignee of such claim against such third party; provided, further, however, this clause (1std) anniversary -------- ------- ------- shall not require the assignment of any claims under any insurance policy.
(e) No Buyer Indemnitee or Seller Indemnitee, as the Closing Datecase may be, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, entitled to indemnification pursuant to Section 4.2(athis Article 10 to the extent of any insurance (including title insurance) proceeds received by the Buyer or the Sellers, as the case may be, in connection with the facts giving rise to such indemnification (and the Buyer or the Sellers shall seek full recovery under all insurance policies covering any Losses to the extent permitted), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third provided that this clause (3rde) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by applicable to the Indemnity Cap: Buyer Indemnifiable Losses relating extent it would give the insurance company a basis to deny coverage with respect to the particular claim involved.
(if) any litigation, existing or threatened, that is required to The provisions of Sections 10.6 and 10.7 shall be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 effective upon consummation of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7Closing, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); Closing, shall have no force and effect. Following the Closing, except in additionthe case of claims based upon fraud, the Buyer's liability sole and exclusive remedy for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSCrepresentation, Acquisitionwarranty or covenant contained in, any Buyer Subsidiary designated by PSC pursuant to Section 1.1or otherwise relating to, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (this Agreement shall be indemnification provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)for in this Agreement.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary set forth in this Agreement, the Parties' obligations Buyer Indemnified Parties shall not be entitled to indemnification under Section 7.2(a)(i), and the Seller Indemnified Parties shall not be entitled to indemnification under Section 7.2(b)(i), for any Indemnification Claims made after the expiration of the applicable Survival Period. Buyer Indemnified Parties may only make Indemnification Claims under Section 7.2(a)(i), and Seller Indemnified Parties may only make Indemnification Claims under Section 7.2(b)(i), prior to the expiration of the applicable Survival Period. Notwithstanding anything to the contrary set forth in this Agreement, each Party acknowledges and agrees that the applicable Survival Periods supersede all applicable statutes of limitations or other claims periods with respect to the representations, warranties, covenants and agreements of the other Party contained in this Agreement.
(b) Notwithstanding anything to the contrary set forth in this Agreement, the Buyer Indemnified Parties shall not be entitled to indemnification under Section 7.2(a)(i), and the Seller Indemnified Parties shall not be entitled to indemnification under Section 7.2(b)(i), for any Loss arising out of a single set of (or series of related) facts and circumstances in respect of which such Indemnified Parties are otherwise entitled to indemnification pursuant to this Article IV are, and at all times shall be, subject VII if the amount of such individual Loss is less than Fifty Thousand Dollars ($50,000) (the “Single Claim Threshold”).
(c) Notwithstanding anything to the limitations contrary set forth in this Section 4.3. The Parties Agreement, Buyer shall not be required entitled to indemnifyindemnification under Section 7.2(a)(i) unless and until Buyer shall have paid or incurred Losses in respect of which the Buyer Indemnified Parties are otherwise entitled to indemnification pursuant to this Article VII that exceed $1,400,000 (the “Basket”) in the aggregate, defend or hold harmless any whereupon the Buyer Indemnitee or Seller Indemnitee, as Indemnified Parties shall be entitled to indemnification under Section 7.2(a)(i) for otherwise recoverable Losses including the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether notwithstanding the Seller's foregoing, Losses from a single set of (or series of related) facts and DQE's liability for a particular Buyer Indemnifiable Loss circumstances that do not exceed the Single Claim Threshold shall not be applied toward the Basket or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to be recoverable under this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofVII.
(bd) As used Notwithstanding anything to the contrary set forth in this Agreement, (i) in no event shall the term "Indemnity Basket" shall mean $250,000, and (ii) cumulative amount of Losses for which the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap Buyer Indemnified Parties shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant entitled to indemnification under Section 4.2(a7.2(a)(i), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd7.2(a)(ii) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Companyfor a Willful Breach), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).,
Appears in 1 contract
Sources: Asset Purchase Agreement (Alarm.com Holdings, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses Purchaser and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss other Persons or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, entities indemnified pursuant to Section 4.2(a10.1 shall not assert any claim for indemnification hereunder against the Seller or the Shareholders until such time as the aggregate of all claims which such persons may have against the Seller or the Shareholders shall exceed $27,000 (the "Indemnification Threshold"), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it whereupon such claims shall be reduced to, and shall thereafter mean, zeroindemnified in full. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations None of the Seller or the Subsidiaries Shareholders shall assert any claim for indemnification hereunder against Purchaser until such time as the aggregate of all claims which Seller or the Seller (other than any liabilities Shareholders may have against Purchaser shall exceed $27,000, whereupon such claims shall be indemnified in full. The limitation on assertion of claims for indemnification contained in this paragraph shall apply only to claims based on inaccuracies in, or obligations of the Seller (breaches of, representations and warranties contained in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ this Agreement or any Company Subsidiary document, instrument, certificate or other item required to be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article 10 if and to the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any of the Integrated Assets representation, warranty, covenant or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as other agreement set forth in Section 4.5this Agreement. Notwithstanding any other term of this Agreement, (v) indemnity obligations of the Seller and DQE the Shareholders shall not be liable under this Article 10 for an amount which exceeds the aggregate amount of proceeds received by the Seller in respect connection with the transactions contemplated herein. For purposes of certain litigation as set forth in Section 4.6, (vi) indemnity obligations calculating the value of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed DocuNet Stock received by DQE, the Seller, the Company DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made unless an Indemnity Notice, an Unliquidated Indemnity Notice or any Company Subsidiary a Claim Notice (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed as applicable) has been given prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)applicable survival period.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding The Indemnified Persons may not recover Losses from the Escrow Fund or the Indemnitors in respect of any other provision claim for indemnification under Section 6.3(a) unless and until the total amount of this Agreement all Losses arising out of or resulting from the matters described in Section 6.3(a) that have been incurred or paid by the Indemnified Persons exceeds USD 25,000 (the “Indemnification Threshold”), it being understood that if the total amount of such Losses exceeds the Indemnification Threshold, then the Indemnified Persons shall be entitled to be indemnified for the contraryamount by which such Losses exceed the Indemnification Threshold; provided, that the Parties' obligations pursuant Indemnified Persons will be entitled to this Article IV arerecover for, and at all times shall bethe Indemnification Threshold will not apply to, any Losses in connection with intentional misrepresentation or fraud by the Company.
(b) Recovery by Indemnified Persons of their Losses will be subject to the limitations following limitations:
(1) Except as otherwise set forth in this Section 4.3. The 6.4, with respect to Losses claimed under Section 6.3(a)(1) as a result of breaches of or inaccuracies in any representation or warranty made in this Agreement (other than Fundamental Representations), an Indemnified Person may recover its Losses only from the Escrow Fund.
(2) With respect to Losses in connection with intentional misrepresentation or fraud by the Company in this Agreement, any other Transaction Document or any certificates or other instruments delivered by or on behalf of the Company pursuant to this Agreement or claimed under Section 6.3(a)(1) as a result of breaches of or inaccuracies in the Fundamental Representations and Sections 6.3(a)(2), 6.3(a)(3), 6.3(a)(4), 6.3(a)(5) and 6.3(a)(6), an Indemnified Person may recover its Losses (A) from the Escrow Fund and (B) to the extent such Losses exceed the amount recovered from the Escrow Fund, directly from the Indemnitors.
(3) Notwithstanding anything to the contrary herein, no individual Seller shall be severally liable for Losses in respect of any claim for indemnification under Section 6.3(a) in excess of the total amount of consideration such Seller has received pursuant to Section 1.1; provided that such limitation shall not apply to any Losses in connection with intentional misrepresentation or fraud.
(c) Other than pursuant to Section 6.3(a)(1) in connection with a breach of a representation or warranty by the Company herein or fraud or willful misrepresentation by the Company, the Indemnified Persons shall have no claim or right to recovery, and none of the Indemnitors shall have or be subject to any liability to the Indemnified Persons with respect to any projections, business plans, budgets of future revenue of the Company.
(d) Except as otherwise required by applicable Law, the Parties shall treat any indemnification payments made under this Agreement as an adjustment to the purchase price paid under this Agreement for accounting and Tax purposes.
(e) Indemnitor will not have any right of contribution, right of indemnity or other right or remedy against Buyer, the Company or any other Indemnified Person for any indemnification payments made by Indemnitor (whether directly or out of the Escrow Fund) pursuant to this Article 6.
(f) No Indemnified Person’s rights under this Article 6 will be adversely affected by any investigation conducted, or any knowledge acquired or capable of being acquired, by such Indemnified Person at any time, whether before or after the Agreement Date, or by the waiver of any condition to Closing. No Indemnified Person shall be required to indemnifyshow reliance on any representation, defend warranty, certificate or hold harmless any Buyer Indemnitee or Seller Indemnitee, as other agreement in order for such Indemnified Person to be entitled to indemnification hereunder.
(g) From and after the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionClosing, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, remedies contained in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount 6 are intended to provide the sole and exclusive remedy of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))each Indemnified Person for matters arising out of this Agreement; provided, however, that nothing in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by 6 or elsewhere in this Agreement shall affect the Indemnity CapParties’ rights to specific performance, injunction or other equitable remedies to enforce the Parties shall refer Parties’ obligations under this Agreement, or limit recovery against an Indemnitor for such Indemnitor’s fraud or such Indemnitor’s willful breach of any of the covenants or agreements contained in Section 4.3 (Release of Claims). In particular, but without limitation, no breach or inaccuracy, even if material, of any representations, warranties, undertakings or covenants of the Sellers will give rise to the Indemnity Cap that is or was in effect any right on the date that part of the Buyer Indemnitee to rescind or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofterminate this Agreement.
(bh) As used in this AgreementLosses shall be calculated net of actual recoveries received by Buyer or the Company has received or is entitled to receive from any third party including an insurer (net of any actual costs of recovery or collection, deductibles, retroactive premium adjustments, reimbursement obligations or other costs directly related to the insurance claim and deductibles) with reference to the specific matter which is the subject of the request for indemnification; provided that neither Buyer nor the Company shall have any obligation to take any action to obtain such payments or to obtain or maintain any such insurance policies.
(i) If any Liability Claim is based upon a liability which is contingent only, the term "Indemnity Basket" Buyer shall mean $250,000, and (ii) be entitled to send a Claim Notice also for the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary purpose of the Closing Date, Escrow Agreement but the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses Sellers shall not be limited by the Indemnity Cap: obliged to make any indemnification payment to Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any unless and all liabilities until such contingent liability becomes due and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)actually payable.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of anything in this Agreement to the contrarycontrary and except in respect of any Basket Exclusion (as hereinafter defined), the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3▇▇. The Parties ▇▇▇ shall not be required obligated to indemnify, defend or hold harmless pay any Buyer Indemnitee or Seller Indemnitee, as amounts pursuant to the case may be, indemnification obligations hereof in respect of any Losses until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Lossamounts exceeds $2,000,000, as and then ▇▇. ▇▇▇ shall only be liable to pay amounts hereunder in excess of $2,000,000 (the case may be, to the Seller as contemplated by Section 4.4 hereof“Deductible Amount”).
(b) As used Notwithstanding anything in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrarycontrary and except in respect of the Cap Exclusions (as hereinafter defined), the Seller's total maximum aggregate indemnification payments hereunder for ▇▇. ▇▇▇ for all claims for Losses suffered by the Indemnified Parties pursuant to the indemnification obligations in Section 1 shall not exceed the Fair Market Value (as defined in the Indemnification Escrow Agreement and DQE's liability for calculated with reference to the following Buyer Indemnifiable date any indemnification claim is “finally determined” in accordance with the provisions thereof) relating to the shares of Gateway Common Stock held in escrow in accordance with the provisions of Section 10 hereof (the “Maximum Aggregate Indemnification”). Losses with respect to any Cap Exclusion shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating Maximum Aggregate Indemnification; that is, ▇▇. ▇▇▇ shall be obligated to pay all amounts pursuant to the indemnification obligations hereof in respect of any Cap Exclusion. For purposes of this Agreement, “Cap Exclusion” shall mean:
(i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(iindemnification obligations under Section 1(a)(v) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date)hereof; in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, and
(ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC indemnification obligations pursuant to Section 1.12 hereof.
(c) Losses with respect to any Basket Exclusion shall not be subject to the Deductible Amount; that is, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC ▇▇. ▇▇▇ shall be obligated to pay all amounts pursuant to Section 1.1the indemnification obligations hereof in respect of any Basket Exclusion. For purposes of this Agreement, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).“Basket Exclusion” shall mean:
Appears in 1 contract
Sources: Merger Agreement (Gateway Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations Sellers and Stockholders shall have no liability pursuant to this Article IV are, and at all times shall be, subject X (other than for any breach of or failure by any Seller or the Sellers Representative to perform any covenant or obligation of any Seller or the limitations Sellers Representative set forth in this Sections 2.2(b)-(e), 2.3 (but only with respect to the payment of fees and expenses by Bankstream and the Sellers' guaranty related thereto) or 2.4 (but only with respect to the payment of fees and expenses by Bankstream and the Sellers' guaranty related thereto) or any breach of or failure by any Stockholder or the Stockholders Representative to perform any covenant or obligation of any Stockholder or the Stockholders Representative set forth in Section 4.3. The Parties shall not be required 2.2(b)(e), 2.3 (but only with respect to indemnify, defend the payment of fees and expenses by Bankstream and the Stockholders' guaranty related thereto) or hold harmless any Buyer Indemnitee or Seller Indemnitee, as 2.4 (but only with respect to the case may be, payment of fees and expenses by Bankstream and the Stockholders' guaranty related thereto) of the Merger Agreement) unless and until the aggregate amount of all Losses incurred or suffered by the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, Purchaser Indemnified Parties exceeds the Indemnity Basket (as defined in Section 4.3(b))Deductible Amount, following after which time the indemnifying Party Purchaser Indemnified Parties shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, be entitled to recover only to the extent that the Buyer Indemnifiable those Losses or the Seller Indemnifiable Losses, as the case may be, which exceed the Indemnity Basket. In additionDeductible Amount, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses Sellers and the Buyer's Stockholders shall have no liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited X for any Losses incurred or suffered by the Indemnity Purchaser Indemnified Parties that in the aggregate are in excess of the Indemnification Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary The amount of the Closing Date, the Indemnity Cap any Losses incurred or suffered by any Indemnified Person shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating calculated after giving effect to (i) any litigation, existing insurance proceeds received by the Indemnified Person (or threatened, that is required any of its Affiliates) with respect to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, such Losses and (ii) Excluded Assetsany recoveries obtained by the Indemnified Person (or any of its Affiliates) from any third parties with respect to such Losses. Each Indemnified Person shall use all commercially reasonably efforts to obtain such proceeds and recoveries. If any such proceeds or recoveries are received by an Indemnified Person (or any of its Affiliates) with respect to any Losses after an Indemnifying Person has made a payment to the Indemnified Person with respect thereto, the Indemnified Person (iiior such Affiliate) any and all liabilities and obligations shall pay to the Indemnifying Person the amount of such proceeds or recoveries (up to the amount of the Seller or Indemnifying Person's payment). Upon making any payment to an Indemnified Person in respect of any Losses, the Subsidiaries Indemnifying Person will, to the extent of such payment, be subrogated to all rights of the Seller Indemnified Person (and its Affiliates) against any insurance company or other than any liabilities or obligations of the Seller (third party in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ Losses to which such payment relates. Such Indemnified Person (and its Affiliates) and such Indemnifying Person will execute upon request all instruments reasonably necessary to evidence or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)further perfect such subrogation rights.
Appears in 1 contract
Sources: Interest Purchase Agreement (Ameritrade Holding Corp)
Limitations on Indemnification. (a) Notwithstanding any provision in this Agreement or the Related Documents to the contrary or any investigation made by or on behalf of any of the parties hereto or the results of any such investigation and notwithstanding the participation of such party in the Closing, with respect to any specific representation or warranty under which any party shall have made a claim for indemnification hereunder prior to the expiration date of the applicable survival term specified in Section 9.1 and as to which such claim has not been completely and finally resolved prior to such expiration date, such representation or warranty shall survive for the period of time beyond such expiration date sufficient to resolve, completely and finally, the claim relating to such representation or warranty.
(b) Sellers shall have no obligation to provide indemnification pursuant to Section 9.2 except to the extent that the aggregate amount of indemnification to which the Buyer Indemnified Parties, but for this Section 9.5(b), otherwise shall have become entitled hereunder shall exceed $150,000 (the “Threshold”), and in such event Sellers shall be obligated to provide indemnification with respect to all such amounts (and not just the amounts in excess of the Threshold). Sellers’ indemnification obligations under this Agreement shall be calculated net of any amounts recoverable under insurance policies and net of any related Tax benefits.
(c) Notwithstanding any other provision of contained in this Agreement to the contrary, the Parties' obligations in no event shall Sellers have any liability for indemnification pursuant to this Article IV areSection 9.2 or otherwise in an aggregate amount in excess of seventy-five percent (75%) of the Purchase Price paid at Closing (as adjusted pursuant to the adjustment provisions of Sections 2.1(b) and 2.1(c) hereof) and in accordance with the Promissory Note (excluding interest paid thereon), and at all times less any amount paid by SOURCECORP in satisfaction of its guarantor obligations under this Agreement.
(d) Buyer shall be, subject have no obligation to the limitations set forth in this provide indemnification pursuant to Section 4.3. The Parties shall not be required to indemnify, defend 9.3 or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only otherwise except to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal indemnification to which Sellers, but for this Section 9.5(d), otherwise shall have become entitled hereunder shall exceed the Indemnity Cap Threshold, and in such event Buyer shall be obligated to provide indemnification with respect to all such amounts (as defined and not just the amounts in Section 4.3(bexcess of the Threshold)); provided, however, that in determining whether the Seller's . Buyer’s indemnification obligations under this Agreement shall be calculated net of any amounts recoverable under insurance policies and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice net of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofany related Tax benefits.
(be) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of contained in this Agreement to the contrary, the Seller's and DQE's in no event shall Buyer have any liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC indemnification pursuant to Section 1.1, 9.3 or the Company or any Company Subsidiary on or after other terms of this Agreement in an aggregate amount in excess of seventy-five percent (75%) of the Purchase Price paid at Closing Date(as adjusted pursuant to the adjustment provisions of Sections 2.1(b) and 2.1(c) hereof), and in accordance with the Promissory Note (iiiexcluding interest paid thereon).
(f) any fraud committed by PSCAny indemnification payable under this Article IX shall be, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers extent permitted by law, an adjustment to fraud committed on or after the Closing Date)Purchase Price.
Appears in 1 contract
Limitations on Indemnification. The Purchaser, and the other Persons or entities indemnified hereunder shall not assert any claim or be entitled to indemnification against the Seller or the Members until such time as the aggregate of all claims which such persons may have against the Seller or the Members shall exceed $10,000 (a) Notwithstanding the "Indemnification Threshold"), whereupon such claims shall be indemnified in excess of the Indemnification Threshold. Neither the Seller nor the Members shall assert any other provision claim for indemnification against the Purchaser until such time as the aggregate of all claims which the Seller or the Members may have against the Purchaser shall exceed the Indemnification Threshold, whereupon such claims shall be indemnified in excess of the Indemnification Threshold. The limitation on the assertion of claims for indemnification contained in this paragraph shall apply only to claims based upon inaccuracies in, or breaches of, representations and warranties contained in this Agreement or any document, instrument, certificate or other item required to the contrary, the Parties' obligations be furnished pursuant to this Article IV are, and at all times shall be, subject to Agreement or in connection with the limitations set forth in transaction contemplated by this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity BasketAgreement. In addition, the Seller's Indemnification Threshold shall be separate and DQE's liability, taken together, for Buyer Indemnifiable Losses apart from the Rework Threshold and any claims in connection with the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by Rework Expenses shall not apply to the Indemnification Threshold. No person shall be entitled to indemnification under this Article IV shall in no event exceed an aggregate amount of dollars equal 10 if and to the Indemnity Cap (as defined in Section 4.3(b)); providedextent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, howeverwarranty, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss covenant or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used other agreement set forth in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision term of this Agreement to the contraryAgreement, the Seller's Seller and DQE's liability for the following Buyer Indemnifiable Losses Members on the one hand, and the Purchaser on the other hand, shall not be limited liable under this Article 10 for an amount which exceeds $625,000. No claim under this Article 10 shall be made unless an Indemnity Notice, or a Claim Notice (as applicable) has been given prior to the applicable survival period. In computing the amount of any Indemnifiable Loss which is sustained, suffered or incurred by the Indemnity Cap: Buyer Indemnified Party, the Indemnifying Party shall be given the benefit of insurance proceeds, if any (up to a maximum equal to the amount of the Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(aLoss), 3.8(b)actually received by the Indemnified Party, 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) reduced by any and all liabilities and obligations out-of-pocket costs, legal or otherwise, incurred by the Indemnified Party in the collection of such insurance proceeds; it being understood that the Seller other party shall at no time be deemed to be a third-party beneficiary of any such insurance. Further, the parties acknowledge that due to the uncertainties of collection of any such insurance proceeds, the potential availability of insurance proceeds will not abrogate a party's responsibility to reimburse the Indemnified Party for any Indemnifiable Loss sustained, suffered or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxesincurred, as set forth in Section 4.5and when such Indemnifiable Loss is sustained, (v) indemnity obligations suffered or incurred; it being understood that if insurance proceeds are thereafter received by the Indemnified Party with respect to such Indemnifiable Loss, the proceeds of such insurance will be utilized to reimburse the Indemnifying Party for any payments made on account of such Indemnifiable Loss, with the remainder of any such insurance proceeds to be retained by the Indemnified Party. Purchaser shall use commercially reasonable efforts to obtain insurance proceeds which may be available to cover an Indemnifiable Loss on behalf of Seller and DQE the Members. The Indemnifying Party shall have no obligation to indemnify the Indemnified Party for consequential damages, special damages, incidental damages, indirect damages, lost profits or similar items. The Indemnified Party shall not bring a claim or be entitled to indemnification with respect to any facts or circumstances resulting in respect a breach of certain litigation as set forth in Section 4.6any representation, (vi) indemnity obligations warranty, covenant or agreement of which the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company Indemnified Party had actual knowledge on or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to before the Closing Date); in addition. To the extent that an Indemnifying Party discharges any claim for indemnification hereunder, the Buyer's liability for the following Seller Indemnifiable Losses such Indemnifying Party shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating subrogated to (i) indemnity obligations all rights of the Parties in respect Indemnified Party against third parties. The indemnification rights of Taxes, as set forth in Section 4.5, (ii) any breach or violation the parties under this Article 10 are exclusive of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, other rights and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided remedies that the foregoing reference parties may have under this Agreement (but for this provision), at law or in equity or otherwise with respect to the Company or any Company Subsidiary refers transactions provided for herein, except as to fraud committed rights which may be exercised against a party on or after the Closing Date)account of such party's fraud.
Appears in 1 contract
Limitations on Indemnification. (a) Except with respect to breaches of the ED&F Fundamental Representations and of the 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), (iv) or (v) of Section 10.2(a) until the aggregate amount of all such Losses 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 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 for Losses under Section 10.2(a)(i) in the aggregate in excess of $30,000,000 (the "Cap").
(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 any other provision of 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 Parties' obligations pursuant to this Article IV are, Loss relating thereto is less than $75,000 and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties such items shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount aggregated for purposes of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)10.4(a); provided, however, that in that, solely for purposes of determining whether the Seller's and DQE's liability amount of a Loss for a particular Buyer Indemnifiable Loss Tax indemnifiable under Section 10.2(a)(iii) is less than $75,000, no offset or reduction for any other Tax included in the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties determination of Merger Closing Date Net Indebtedness or Stock Sale Closing Date Net Indebtedness shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofbe taken into consideration.
(be) As used Notwithstanding anything in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable except with respect to Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to 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 Section 10.2(a) shall not in any litigationevent exceed the Adjusted Stock Sale Purchase Price.
(f) Notwithstanding anything in this Agreement to the contrary, existing neither ED&F nor Holdings shall have any obligation to indemnify or threatenedhold harmless any Parent Indemnified Party with respect to any Losses resulting or arising from any breach of the representations and warranties contained in Section 5.15 (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 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 (ii) Losses resulting or arising from such breach shall be made without regard to any materiality qualification (including any reference to Business Material Adverse Effect or Parent Material Adverse Effect), except for such qualifications contained in the representations and warranties set forth in Sections 3.7, 3.8(a5.5(c), 3.8(bSection 5.5(e) , the first sentence of Section 5.6, and Sections 5.11(a), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company5.11(c), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities5.11(f), 5.12(g) and 5.28.
(h) Notwithstanding anything in this Agreement to the contrary, a Parent Indemnified Party's right to commence any claim under clauses (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, and (v) indemnity obligations of Section 10.2(a) shall terminate on the date that is the second anniversary of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7Original Agreement Date, and neither ED&F nor Holdings shall have any obligation to indemnify or hold harmless any Parent Indemnified Party under clauses (viiiv) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary and (provided that the foregoing reference v) of Section 10.2(a) unless and except to the Company or any Company Subsidiary refers to fraud committed extent that a bona fide Claim Notice specifically relating thereto is delivered prior to the Closing Datesuch date in accordance with Section 10.3(a); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to .
(i) indemnity obligations of the Parties Notwithstanding anything in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference this Agreement to the Company contrary, neither ED&F nor Holdings shall have any obligation to indemnify or hold harmless any Company Subsidiary refers Parent Indemnified Party under Section 10.2(a)(v) to fraud committed on the extent the claim for indemnification relates to any environmental matters, Environmental Liabilities, Hazardous Substances or after the Closing Date)Environmental Laws.
Appears in 1 contract
Sources: Transaction Agreement (Shermen WSC Acquisition Corp)
Limitations on Indemnification. The rights of the Parent Indemnified Parties and the Stockholder Indemnified Parties to indemnification pursuant to the provisions of this Article VII are subject to the following limitations:
(a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary herein, except for claims in respect of the Parties' obligations breach of any Company Fundamental Representation or for claims in respect of fraud or intentional misrepresentation, no claims for indemnification by any Parent Indemnified Party pursuant to this Article IV areSection 7.02(a) shall be so asserted, and at all times no Parent Indemnified Party shall bebe entitled to recover Losses, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to [***] (the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)“Deductible”), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that such Losses exceed the Buyer Indemnifiable Deductible, such Parent Indemnified Party shall be entitled to recover only such Losses in excess of the Deductible.
(b) Notwithstanding anything to the contrary herein, except for claims in respect of the breach of any Parent Fundamental Representation or the Seller Indemnifiable for claims in respect of fraud or intentional misrepresentation, no claims for indemnification by any Stockholder Indemnified Party pursuant to Section 7.03(a) shall be so asserted, and no Stockholder Indemnified Party shall be entitled to recover Losses, as unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to the Deductible, and to the extent such Losses exceed the Deductible, such Stockholder Indemnified Party shall be entitled to recover only such Losses in excess of the Deductible.
(c) Notwithstanding anything to the contrary in this Article VII or this Agreement, except in the case may beof fraud or intentional misrepresentation, exceed (i) and except in the Indemnity Basket. In additioncase of any claims for breaches of Company Fundamental Representations, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's in no event shall any Stockholder have any liability for Seller Indemnifiable Lossesclaims under Section 7.02(a) [***] of the Closing Merger Consideration actually received by such Stockholder pursuant to this Agreement and (ii) in no event shall any Stockholder have any liability under this Agreement [***] actually received by such Person pursuant to this Agreement.
(d) Notwithstanding anything to the contrary in this Article VII or this Agreement, except in the case of fraud or intentional misrepresentation, in either no event shall Parent have any liability under this Agreement in excess of the Merger Consideration.
(e) Each Indemnitee shall use its reasonable efforts to mitigate or resolve any Loss prior to seeking indemnity therefor under this Article VII; provided, however, that no such no such Indemnitee shall be required to take any action or refrain from taking any action that is contrary to any applicable Contract or Law binding on such Indemnitee or any Affiliate thereof. No Indemnitee shall make any claim for indemnification under this Article VII in respect of any matter that is taken into account as a reduction in the calculation of the Merger Consideration. Any Indemnitee shall not be entitled to double recovery for any adjustments to consideration provided for hereunder or Losses even though such Losses may have resulted from the breach of more than one of the representations, warranties, agreements and covenants in this Agreement. The obligations of any Indemnitee under this Section 7.04(e) shall not apply to any Losses in respect of Taxes to the extent reasonable efforts to mitigate such Losses would reasonably be expected to give rise to any unreimbursed cost or expense to such Indemnitee.
(f) Any indemnification payments shall be net of Tax benefits actually realized, (i) in the case of a payment to a Parent Indemnified Party, by any Parent Indemnified Party or Affiliate of a Parent Indemnified Party, and (ii) in the case of a payment to a Stockholder Indemnified Party, by any Stockholder Indemnified Party or Affiliate of a Stockholder Indemnified Party, in each case, as contemplated by this Article IV shall in no event exceed an aggregate amount a result of dollars equal the circumstances giving rise to the Indemnity Cap (as defined indemnification payment, to the extent such Tax benefit actually reduces Taxes payable in Section 4.3(b))the taxable year in which the indemnifiable loss is incurred; provided, however, that in determining whether the Seller's and DQE's liability for case of a particular Buyer Indemnifiable Loss or the Buyer's liability for payment to a particular Seller Indemnifiable LossStockholder Indemnified Party, in either case, pursuant to this Article IV is limited no Tax benefit realized by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is Company or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofParent will be taken into account.
(bg) As used in this Agreement, (i) Notwithstanding anything to the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a)contrary herein, in which case the Indemnity Cap no event shall continue any Parent Indemnified Party be entitled to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable recover Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ a breach of a representation or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as warranty set forth in Section 4.5, 2.08 (v) indemnity obligations of the Seller and DQE in respect of certain litigation as other than a representation or warranty set forth in Section 4.6, 2.08(l)) to the extent that such Losses relate or are attributable to (vix) indemnity obligations of Taxes for Tax periods beginning after the Seller and DQE in respect of Environmental Law, as Closing Date or attributable (under the principles set forth in Section 4.7, and (viithe last sentence of the definition of “Pre-Closing Taxes”) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to portion of a Straddle Period beginning after the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating Date or (y) Tax Return preparation or filing requirements with respect to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or Tax Returns due after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Limitations on Indemnification. The rights of Purchaser Indemnified Parties and the Seller Indemnified Parties to indemnification pursuant to the provisions of this Article VI are subject to the following limitations:
(a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, except for claims in respect of the Parties' obligations breach of any Fundamental Representation or for claims in respect of fraud by the Company or the Seller (or, for avoidance of doubt, for claims under Section 8.18), no claims for indemnification by any Purchaser Indemnified Party pursuant to this Article IV areSection 6.02(a) shall be so asserted, and at all times no Purchaser Indemnified Party shall bebe entitled to recover Losses, subject to (1) unless any individual Loss or group or series of related Losses exceeds $25,000 (the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, “Mini-Basket”) and (2) until the aggregate amount of Losses (which shall not include for such purposes any individual Loss or group or series of related Losses that do not exceed the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Mini-Basket) that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to $100,000 (the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)“Deductible”), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable such Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionDeductible, such Purchaser Indemnified Party shall be entitled to recover all such Losses in excess of the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofDeductible.
(b) As used Notwithstanding anything to the contrary contained herein, except for claims in this Agreementrespect of fraud by Purchaser, (i) no claims for indemnification by the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Seller Indemnified Party pursuant to Section 4.2(a)6.04(a) shall be so asserted, in which case and no Seller Indemnified Party shall be entitled to recover Losses, (1) unless any individual Loss or group or series of related Losses exceeds the Indemnity Cap shall continue to mean $7,500,000 Mini-Basket and (2) until the third aggregate amount of Losses (3rdwhich shall not include for such purposes any individual Loss or group or series of related Losses that do not exceed the Mini-Basket) anniversary that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to the Deductible, and to the extent such Losses exceed the Deductible, such Seller Indemnified Party shall be entitled to recover all such Losses in excess of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Deductible.
(c) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, the Seller's and DQE's liability except for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (claims in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ breach of Section 3.03(a) or any Company Subsidiary or any Section 3.03(c) and except in the case of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or the Seller (or, for avoidance of doubt, for claims under Section 8.18), in no event shall the Seller have any Company Subsidiary liability under this Agreement in excess of the Purchase Price received by the Seller pursuant to this Agreement.
(d) Notwithstanding anything to the contrary contained herein, except in the case of fraud by Purchaser, in no event shall Purchaser have any liability under this Agreement in excess of the Purchase Price.
(e) Notwithstanding anything to the contrary contained herein, the amount of any Losses subject to recovery under this Article VI by Purchaser Indemnified Parties shall be calculated net of any amounts (A) actually received from any third party insurance policy of Purchaser or its Affiliates with respect to Losses for which any such Person has received indemnity payments hereunder (net of any (x) premium increases or retroactive premium adjustments and (y) any costs and expenses incurred by Purchaser or its Affiliates in connection with such recovery) and (B) any Tax benefits realized by Purchaser Indemnified Parties from such Losses (net of any costs and expenses incurred by Purchaser or its Affiliates in connection with such recovery).
(f) An Indemnified Party shall use commercially reasonable efforts to mitigate Losses suffered, incurred or sustained by such Indemnified Party arising out of any matter for which such Indemnified Party has sought indemnification hereunder; provided that the foregoing reference no such Indemnified Party shall be required to the Company take any action or refrain from taking any action that is contrary to any applicable Contract or Law binding on such Indemnified Party or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Affiliate thereof.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Tecogen Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision The indemnification obligations of Seller pursuant to Section 7.2(a) shall not be effective unless and until the aggregate dollar amount of all claims for Damages which would otherwise be indemnifiable by it pursuant to this Agreement (collectively, "Buyer Claims") exceeds $100,000 in the aggregate (the "Threshold Amount"), it being understood that such Buyer Claims shall accumulate until such time as the aggregate of all Buyer Claims exceeds such Threshold Amount, whereupon the indemnification obligations of Seller shall become effective, as qualified below, for all Buyer Claims, including those in respect of the Threshold Amount. With respect to those representations and warranties contained in Section 4 of this Agreement which are qualified by materiality, for purposes of computing the Threshold Amount, the amount of Buyer Claims shall be calculated without regard to such materiality qualifiers. Notwithstanding anything to the contrarycontrary herein, the Parties' obligations pursuant rights of Buyer to this Article IV are, and at all times indemnification under Section 7.2 shall be, subject to be limited as follows: (i) the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend amount of any Damages incurred or hold harmless sustained by any Buyer Indemnitee or Seller Indemnitee, as shall be reduced by the case may be, until the aggregate net amount of any Tax benefits allowable to any Buyer Indemnitee by reason of such Damages or any adjustment to any Tax item of any Buyer Indemnitee related to such Damages; (ii) the amount of any Damages incurred or sustained by any Buyer Indemnifiable Losses Indemnitee shall be reduced by the net amount recoverable by any Buyer Indemnitee from any insurer or Seller Indemnifiable Losses, as other party liable for such Damages; and (iii) the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party amount of any Damages incurred or sustained by any Buyer Indemnitee shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only be reduced to the extent that the such Damages shall have been caused, contributed to or exacerbated by any action or omission of any Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used The indemnification obligations of Buyer pursuant to Section 7.3(a) shall not be effective unless and until the aggregate dollar amount of all claims for Damages which would otherwise be indemnifiable by it pursuant to this Agreement (collectively, "Seller Claims") exceeds the Threshold Amount, it being understood that such Seller Claims shall accumulate until such time as the aggregate of all Seller Claims exceeds such Threshold Amount, whereupon the indemnification obligations of Buyer shall become effective, as qualified below, for all Seller Claims, including those in respect of the Threshold Amount. With respect to those representations and warranties contained in Section 5 of this AgreementAgreement which are qualified by materiality, for purposes of computing the Threshold Amount, the amount of Buyer Claims shall be calculated without regard to such materiality qualifiers. Notwithstanding anything to the contrary herein, the rights of any Seller Indemnitee to indemnification under Section 7.3 shall be limited as follows: (i) the term "Indemnity Basket" amount of any Damages incurred or sustained by any Seller Indemnitee shall mean $250,000, and be reduced by the net amount of any Tax benefits allowable to any Seller Indemnitee by reason of such Damages or any adjustment to any Tax item of any Seller Indemnitee related to such Damages; (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary amount of the Closing Date, the Indemnity Cap any Damages incurred or sustained by any Seller Indemnitee shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) net amount recoverable by any litigation, existing Seller Indemnitee from any insurer or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date)party liable for such Damages; in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) the amount of any fraud committed Damages incurred or sustained by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference Seller Indemnitee shall be reduced to the Company extent such Damages shall have been caused, contributed to or exacerbated by any Company Subsidiary refers to fraud committed on action or after the Closing Date)omission of any Seller Indemnitee.
Appears in 1 contract
Sources: Asset Purchase Agreement (Opticare Health Systems Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Sellers shall not be required to indemnify, defend make any indemnification payment pursuant to Section 8.2(a) or hold harmless with respect to any Buyer Indemnitee or breach by any Seller Indemnitee, as the case may be, until the aggregate amount Party of the Buyer Indemnifiable covenant contained in the second sentence of Section 5.8(c) for any individual failure of a representation or warranty to be true and correct where the Loss relating to such individual failure is less than JPY5,000,000 (the “Per Claim Threshold”). Losses relating to separate claims that arise from an individual failure of a representation or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend warranty to be true and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, correct will be aggregated for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount purposes of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss Per Claim Threshold is satisfied if the separate claims arise from the same or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is substantially similar facts or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofcircumstances.
(b) As used The Sellers shall not be required to make any indemnification payment pursuant to Section 8.2(a) or with respect to any breach by any Seller Party of the covenant contained in the second sentence of Section 5.8(c) until such time as the total amount of all Losses that have been incurred by any one or more of the Purchaser Indemnitees and with respect to which any indemnification payment would otherwise be available to the Purchaser Indemnitees pursuant to such section, exceeds an aggregate of JPY500,000,000 (the “Deductible Amount”), except that the Purchaser Indemnitees will be entitled to recover for, and the Deductible Amount will not apply to, any Losses with respect to any breach of or inaccuracy in any Seller Fundamental Representation (other than Seller Fundamental Representations set forth in Schedule 3.2(l) (Intellectual Property)). Once the Deductible Amount has been exceeded, the Purchaser Indemnitees shall be entitled to be indemnified against all Losses in excess of the Deductible Amount.
(c) The maximum amount of indemnifiable Losses that may be recovered by the Purchaser Indemnitees from the Sellers with respect to the matters described in Section 8.2(a) and with respect to any breach by any Seller Party of the covenant contained in the second sentence of Section 5.8(c) shall be an aggregate amount equal to the Indemnification Holdback Amount.
(d) The limitations on the indemnification obligations of the Sellers set forth in Sections 8.3(a), 8.3(b) and 8.3(c) do not apply to any Losses arising from any matter described in Sections 8.2(b) (other than any breach of the covenant contained in the second sentence of Section 5.8(c) by any Seller Party, which is limited by Section 8.3(c) only), (c), (d), (e), (f), or (g).
(e) No Seller will have any right of contribution, right of indemnity or other right or remedy against Purchaser, RSP or RSP-TW in connection with any indemnification obligation or any other liability to which such Seller may become subject under or in connection with this Agreement.
(f) The Purchaser Indemnitees may not recover duplicative amounts in respect of the same Losses from multiple Sellers.
(g) Notwithstanding anything to the contrary in this Agreement, (i) with respect to the term "Indemnity Basket" shall mean $250,000, representations and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, warranties made by any Seller pursuant to Section 4.2(a3.1 (or any certification to the extent related to any such representations and warranties), in which case each Seller shall solely indemnify the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Purchaser Indemnitees against Losses shall not be limited that are incurred by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), Purchaser Indemnitees and that arise from such Seller’s breach of such representations and warranties (iv) indemnity obligations of the Parties in and not with respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation representations and warranties of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC other Seller pursuant to Section 1.1, the Company 3.1 (or any Company Subsidiary on or after certification to the Closing Dateextent related to any such representations and warranties)).
(h) Notwithstanding anything to the contrary in this Agreement, with respect to Losses other than with respect to the representations and (iii) any fraud committed warranties made by PSC, Acquisition, any Buyer Subsidiary designated by PSC the Sellers pursuant to Section 1.1, the Company 3.1 (or any Company Subsidiary (provided that the foregoing reference certification to the Company or extent related to any Company Subsidiary refers such representations and warranties), each Seller’s liability shall be several and not joint, and the liability of the Sellers therefor shall be apportioned among the Sellers pro rata in proportion to fraud committed on or after the Closing Date)Sellers’ respective Holdback Percentages.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement No Buyer Indemnitee shall be entitled to be indemnified for Losses with respect to the contrarymatters described in Section 9.2(a): (i) with respect to any claim (or series of related claims) for indemnification if the amount of Losses with respect to such claim (or series of related claims, as the Parties' obligations pursuant to this Article IV are, and at all times shall case may be, subject to ) is less than $75,000 (the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend “Claim Threshold”; any claim or hold harmless any Buyer Indemnitee or Seller Indemniteeseries of related claims, as the case may be, involving Losses less than the Claim Threshold being referred to as a “De Minimis Claim”) (it being understood that (x) subject to clause (ii) of this Section 9.5(a) and the other limitations set forth herein, if such Losses exceed the Claim Threshold, the Buyer Indemnitees shall be entitled to seek indemnification for the full amount of such Losses and (y) any De Minimis Claims shall be excluded in determining whether the Deductible has been exceeded), and (ii) until the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant to Section 9.2(a) exceeds an amount equal to $3,500,000 (the “Deductible”), and then only to the extent such Losses exceed the Deductible. Sellers’ maximum aggregate Liability for indemnifiable Losses pursuant to Section 9.2(a) will not exceed an amount equal to $3,500,000 (the “Cap”).
(b) The Claim Threshold, the Deductible and the Cap shall not apply to Losses to the extent relating to or arising from the matters set forth in Section 6.10, Section 9.2(b) or Section 9.3(b); provided, however, that, notwithstanding anything to the contrary in this Agreement, Buyer Indemnitees shall not be entitled to indemnification for any Losses (individually or in the aggregate) related to such matters, together with any indemnifiable Losses pursuant to Section 9.2(a) or any other indemnifiable Losses with respect to such matters, in excess of the Final Purchase Price actually received by the Sellers and their Affiliates.
(c) If there is finally determined to be any amount owing to a Buyer Indemnitee as a result of indemnification pursuant to Section 9.2(a), such amount shall (i) first satisfied from the Indemnity Escrow Account, and (ii) subject to the last sentence of this Section 9.5(c), if such Losses exceed the value of the Indemnity Escrow Shares in the Indemnity Escrow Account, the sole and exclusive source of recovery of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Indemnitees shall be under the R&W Policy (if any). In the case of any satisfaction from the Indemnity Escrow Account, the Seller Representative shall promptly (but in no event later than two (2) Business Days thereafter) execute a joint instruction with Dory Parent to release such amount of Indemnity Escrow Shares from the Indemnity Escrow Account to Dory Parent to be held as “treasury” shares or cancelled. If there is determined to be any amount owing to a Buyer Indemnitee as a result of indemnification pursuant to Section 9.2(b) or Section 6.10(a)(i), such amount shall (i) first be satisfied from the Indemnity Escrow Account, (ii) if recovery is available under the R&W Policy (if any), from the R&W Policy and (iii) thereafter, directly from the Sellers, jointly and severally, by wire transfer to an account Table of Contents or accounts designated by Buyer (A) in the case of indemnification pursuant to Section 9.2(b), within five Business Days following the final determination of the claim for indemnification giving rise to such payment obligation or (B) in the case of indemnification pursuant to Section 6.10(a)(i), within the time period set forth in Section 6.10(a)(iv). Notwithstanding the foregoing or anything in this Agreement to the contrary, (i) in the event that HYAC obtains and binds the R&W Policy at the Closing, to the extent that a Buyer Indemnitee would have (subject to the terms and conditions hereof) been entitled to indemnification from the Indemnity Escrow Account pursuant to Section 9.2(a), but indemnifiable Losses are recovered by a Buyer Indemnitee from the Indemnity Escrow Account pursuant to the third sentence of this Section 9.5(c) in respect of indemnifiable Losses pursuant to Section 6.10(a)(i) or Section 9.2(b) and the R&W Policy Retention is not eroded under the R&W Policy and a Buyer Indemnitee would (but for such R&W Policy Retention not being eroded under the R&W Policy) be entitled to indemnification under the R&W Policy, then such Buyer Indemnitee may berecover such Losses (and only such Losses) that would have been recoverable pursuant to the first sentence of this Section 9.5(c) if the R&W Policy Retention had been eroded, in an amount not to exceed the Value of the Indemnity Escrow Shares released from the Indemnity Escrow Account pursuant to the third sentence of this Section 9.5(c), directly from the Sellers jointly and severally and (ii) in the event that HYAC does not obtain and bind the R&W Policy at the Closing, to the extent that a Buyer Indemnitee would have (subject to the terms and conditions hereof) been entitled to indemnification from the Indemnity Escrow Account pursuant to Section 9.2(a), but indemnifiable Losses are recovered by a Buyer Indemnitee from the Indemnity Escrow Account pursuant to the third sentence of this Section 9.5(c) in respect of indemnifiable Losses pursuant to Section 6.10(a)(i) or Section 9.2(b), then such Buyer Indemnitee may recover such Losses (and only such Losses) that would have been recoverable pursuant to the first sentence of this Section 9.5(c) if such amount had not been released from the Indemnity Escrow Account, in an amount not to exceed the Value of the Indemnity Escrow Shares released from the Indemnity Escrow Account pursuant to the third sentence of this Section 9.5(c), directly from the Sellers jointly and severally.
(d) No Seller Indemnitee shall be entitled to be indemnified for Losses with respect to matters described in Section 9.3(a): (i) with respect to any De Minimis Claims (it being understood that (x) subject to clause (ii) of this Section 9.5(d) and the other limitations set forth herein, if such Losses exceed the Claim Threshold, the Seller Indemnitees shall be entitled to seek indemnification, subject to the Deductible, for the full amount of such Losses and (y) any De Minimis Claims shall be excluded in determining whether the Deductible has been exceeded) and (ii) until the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant to Section 9.3(a) exceeds the Indemnity Basket Deductible, and then only to the extent such Losses exceed the Deductible; provided, that Buyer’s maximum aggregate Liability for indemnifiable Losses pursuant to Section 9.3(a) will not exceed the Cap.
(as defined in e) The amount of any indemnifiable Losses pursuant to this Article 9 or Section 4.3(b)), following which the indemnifying Party 6.10(a) shall indemnify, defend and hold harmless be determined net of (i) any amounts actually recovered by the Buyer Indemnitees or the Seller Indemnitees, as applicable under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses (net of the reasonable, documented and out-of-pocket costs actually incurred in connection with recovering such amount, including, in the case may beof any insurance policy, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, any premiums paid as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount a result of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of recovering such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(bamount) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first Tax Benefit (1stas defined below) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited actually realized or received by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 Indemnified Party receiving such Table of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).Contents
Appears in 1 contract
Sources: Business Combination Agreement (Haymaker Acquisition Corp.)
Limitations on Indemnification. (a) Notwithstanding the other provisions of this Article XI, the amount by which an Indemnitor is or may be required to pay to an Indemnified Person in respect of losses for which indemnification is provided under this Article XI shall be reduced by (i) any amounts actually received (including amounts actually received under insurance policies) by the Indemnified Person from Third Parties in respect of such loss or (ii) any actual reduction in income Taxes payable by the Indemnified Person, solely as a result of the deductibility for income Tax purposes of such losses for which indemnification is provided under this Article XI, for the taxable year in which such deduction is claimed (assuming that all other available losses, deductions, loss carry forwards and other Tax attributes are utilized prior to such losses for which indemnification is provided under this Article XI) (such amounts are collectively referred to herein as "Indemnity Reduction Amounts"). If any Indemnified Person receives any Indemnity Reduction Amounts in respect of a claim for which indemnification is provided under this Agreement after the full or partial amount of such claim has been paid by an Indemnitor, then the Indemnified Person shall promptly remit to the Indemnitor an amount equal to the excess, if any, of (i) the amount theretofore paid by the Indemnitor in respect of such claim, less (ii) the amount of the indemnity payment that would have been due if such Indemnity Reduction Amounts in respect thereof had been received before the indemnity payment was made.
(b) Notwithstanding anything to the contrary in the organizational documents or other instruments of PIC or any of its Subsidiaries, no Shareholder shall have any right to indemnification or other recovery thereunder or otherwise (whether as an officer, director, shareholder or in any other provision capacity) from PIC or any of its Subsidiaries with respect to any matter to the extent that such the Principal Shareholder is liable, or would be liable but for the limitations on indemnification contained herein, to any of the Parent Indemnified Persons for indemnification under this Article XI with respect to such matter.
(c) EXCEPT WITH RESPECT TO AMOUNTS PAID OR PAYABLE BY AN INDEMNIFIED PERSON IN CONNECTION WITH THIRD-PARTY CLAIMS AND EXCEPT IN THE CASE OF FRAUD OR WILLFUL MISREPRESENTATION, AN INDEMNITOR SHALL NOT HAVE ANY LIABILITY TO ANY INDEMNIFIED PERSON FOR ANY LOSS OF PROFITS, SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), WHETHER OR NOT THE INDEMNITOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(d) Notwithstanding anything contained in this Agreement to the contrary, in the Parties' obligations pursuant case of fraud or willful misrepresentation, the limitations on indemnification (including as to duration and amount) contained in Sections 11.1(c), 11.1(d), 11.2(b), and 11.2(c) shall not apply to any claim for indemnification under this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated XI by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofIndemnified Person.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Stock Purchase Agreement (United National Group LTD)
Limitations on Indemnification. (ai) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required to indemnify, defend or hold harmless make any Buyer Indemnitee or Seller Indemnitee, indemnification payment pursuant to Section 13.2 for any Breach of any of its representations and warranties until such time as the case may be, until total amount of all Damages (including the aggregate amount Damages arising from such Breach and all other Damages arising from any other Breaches of any representations or warranties) that have been suffered or incurred by any one or more of the Buyer Indemnifiable Losses Indemnitees, or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following to which the indemnifying Party shall indemnify, defend and hold harmless any one or more of the Buyer Indemnitees has or have otherwise become subject, exceeds $50,000 in the aggregate, at which time such Indemnitees shall be entitled to be indemnified against only the amount of such Damages in excess of $50,000. Seller acknowledges and agrees that (a) the purchase of the Property pursuant to this Agreement is specifically conditioned upon and directly related to the purchase of the Club Assets pursuant to the Club Purchase Agreement and (b) Buyer is also the recipient of certain representations, warranties and indemnification from the Operator pursuant to the Club Purchase Agreement. Accordingly, whether the $50,000 threshold referenced in this Section 13.5(i) has been exceeded is to be calculated inclusive of any "Damages" that are suffered or incurred by any of the "Purchaser Indemnitees", as referenced in Section 5.5(a) of the Club Purchase Agreement.
(ii) Buyer shall not be required to make any indemnification payment pursuant to Section 13.3 for any Breach of any of its representations and warranties until such time as the total amount of all Damages (including the Damages arising from such Breach and all other Damages arising from any other Breaches of any representations or warranties) that have been suffered or incurred by any one or more of the Seller Indemnitees, as or to which any one or more of the case may beSeller Indemnitees has or have otherwise become subject, exceeds $50,000 in the aggregate, at which time such Indemnitees shall be entitled to be indemnified against only the amount of such Damages in excess of $50,000. Buyer acknowledges and agrees that (a) the purchase of the Property pursuant to this Agreement is specifically conditioned upon and directly related to the extent purchase of the Club Assets pursuant to the Club Purchase Agreement and (b) Operator is also the recipient of certain representations, warranties and indemnification 21 from Buyer pursuant to the Club Purchase Agreement. Accordingly, whether the $50,000 threshold referenced in this Section 13.5(ii) has been exceeded is to be calculated inclusive of any "Damages" that are suffered or incurred by any of the Buyer Indemnifiable Losses or the "Seller Indemnifiable LossesIndemnitees", as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined referenced in Section 4.3(b)); provided, however, that in determining whether 5.5(b) of the Seller's Club Purchase Agreement.
(iii) The obligations of the parties hereto to indemnify and DQE's liability for hold harmless a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either casePerson, pursuant to this Article IV is limited by Sections 13.2(i) and 13.3(i) above, shall terminate when the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, applicable representation and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, warranty terminates pursuant to Section 4.2(a)13.1(i) above; provided however, in such obligation to indemnify and hold harmless shall not terminate with respect to any matter about which case an Indemnitee shall have, before the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary expiration of the Closing Dateapplicable time period, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision delivered written notice alleging the existence of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 a Breach of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in such representations and warranties and asserting a claim for recovery under Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)13.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, indemnification provided for in Section 11.1 and at all times Section 11.2 shall be, be subject to the limitations set forth in this Section 4.3. The Parties following limitations:
(a) ▇▇▇▇▇▇ shall not be required liable to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, FFI Indemnitees for indemnification under Section 11.2(a) until the aggregate amount of all Losses sustained by the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, FFI Indemnitees under Section 11.2(a) exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to one percent (1.0%) of the Indemnity Cap Total Purchase Price then paid by FFI (as defined in Section 4.3(b)the “Deductible”); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss Deductible shall not apply to Losses that are due to or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice arise out of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) Fraud or willful and intentional misconduct by ▇▇▇▇▇▇, PHH Parent, or the term "Indemnity Basket" shall mean $250,000Company, and or (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary a breach of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary Fundamental Representations of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any PHH Parent (collectively, the “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 Integrated Assets Total Purchase Price then paid by FFI (the “Cap”); provided, however, that the Cap shall not apply to Losses that are due to or Integrated Liabilities), (iv) indemnity obligations arise out of the Parties Nikola Excluded Matters.
(b) FFI shall not be liable to the Company Indemnitees for indemnification under Section 11.1(a) until the aggregate amount of 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 Cap; provided, however, that the Cap shall not apply to Losses that are due to or arise out of the FFI Excluded Matters.
(c) Nothing herein shall be deemed to affect an Indemnified Person’s obligation to use commercially reasonable efforts to mitigate 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 Taxessuch Losses under applicable insurance policies or from any other third party alleged to be responsible therefor; provided, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE that no Indemnified Person shall be required to pursue available insurance or other claims in respect of certain litigation as set forth in Section 4.6any Losses for which indemnification or payment is sought under this Article XI. If the Indemnified Person actually recovers any amounts under applicable insurance policies, (vi) indemnity obligations or from any other third party alleged to be responsible for any Losses, subsequent to an indemnification payment by the Indemnifying Person, then the Indemnified Person receiving such payment shall promptly reimburse the Indemnifying Person for any portion of such indemnification payment which would not have been payable pursuant to the operation of the Seller immediately preceding sentence had such payment been made after the Indemnified Person had recovered such other amount, net of any expenses reasonably incurred by such Indemnified Person in collecting such amount (including any deductible amounts, attorney’s fees, and DQE any increased insurance premiums). If the Indemnified Person receives payment from an Indemnifying Person in respect of Environmental Law, as set forth in Section 4.7, any Losses that fully compensates for such Loss and (vii) any fraud committed by DQEthe 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 SellerIndemnified 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, the Company lost profits, lost opportunity, or any Company Subsidiary (provided that the foregoing reference to the Company lost revenue, or any Company Subsidiary refers to fraud committed prior to the Closing Date); damages based on a multiple, or for Losses which are exemplary, except, in additioneach case, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations to the extent any such Losses are for the reasonably foreseeable result of the Parties in respect applicable breach of Taxes, as set forth in Section 4.5this Agreement, (ii) any breach in the case of Fraud or violation of any Environmental Law by PSCwillful and intentional misconduct, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) to the extent an Indemnified Person pays to a Third Party any fraud committed such Losses that are awarded to such Third Party, in each of which case such Losses shall be recoverable by PSC, Acquisition, any Buyer Subsidiary designated by PSC 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 1.111.6(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 indemnification included in Section 11.2(d) without such dollar limitation, then the Company Indemnified Person may seek recovery under the provision that is not time barred or not subject to limitation) but in no event will an Indemnified Person be entitled to double recovery in respect of any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)particular Losses.
Appears in 1 contract
Sources: Membership Interest and Asset Purchase Agreement (Nikola Corp)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained in this Agreement, the Parties' obligations pursuant of an Indemnifying Party to this Article IV areindemnify an Indemnified Party and the Indemnified Party’s right to collect Damages under any theory of law or equity, and at all times shall be, be subject to the limitations set forth below:
(a) No claim for indemnification by a Purchaser Indemnified Party may be asserted against Seller pursuant to Section 13.2(a), and Seller shall have no obligation for Damages to the Purchaser Indemnified Party after the expiration of the survival period related to such representation and warranty, unless the Purchaser Indemnified Party has notified Seller of such Claim prior to such expiration, and the notice specifies in this Section 4.3. The Parties reasonable detail the nature of the Claim.
(b) Seller shall not be required obligated to indemnify, defend or hold harmless indemnify a Purchaser Indemnified Party for any Buyer Indemnitee or Seller Indemnitee, as the case may be, Damages with respect to any Claim pursuant to Section 13.2(a) until the aggregate amount of the Buyer Indemnifiable Losses such Damages suffered or Seller Indemnifiable Losses, as the case may be, incurred by a Purchaser Indemnified Party exceeds the Indemnity Basket Twenty-Five Thousand Dollars (as defined in Section 4.3(b)$25,000.00), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, such Damages exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap Twenty-Five Thousand Dollars (as defined in Section 4.3(b)$25,000.00); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" foregoing limitation shall mean $250,000be computed without regard to any qualification or exception contained in such representation or warranty relating to materiality or Material Adverse Effect, and (ii) the term "Indemnity Cap" foregoing limitation shall mean not apply to Claims with respect to the representations and warranties contained in Sections 4.1, 4.2 and 4.4. Purchaser or New Operator shall not be obligated to indemnify a Seller Indemnified Party for any Damages with respect to any Claim pursuant to Section 13.3(a) until the aggregate amount of such Damages suffered or incurred by a Seller Indemnified Party exceeds Twenty-Five Thousand Dollars ($15,000,00025,000.00), and only to the extent that such Damages exceed Twenty-Five Thousand Dollars ($25,000.00); provided, however, that on (i) the first foregoing limitation shall be computed without regard to any qualification or exception contained in such representation or warranty relating to materiality or material adverse effect, and (1stii) anniversary the foregoing limitations shall not apply to Claims with respect to the representations and warranties contained in Sections 5.1, 5.2 and 5.3.
(c) Except in cases of intentional or reckless fraud or willful misconduct or Claims with respect to the Closing Daterepresentations and warranties contained in Sections 4.1, 4.2 and 4.4, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary aggregate liability of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Seller for Damages under this Agreement with respect to any Claim pursuant to Section 4.2(a)13.2(a) shall in no event exceed the Purchase Price. Except in cases of intentional or reckless fraud or willful misconduct or Claims with respect to the representations and warranties contained in Sections 5.1, in which case 5.2 and 5.3, the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary aggregate liability of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of Purchaser or New Operator for Damages under this Agreement with respect to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses any Claim pursuant to Section 13.3(a) shall in no event exceed $1,000,000.
(d) Seller shall not be limited by required to indemnify or pay Purchaser or New Operator for that part of any Damages that are actually recovered under any policy of insurance, including the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigationTitle Policy; provided, existing or threatenedhowever, that is required nothing herein shall be construed to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) obligate any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than Purchaser Indemnified Party to proceed against any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed insurance policy prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)asserting an indemnification claim against Seller.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any Metals, Purchaser and the other provision of this Agreement to the contrary, the Parties' obligations persons or entities indemnified pursuant to this Article IV areSection shall not assert any claim for indemnification hereunder against the Company until such time as, and at all times shall be, subject solely to the limitations set forth in this Section 4.3extent that, the aggregate of all claims which such persons may have against the Company shall exceed $75,000 (the "Indemnification Threshold"). The Parties Company shall not be required to indemnifyassert any claim for indemnification hereunder against Metals or Purchaser until such time as, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only solely to the extent that the Buyer Indemnifiable Losses aggregate of all claims which the Company may have against Metals or the Seller Indemnifiable Losses, as the case may be, Purchaser shall exceed the Indemnity BasketIndemnification Threshold. In addition, the SellerThe Company's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's aggregate liability for Seller Indemnifiable Losses, indemnification for breaches of representations or warranties contained in either case, as contemplated by this Article IV Agreement shall under no circumstances exceed $750,000. A portion of the Purchase Price equal to $750,000 (the "Escrowed Funds") shall be placed into an escrow account and held and disbursed in no event exceed accordance with the terms of an aggregate Escrow Agreement in the form of Annex V hereto. The amount of dollars equal any Damages incurred by Purchaser hereunder shall be disbursed to Purchaser from the Escrowed Funds in accordance with the terms of such Escrow Agreement. No person shall be entitled to indemnification under this Section if and to the Indemnity Cap (as defined in Section 4.3(b)); providedextent that such person's claim for indemnification is directly or indirectly caused by a breach by such person of any representation, howeverwarranty, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss covenant or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used other agreement set forth in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap . The indemnification provided for herein shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), exclusive remedy in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any action seeking damages or any other provision form of monetary relief brought by any party to this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) against any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)party hereto.
Appears in 1 contract
Limitations on Indemnification. The rights to indemnification hereunder are subject to the following limitations:
(a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Purchaser Indemnified Parties shall not be required entitled to indemnify, defend or hold harmless indemnification hereunder with respect to any Buyer Indemnitee or Seller Indemnitee, as the case may be, until of Purchaser's Indemnified Claims unless the aggregate amount of Purchaser's Losses with respect to Purchaser's Indemnified Claims exceeds $150,000, in which event the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined indemnity provided for in Section 4.3(b)), following which the indemnifying Party 7.2(a) shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, apply only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, Purchaser's Losses that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of exceeds such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereoflimitation.
(b) As used in this Agreement, (i) the term "Indemnity Basket" Seller Indemnified Parties shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary not be entitled to \ indemnification hereunder with respect to any of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, Sellers' Indemnified Claims unless the Indemnity Period has been extended until the third (3rd) anniversary aggregate amount of the Closing Date, pursuant Sellers' Losses with respect to Section 4.2(a)Sellers' Indemnified Claims exceeds $150,000, in which case event the Indemnity Cap indemnity provided for in Section 7.2(b) shall continue apply only to mean $7,500,000 until the third aggregate amount of Sellers' Losses that exceeds such limitation.
(3rdc) anniversary Notwithstanding anything to the contrary contained herein, none of the Closing Date, upon which it Sellers shall be reduced to, and shall thereafter mean, zero. Notwithstanding responsible for the payment of Purchaser's Losses pursuant to this Article VII in excess of the amount of the proceeds of the Purchase Price actually received by any other provision of this Agreement such Seller hereunder; notwithstanding anything to the contrarycontrary contained herein, the Seller's and DQE's liability neither Purchaser nor Purchaser Parent shall be responsible for the following Buyer Indemnifiable payment of Sellers' Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating pursuant to (i) any litigation, existing or threatened, that is required to be set forth this Article VII in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 excess of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations amount of the Seller or the Subsidiaries proceeds of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed Purchase Price actually received by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Sellers hereunder.
Appears in 1 contract
Sources: Stock Purchase Agreement (Palo Alto Acquisition CORP)
Limitations on Indemnification. (a) Notwithstanding From and after the Closing, the right to obtain indemnification from the Indemnity Escrow Amount of the Escrow Fund pursuant to the indemnification provisions of Section 9.3 shall be the Parent Indemnitees’ sole and exclusive remedy for monetary damages, except with respect to indemnification for the matters set forth in Sections 9.3(b)-(f), Section 9.3(i) (to the extent that the Third Party Claim relates to an alleged breach of Section 3.4 (Capitalization) or Section 3.12 (Tax Matters)), and Section 9.3(j) (collectively, the “Specified Claims”). With respect to indemnification for the Company Sales Tax Liability, the Parent Indemnitees shall first seek reimbursement from the Tax Escrow Amount within the Escrow Fund prior to seeking reimbursement from the Indemnity Escrow Amount within the Escrow Fund. Furthermore, in the case of a Specified Claim, each Indemnifying Holder shall be severally (and not jointly) liable for such Indemnifying Holder’s proportionate share of the amount of any Losses resulting therefrom; provided, however, that, the maximum liability of any Indemnifying Holder under Section 9.3 with respect to Specified Claims (other than as set forth in Section 9.4(b) with respect to fraud or intentional misrepresentation) shall not exceed an aggregate amount equal to that portion of the Aggregate Merger Consideration such Indemnifying Holder actually received under this Agreement, together with such Indemnifying Holder’s Per Share Escrow Contribution. Without limiting the generality of the foregoing, nothing contained in this Agreement shall limit the rights of the Parent Indemnitees to seek or obtain injunctive relief or any other provision equitable remedy to which such Parent Indemnitee is otherwise entitled. Without limiting the effect of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations any other limitation set forth in this Article IX, no claim may be made by any Parent Indemnitee for indemnification under Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, 9.3(a) unless and until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following for which the indemnifying Party Parent Indemnities seek to be indemnified pursuant to Section 9.3(a) exceeds Eight Hundred Sixty Thousand Dollars ($860,000) (the “Basket Amount”) in the aggregate, after which the Parent Indemnitees shall indemnify, defend be entitled to indemnification for all such Losses and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent not just Losses that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofBasket Amount.
(b) As used Notwithstanding anything to the contrary in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing DateSection 9.4, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses limitations set forth above shall not be limited by the Indemnity Cap: Buyer Indemnifiable apply with respect to any claim against an Indemnifying Holder for Losses for or arising out of or relating to (i) any litigation, existing such Indemnifying Holder’s commission of fraud or threatened, that is required misrepresentation with the intent to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)deceive.
Appears in 1 contract
Sources: Sale and Purchase of Shares Agreement (Nice Systems LTD)
Limitations on Indemnification. (a) Notwithstanding The Buyer Indemnitees shall not be entitled to recover indemnifiable Losses under Section 8.2(a)(i) (other than in connection with any breach of the Seller Fundamental Representations or claims based upon Fraud by Sellers) unless the aggregate Losses for all such breaches exceed $1,037,250 (the “Deductible”) (following which the Buyer Indemnitees shall be entitled to indemnification for any Losses in excess of the Deductible, subject to Section 8.4(b) and the other provision terms and provisions of this Agreement ARTICLE VIII). The Seller Indemnitees shall not be entitled to recover indemnifiable Losses under Section 8.2(b)(i) (other than in connection with any breach of the Buyer Fundamental Representations or claims based upon Fraud by ▇▇▇▇▇) unless the aggregate Losses for all such breaches exceed the Deductible (following which the Seller Indemnitees shall be entitled to recover indemnification for any Losses in excess of the Deductible, subject to Section 8.4(c) and the other terms and provisions of this ARTICLE VIII).
(b) The Buyer Indemnitees shall not be entitled to recover indemnifiable Losses under Section 8.2(a)(i) (other than in connection with any breach of the Seller Fundamental Representations or claims based upon Fraud by Sellers) to the extent that such Losses exceed $1,037,250 (the “Seller Non-Fundamental Reps Cap”).
(c) The Seller Indemnitees shall not be entitled to recover indemnifiable Losses under Section 8.2(b)(i) (other than in connection with any breach of the Buyer Fundamental Representations or claims based upon Fraud by Buyer) to the extent that such Losses exceed $25,000,000.
(d) Notwithstanding anything contained herein to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times indemnifiable Losses shall be, subject not include any Losses to the limitations set forth extent actually taken into account in connection with the determination of the Final Net Working Capital Amount and/or the Final Acquired Entity Indebtedness.
(e) All indemnifiable Losses shall be determined without duplication of recovery under other provisions of this Agreement.
(f) In no event shall the Sellers (as a group) have aggregate indemnification liability under Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until 8.2(a) in excess of the aggregate amount of net proceeds actually received by Sellers in respect of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Purchase Price (the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity “Total Cap (as defined in Section 4.3(b)Amount”); provided, however, that the foregoing limitation will not apply in determining whether connection with any claims based upon Fraud committed by Sellers. In no event shall the Seller's and DQE's Buyer have indemnification liability for a particular Buyer Indemnifiable Loss or under Section 8.2(b) in excess of the Buyer's liability for a particular Seller Indemnifiable LossTotal Cap Amount; provided, in either casehowever, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated foregoing limitation will not apply in connection with any claims based upon Fraud committed by Section 4.4 hereof▇▇▇▇▇.
(bg) As used Notwithstanding anything to the contrary contained in this Agreement, for purposes of determining whether there has been a breach and the amount of any Losses that are the subject matter of a claim for indemnification hereunder, each representation and warranty in this Agreement will be read without regard and without giving effect to the term “material” or “Business Material Adverse Effect” or similar phrases contained in such representation or warranty the inclusion of which has the effect of making such representation or warranty less restrictive (as if such word, for such purposes, were deleted from such representation and warranty); provided, however, that the foregoing shall not apply with respect to (i) the any materiality qualifier that is included in a defined term "Indemnity Basket" shall mean $250,000(e.g., Material Contracts and Material Permits), and (ii) the term "Indemnity Cap" representation or warranty contained in clause (x) of Section 3.7.
(h) No Party shall mean $15,000,000have any right to offset in connection with any payment due pursuant to Section 5.8 or this ARTICLE VIII; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap a Party shall be reduced toentitled to exercise a right of offset pursuant to Section 5.8 or this ARTICLE VIII, as applicable: (i) as provided in any written agreement between Buyer and Sellers providing for such right of offset, or (ii) to the extent that a Party is owed an amount from such other Party pursuant to a Final Judgment.
(i) The Buyer Indemnitees shall thereafter mean, $7,500,000; and provided further, that on the second (2ndnot be entitled to recover indemnifiable Losses under Section 8.2(a)(viii) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zerothis Agreement, unless the Indemnity Period has been extended until aggregate Losses under Section 8.2(a)(viii) exceed $500,000 (the third “Section 8.2(a)(viii) Deductible”) (3rdfollowing which the Buyer Indemnitees shall be entitled to indemnification under Section 8.2(a)(viii) anniversary for any Losses in excess of the Closing DateSection 8.2(a)(viii) Deductible, pursuant subject to the other terms and provisions of this ARTICLE VIII, including the sentence below in this Section 4.2(a8.4(i)). In addition, in which case the Indemnity Cap Buyer Indemnitees shall continue not be entitled to mean $7,500,000 until the third (3rdrecover indemnifiable Losses under Section 8.2(a)(viii) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement for any claim or series of related claims unless the aggregate amount of Losses for such claim or series of related claims under Section 8.2(a)(viii) exceed $25,000 (at which point the Buyer Indemnitees shall be entitled to indemnification against all such Losses under Section 8.2(a)(viii) with respect to such claim or series of related claims (but subject to the contraryother terms and provisions of this ARTICLE VIII, including the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth sentence above in Sections 3.7, 3.8(athis Section 8.4(i), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
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Limitations on Indemnification. The rights of an Indemnified Party to indemnification under this Article VIII are subject to the following limitations:
(a) An Indemnified Party shall not be entitled to indemnification hereunder with respect to an Indemnifiable Claim arising out of a Misrepresentation, other than an intentional or fraudulent Misrepresentation or a Misrepresentation arising under Sections 4.2, 4.10, 4.15, 4.21 and 4.28 (the “Core Representations”) (or, if more than one such Indemnifiable Claim is asserted, with respect to all such Indemnifiable Claims), unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims when added to the Indemnified Claims under the MHM Purchase Agreement exceeds $250,000 (the “Threshold Amount”), in which event such Indemnified Party shall be entitled to indemnification hereunder for Damages [**] denotes confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. with respect to the first dollar of such Damages and not just the amount that exceeds the Threshold Amount. Notwithstanding any other the foregoing, this provision of shall not apply to Misrepresentations arising under representations and warranties which are qualified by references to materiality, in all material respects or by matters having or not having a Material Adverse Effect.
(b) Notwithstanding anything contained in this Agreement to the contrary, (i) the Parties' obligations pursuant to this Article IV are, and at all times shall bemaximum aggregate liability of the Sellers, subject to subsection (ii) below, for claims for indemnification arising out of any and all Seller Misrepresentations, including the limitations Seller Misrepresentations as defined in the MHM Purchase Agreement (other than intentional or fraudulent Seller Misrepresentations or any Misrepresentation under any of the Core Representations for which this provision shall not apply) shall not exceed $25,000,000 (the “Cap”), (ii) the maximum aggregate liability of the Sellers for claims for indemnification arising out of any and all Seller Misrepresentations arising under Section 4.28 (other than intentional or fraudulent Seller Misrepresentations for which this provision shall not apply) shall not exceed $10,000,000; and (iii) the maximum aggregate liability of Buyer, CBIZ and the other Affiliated Companies for claims for indemnification arising out of any and all CBIZ Misrepresentations (other than intentional or fraudulent CBIZ Misrepresentations or a Misrepresentation under Section 3.2 for which this provision shall not apply) shall not exceed the Cap.
(c) Notwithstanding anything contained in this Agreement to the contrary, a CBIZ Indemnified Party shall not be entitled to indemnification hereunder with respect to a CBIZ Indemnifiable Claim arising out of any inaccuracy in or any breach or nonfulfillment of any of the representations or warranties set forth in this Section 4.3. The Parties shall 4.20 unless Buyer has not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as received aggregate Cash Collections of at least the case may be, until the aggregate amount of the Buyer Cash Collections Threshold by the date the Second Anniversary Payment is due to be paid.
(d) The obligation of indemnity relating to any Misrepresentation shall terminate eighteen (18) months following the Effective Date (other than obligations of indemnity for Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following Claims for which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only notice has been given prior to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)such termination); provided, however, that in determining whether the Seller's and DQE's liability obligation of indemnity for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Lossany Misrepresentations under Sections 3.1, in either case3.2, pursuant to this Article IV is limited by the Indemnity Cap4.1, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee4.2, as the case may be4.4, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss4.5, as the case may be4.10, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,0004.15, and 4.18 shall survive until ninety (ii90) days after the term "Indemnity Cap" shall mean $15,000,000expiration of the applicable statute of limitations; provided, however, further that on the first (1st) anniversary obligation of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses indemnity relating to (i) a any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (basis other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses a Misrepresentation shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)survive indefinitely.
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Sources: Purchase Agreement (CBIZ, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) Notwithstanding The Sellers shall not be obligated to pay any indemnification amounts for Losses pursuant to Section 8.1(i) until the aggregate amount of all Losses pursuant thereto exceeds an amount equal to $3,000,000 (the "Basket"), whereupon the Company Indemnified Parties shall be entitled to indemnification under Section 8.1(i) for all such Losses in excess of such amount, up to a maximum amount equal to $50,000,000, subject to paragraph (d) below. In addition, no claim shall be made for Losses with respect to any breach of a representation or warranty under Section 8.1(i) unless the claim for Losses with respect to such breach reasonably could be expected to exceed $50,000; provided, however, that any breaches arising out of a series of related events or the same set of operative facts shall be treated as a single claim for purposes of this paragraph (a).
(b) No claims for indemnification in respect of Sections 8.1(i) or 8.2(i) shall be made after the date on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.7; provided that the expiration of any representation or warranty under Section 8.7 shall not affect any claim made pursuant to a Claims Notice delivered prior to the date of such expiration.
(c) The limitations on the indemnification obligations set forth in this Section 8.5 shall not apply to any covenants of the Sellers (or any other provision of party) in this Agreement (including covenants in Article II and Article III, except to the contraryextent that any representations or warranties are contained within such covenants). In addition, notwithstanding the provisions of paragraph (a) above, the Parties' limitations on the indemnification obligations of Sellers set forth in paragraph (a) above shall not apply to breaches of the representations and warranties made in Sections 2.1 (other than the second sentence of Section 2.1(a)), 2.2 (other than in Section 2.2(b) with respect to the qualification or licensing of the Subsidiaries as foreign corporations), 2.3, 3.1 and 3.2.
(d) Notwithstanding anything to the contrary set forth herein, no limitation or condition of liability or indemnity applicable to any Seller shall apply to any breach of a representation or warranty if such representation or warranty was made with actual knowledge by such Seller that it (i) contained an untrue statement of a material fact or (ii) omitted to state a material fact necessary to make the statements contained therein not misleading. For purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by any Seller, the references to "Material Adverse Effect" or "Material Adverse Change" or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(e) The Company Indemnified Parties may seek recovery against any Seller for any Loss for which the Sellers are jointly and severally liable hereunder, except that (i) in any action (including any arbitration pursuant to this Article IV areSection 10.9) to recover such Loss, the appropriate Company Indemnified Parties may not proceed against any Seller unless (subject to jurisdictional, venue or other procedural limitations) it also proceeds against each of the ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇ Trust, the NCCF, ▇▇▇▇ ▇▇▇▇▇▇, J&J Investments, LLC, the Repchinuck Revocable Trust, C. ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇; (ii) the Servants' Trust shall not be liable for any portion of the Pro Rata Share of the ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇ Trust, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Family Trust, the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Family Trust, the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Family Trust or ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ of such Loss, and at all times J&J Investments, LLC shall benot be liable for any portion of the Pro Rata Share of ▇▇▇▇ ▇▇▇▇▇▇ of such Loss; (iii) the Management Stockholders, ▇▇▇▇▇ ▇. ▇▇▇▇, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust, as a group shall not be liable for more than their aggregate Pro Rata Share of such Loss; (iv) B-R Investors/Penhall I, L.P. shall not be liable for more than its Pro Rata Share of such Loss; (v) the liability of each Management Stockholder (other than ▇▇▇▇ ▇▇▇▇▇▇, J&J Investments, LLC, the Repchinuck Revocable Trust, C. ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇) shall be limited to his or its Eligible Assets (as defined in Section 8.5(g)); and (vi) no Non-Defaulting Seller (as defined in Section 8.5 (f)) who is a Non-Management Stockholder, and none of ▇▇▇▇ ▇▇▇▇▇▇, J&J Investments, LLC, the Repchinuck Revocable Trust, C. ▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇, shall be liable for any Management Stockholder's Pro Rata Share of such Loss until the appropriate Company Indemnified Parties have attempted in good faith, through appropriate judicial or other proceedings, to recover indemnification payments from such Management Stockholder under Section 8.1 for the full amount of such Management Stockholder's Eligible Assets.
(f) The Sellers agree among themselves that each Seller shall pay such Seller's Pro Rata Share of any Loss, other than a Loss arising out of a breach of a representation or warranty by another Seller under Article III or a breach of a covenant by another Seller for which the breaching Seller is solely liable hereunder; provided, however, subject to the limitations set forth in this of Section 4.3. The Parties 8.5(e), if any Seller (a "Defaulting Seller") fails to pay any or all of his or its Pro Rata Share of such Loss, each remaining Seller (a "Non-Defaulting Seller") shall not be required also pay a fraction of the shortfall of such Loss equal to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until such Non-Defaulting Seller's Pro Rata Share divided by the aggregate amount Pro Rata Share of the Buyer Indemnifiable Losses or all Non-Defaulting Sellers. Each Defaulting Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or Non-Defaulting Sellers from any Losses incurred by the Non- Defaulting Sellers that are caused by the failure of such Defaulting Seller Indemnitees, as the case may be, only to pay such Defaulting Seller's Pro Rata Share of any Losses to the extent that the Buyer Indemnifiable Losses required herein. Each Seller acknowledges it is his or the Seller Indemnifiable Lossesits intent, as a material part of the case may beconsideration for the execution of this Agreement, exceed the Indemnity Basket. In addition, the that each Seller shall be liable to pay such Seller's and DQE's liabilityPro Rata Share of any Losses to the extent provided herein. At the Closing, taken togethereach Management Stockholder shall grant a security interest in the shares of the Surviving Corporation stock received as Merger Consideration, for Buyer Indemnifiable Losses and the Buyerproceeds thereof, to the Surviving Corporation in respect of such Management Stockholder's liability for Seller Indemnifiable Losses, in either case, as contemplated by obligations under this Article IV shall in no event exceed an aggregate amount of dollars equal VIII by executing a pledge agreement containing terms and conditions reasonably satisfactory to the Indemnity Cap Surviving Corporation (as defined including without limitation the full subordination of such pledge to the Surviving Corporation's rights under the Securities Holders Agreement) (the "Pledge Agreement").
(g) Each Management Stockholder may, at his or its option, satisfy any indemnification obligation under Section 8.1 by payment of cash or by delivery to the Surviving Corporation of shares of stock of the Surviving Corporation, which shares shall have a Current Market Value determined in accordance with Section 4.3(b)8.5(h); provided, however, that in determining whether if any Management Stockholder elects to satisfy such indemnification obligation by payment of cash, such Management Stockholder must make such election irrevocably by written notice to the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or Surviving Corporation before the Buyer's liability for a particular Seller Indemnifiable Losscommencement of any determination of Fair Market Value under Section 8.5(h), in either case, of which commencement the Surviving Corporation will give ten (10) days prior notice. Other than pursuant to this Article IV is limited by the Indemnity CapSecurities Holders Agreement, the Parties shall refer but subject to the Indemnity Cap that is terms of the Pledge Agreement, no cash shall be paid to a Management Stockholder upon the occurrence of any event requiring the redemption from such Management Stockholder of shares of Surviving Corporation stock received as Merger Consideration, and, other than pursuant to the Securities Holders Agreement, but subject to the terms of the Pledge Agreement, no Management Stockholder shall otherwise be permitted to transfer any shares of Surviving Corporation stock received as Merger Consideration or was receive cash or other property in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice respect of such Buyer Indemnifiable Loss or Seller Indemnifiable Lossshares, as the case may be, unless such Management Stockholder first provides security reasonably satisfactory to BRS and the Seller as contemplated by Section 4.4 hereof.
(b) As used Representative for such Management Stockholder's indemnification obligations under this Agreement in the full amount of his or its Eligible Assets. For purposes of this Agreement, a Management Stockholder's "Eligible Assets" shall include (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary all shares of stock of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited Surviving Corporation received by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedulesuch Management Stockholder as Merger Consideration, (ii) Excluded Assetsall cash and other property received by such Management Stockholder in connection with any transfer or redemption of such shares, and (iii) any all cash and all liabilities and obligations other property (including other securities of the Seller Surviving Corporation or the Subsidiaries of the Seller (any other than any liabilities or obligations of the Seller (entity) received by such Management Stockholder in respect of such shares, whether by way of dividend, merger, reorganization, recapitalization, or otherwise.
(h) For purposes of this Agreement, "Current Market Price" on any date shall mean, with respect to any security, if such security is publicly traded in the Company)United States, Utilitythe average of the daily Closing Prices for the ten (10) consecutive trading days ending on the date immediately prior to the date as of which the Current Market Price is to be determined, Developmentor, if such day is not a trading date, the trading day immediately preceding such date. The "Closing Price" for each day shall be the average of the closing bid and asked price for such security on the NASDAQ National Market System, or, if not then traded thereon, the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked price regular way on the principal stock exchange on which such security is then listed or traded, or, if not then listed or traded on any such exchange, the mean of the closing bid and asked prices on an automated quotation system as furnished by any New York Stock Exchange member firm selected from time to time by the Surviving Corporation for that purpose. Except as set forth in the preceding sentence, with respect to any security that is not publicly traded in the United States, "Current Market Price" on any date shall mean the fair market value of such security on such date as determined by mutual agreement of BRS, ▇▇▇▇ ▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of and the Seller Representative, or, if they are unable to agree, by an independent appraiser selected by the Surviving Corporation and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of reasonably acceptable to ▇▇▇▇ ▇▇▇▇▇▇ and the Seller and DQE in respect Representative. The costs of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses such appraiser shall not be limited paid by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Surviving Corporation.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding The amount of any other provision Losses for which indemnification is provided under SECTION 9.1(A) or 9.2 shall be computed net of this Agreement to any third party insurance proceeds received by, or payable to, an Indemnified Party in connection with such Losses (net of any expenses incurred by the contrary, Indemnified Party in obtaining such insurance proceeds including the Parties' obligations cost of maintaining any insurance policy). The parties agree that any indemnification payments made pursuant to this Article IV areAgreement shall be treated for tax purposes as an adjustment to the Purchase Price, unless otherwise required by Law.
(b) Sellers shall use all commercially reasonable efforts to maintain and to assign to Buyer any third-party indemnities, settlements or cost sharing agreements available or potentially available to Buyer.
(c) Notwithstanding anything to the contrary contained in this ARTICLE IX, any indemnification obligations of the Sellers to the Buyer Indemnified Persons that are subject to the Maximum Amount shall be first drawn from the funds subject to the Escrow Agreement. Thereafter, the Sellers will be severally, and at not jointly, liable for all times shall beindemnification obligations to the Buyer Indemnified Persons pursuant to this Agreement, subject to the limitations set forth contained herein. Any indemnification obligations of the Sellers to the Buyer Indemnified Persons not subject to the Maximum Amount may be drawn from the funds subject to the Escrow Agreement or may be sought from the Sellers in the sole discretion of Buyer. In each case, the Buyer may offset the indemnification obligations of such Seller under this Section 4.3ARTICLE IX against any amounts due or to become due to such Seller under this Agreement. The Parties parties agree that no Seller Indemnified Persons shall not be required to indemnifyhave any rights of contribution or indemnity, defend or hold harmless any Buyer Indemnitee other right, remedy or Seller Indemniteerecourse, as against the case may beCompany in connection with any indemnification obligation or other Liability arising under or in connection with, until the aggregate amount or related to, this Agreement or any Transaction Agreement, or any of the Buyer Indemnifiable Losses transactions contemplated hereby or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basketthereby. In addition, the Each Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV indemnification shall in no event exceed an aggregate amount of dollars equal be limited to the Indemnity Cap product of: (x) the aggregate Losses of Buyer resulting from such claims times (y)
(a) the Purchase Price (as defined in Section 4.3(b)adjusted pursuant to SECTION 2.6) received by such Seller divided by (b) the aggregate Purchase Price (as adjusted pursuant to SECTION 2.6); provided, howeverprovided further, that in determining whether the no instance shall any Seller be liable, after taking into consideration all amounts paid by such Seller pursuant to this ARTICLE IX, for any amount in excess of such Seller's and DQEportion of the Purchase Price (as adjusted pursuant to SECTION 2.6); provided further, that with respect to claims subject to the Maximum Amount, no Seller's liability for a particular Buyer Indemnifiable Loss or indemnification under this ARTICLE IX shall exceed the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by product of the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
following: (bx) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and 20,000,000 minus (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on total amount paid to Buyer from the first funds subject to the Escrow Agreement times (1sty) anniversary of (a) the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second Purchase Price (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, as adjusted pursuant to Section 4.2(a), in which case SECTION 2.6) received by such Seller divided by (b) the Indemnity Cap shall continue to mean $7,500,000 until the third aggregate Purchase Price (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC adjusted pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing DateSECTION 2.6).
Appears in 1 contract
Limitations on Indemnification. Notwithstanding the foregoing provisions of Section 11.1, (a) Notwithstanding Seller shall not be required to indemnify Buyer or any Buyer-Related Entities under this Agreement unless the aggregate of all amounts for which an indemnity would otherwise be payable by Seller under Section 11.1 above exceeds the Basket Limitation and, in such event Seller shall be responsible for only the amount in excess of the Basket Limitation, (b) in no event shall the liability of Seller with respect to the indemnification provided for in Section 11.1 above exceed in the aggregate the Cap Limitation, (c) if prior to the Closing, Buyer obtains knowledge of any inaccuracy or breach of any representation, warranty or covenant of Seller contained in this Agreement (a “Buyer Waived Breach”) and nonetheless proceeds with and consummates the Closing, then Buyer and any Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article XI for, or any other provision claim or cause of action under this Agreement Agreement, at law or in equity on account of any such Buyer Waived Breach, and (d) notwithstanding anything herein to the contrary, the Parties' obligations pursuant Basket Limitation and the Cap Limitation shall not apply with respect to this Article IV are, and at all times shall be, subject to the limitations Losses suffered or incurred as a result of breaches of any covenant or agreement of Seller set forth in Section 3.5, Section 3.6, Article X or Section 14.2 of this Section 4.3Agreement. The Parties After the Closing, Buyer shall not be required entitled to indemnify, defend any offsets or hold harmless deductions against any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or owing under the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses Note for Seller’s obligations under Section 11.1 above or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used elsewhere in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)otherwise.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Wells Real Estate Investment Trust Inc)
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement:
(a) Notwithstanding any other provision of this Agreement to The Securityholders shall have no Indemnification Obligations and the contrary, Buyer Indemnified Parties shall have no recourse against the Parties' obligations Escrow Fund for a claim pursuant to this Article IV areSection 10.2(a) or Section 10.3(a) until such time as the total amount of all Losses in respect of all claims exceed $330,000 (the “Deductible”) in the aggregate, and at all times shall bethen only in respect of such excess; provided, subject to however, that the limitations set forth in this Section 4.3. The Parties 10.6(a) shall not apply to claims under Section 10.2(a) and Section 10.3(a) in respect of any breach or inaccuracy of a Fundamental Representation.
(b) Recourse by the Buyer Indemnified Parties against the proceeds then remaining in the Escrow Fund shall be required to indemnify, defend or hold harmless any the Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount Indemnified Parties’ sole and exclusive remedy in respect of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Securityholders’ Indemnification Obligations for the case may be, exceeds the Indemnity Basket (as defined matters referred to in Section 4.3(b)10.2(a), following which the indemnifying Party shall indemnify, defend Section 10.2(g) and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)10.2(i); provided, however, that the limitation contained in determining whether this sentence shall not apply to claims under Section 10.2(a) in respect of any breach or inaccuracy of a Fundamental Representation.
(c) To the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date extent that the Buyer Indemnitee or Seller Indemnitee, as Indemnified Parties are entitled to recovery under Section 10.2(a) in excess of proceeds then remaining in the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this AgreementEscrow Fund, (i) the term "Indemnity Basket" Buyer Indemnified Parties shall mean $250,000, not be entitled to recover amounts directly from the Securityholders under this Article X in respect of the Indemnification Obligations of the Securityholders until such time as the Escrow Fund has been fully exhausted and (ii) for each such Loss a Securityholder shall only be liable for its Transaction Percentage of such Loss. In no event shall the term "Indemnity Cap" aggregate Indemnification Obligations of a Securityholder exceed the portion of the Transaction Consideration actually paid to such Securityholder (with respect to the Initial Stock Sale, the Merger, or both, as applicable and without any reduction for Taxes payable by such Securityholder in respect of the Transaction Consideration), except solely in the case of fraud committed by such Selling Securityholder. No Securityholder is liable for breach of a representation, warranty or covenant of any other Securityholder.
(d) Each Indemnified Party acknowledges and agrees that, for purposes hereof, Losses shall mean $15,000,000; provided, however, that be calculated based on the first (1st) anniversary amount of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, Loss that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to remains after deducting therefrom (i) any litigation, existing insurance proceeds actually received (currently or threatened, that is required to be set forth in Sections 3.7, 3.8(athe future), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach Tax benefits actually recognized as a result of the Loss as a cash refund or violation reduction in cash Taxes payable by the Indemnified Party, in each case, in either (x) the taxable year that includes the incurrence of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant the Loss that gave rise to Section 1.1, the Company claim or any Company Subsidiary on or after (y) the Closing Datetaxable year immediately preceding such taxable year described in the preceding clause (x), and (iii) any fraud committed indemnity, contribution or other similar payment received or to be received by PSCan Indemnified Party with respect thereto.
(e) Notwithstanding anything to the contrary elsewhere in this Agreement, Acquisitionno party shall, in any event, be liable to any other Person for any Losses pursuant to this Article X that are consequential, incidental, indirect, special or punitive damages, including loss of future revenue, income or profits or loss of opportunity or a multiple of revenue, income, profits or any other amount, except (i) to the extent the same are required to be paid to a third party pursuant to a Third Party Claim or (ii) to the extent such Losses being measured arise from the termination or breach of a Contract, lost revenue, income or profits directly attributable to such Contract may be included in the determination of Losses relating thereto.
(f) No Securityholder shall have any Indemnification Obligations hereunder for any Losses arising out of a breach of or inaccuracy of any representation, warranty, covenant or agreement set forth in this Agreement (and the amount of any Losses incurred in respect of such breach or inaccuracy shall not be included in the calculation of any limitations on indemnification set forth herein) to the extent the matter giving rise to such breach or inaccuracy was included in the determination of the Final Adjustment Amount or Transaction Expenses for purposes of determining adjustments to the Transaction Consideration.
(g) The Indemnified Parties’ sole remedy for Losses with respect to Taxes (including, but not limited to, any breach of a representation or warranty contained in Section 4.13), other than Losses incurred as a result of any breach of a representation or warranty contained in Section 4.13(g), Section 4.13(h), Section 4.13(i), Section 4.13(m) and Section 4.20 shall be limited to Taxes of the Acquired Companies for Pre-Closing Tax Periods (or the portion of an Straddle Period ending on the Closing Date as determined in accordance with Section 8.7.
(h) If an Indemnified Party is entitled to indemnification under more than one clause or subclause of this Agreement with respect to Losses, then such Indemnified Party shall be entitled to only one indemnification or recovery for such Losses to the extent it arises out of the same set of circumstances and events; it being understood that this Section 10.6(h) is solely to preclude a duplicate recovery by an Indemnified Party.
(i) The Securityholders shall have no Indemnification Obligations and the Buyer Subsidiary designated by PSC Indemnified Parties shall have no recourse against the Escrow Fund for a claim pursuant to Section 1.1, 10.2(h) in excess of (x) $100,000 minus (y) any amounts paid by the Company prior to Closing or any Company Subsidiary included as a current liability in Final Closing Net Working Capital (provided that other than the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Datefees and costs set forth in Schedule 10.6(i)).
Appears in 1 contract
Sources: Acquisition Agreement and Plan of Merger (Envestnet, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision The representations and warranties of Buyer and each Seller (including without limitation each Indemnifying Seller) contained in this Agreement to the contraryAgreement, the Parties' obligations Buyer Disclosure Schedule, the Corporation Disclosure Schedule, the Seller Disclosure Schedule or in any certificate, instrument, agreement or other writing delivered by or on behalf of Buyer or any Seller pursuant to this Article IV areAgreement or in connection with the transactions contemplated herein shall survive any investigation heretofore or hereafter made by or on behalf of the Buyer or the Seller, and at all times shall be, as applicable (subject to the limitations provisions of this Article 9), and the consummation of the transactions contemplated herein, and all such representations and warranties shall be of no further force and effect after two years from the date of the Closing, except for matters set forth in this Section Sections 3.14, 3.17, 3.18, 4.1, 4.2, 4.3, 4.4, 5.10, 5.12 and 5.16, for which the survival period shall extend until the expiration of the applicable statutory limitations period (as applicable, the "Survival Period"). The Parties Anything to the contrary notwithstanding, a claim for indemnification which is made in writing but not resolved prior to the expiration of the Survival Period may be pursued and resolved after such expiration.
(b) An Indemnitee shall be obligated to prosecute diligently and in good faith any claim for Indemnified Losses with any applicable insurer prior to collecting any indemnification payment hereunder, provided that an Indemnitee shall be entitled to collect an indemnification payment otherwise due to it hereunder if such Indemnitee has not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as received reimbursement from the applicable insurer(s) within twelve (12) months after it has given such insurer(s) appropriate written notice of its claim.
(c) In the case may bewhere an Indemnitee recovers from third parties all or any part of any amount previously paid to it by any Seller hereunder, until such Indemnitee shall promptly pay over to such Seller the aggregate amount so recovered (net of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined any expenses actually incurred by it in Section 4.3(b)procuring such recovery), following which but not in excess of any amount previously so paid by the indemnifying Indemnifying Party. No amount shall become payable by an Indemnifying Party shall indemnify, defend to an Indemnity in respect of any third party claim unless and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable LossesIndemnity shall have become required to pay after exhausting all available remedies, as the case may be, exceed the Indemnity Basket. In additionand shall actually have paid, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable relevant Indemnified Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofrelevant third party.
(bd) As used in this Agreement, The amount of any claim made hereunder shall be reduced by taking into account (i) any amount payable to the term "Indemnity Basket" shall mean $250,000Buyer or the Corporation by any insurer or other third party in respect of the relevant Indemnified Losses, and (ii) any offsetting benefit (including any tax reduction) to the term "Indemnity Cap" shall mean $15,000,000; providedrelevant Corporation or to any Affiliate thereof, howevereither in the year in which the Indemnified Losses are sustained or in any other year.
(e) For purposes of computing the amount of any Indemnified Losses, that on only the first (1st) anniversary of the Closing Date, the Indemnity Cap loss actually sustained shall be reduced totaken into account, to the exclusion of any price/earnings or similar multiplier implicit in the Purchase Price, and in no event shall thereafter mean, $7,500,000; any Indemnifying Party be liable for unforeseen or consequential damages.
(f) The Indemnitees shall not be entitled to any indemnification payments if they have not timely notified the Indemnifying Parties and provided further, that on otherwise complied in all material respects with all the second other provisions of this Article 9.
(2ndg) anniversary The Indemnitees shall not be entitled to any indemnification in connection with Indemnified Losses resulting from facts of which the Closing Date, Indemnitees were aware at the Indemnity Cap time of executing this Agreement.
(h) Sellers shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding have no liability under any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Indemnified Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to which arise as a result of (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of actions taken by the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller Buyer or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or Corporation after the Closing Date, and or (iiiii) the passing of, or any fraud committed by PSCchange in, Acquisitionafter the date hereof, any law or administrative practice of any government, governmental department, agency or regulatory body in any such case not actually in force at the date of this Agreement.
(i) The Indemnitees shall use their best efforts, and the Buyer Subsidiary designated Indemnitees shall cause the Corporation to use its best efforts, to mitigate any Indemnified Losses which any of them may suffer as a result of any matters giving rise to a claim for indemnification hereunder.
(j) The provisions of this Article 9 shall constitute the sole remedy of all of the parties hereto for any misrepresentation or breach of representation or warranty contained in this Agreement, any Disclosure Schedule, or any certificate, instrument, agreement or other writing delivered by PSC or on behalf of any such party pursuant to Section 1.1, this Agreement or in connection with the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)transactions contemplated herein.
Appears in 1 contract
Sources: Stock Purchase Agreement (Lineo Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrarycontrary contained in this Agreement, the Parties' obligations pursuant to this liability of the Partners for breaches of any representations or warranties under Article IV are, V and at all times shall be, subject to the limitations set forth indemnifications in this favor of the Purchaser Indemnities contained in Section 4.3. The Parties 12.1 herein (i) shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, effective until the aggregate dollar amount of the Buyer Indemnifiable all Purchaser Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket sum of $100,000, which amount is intended to be a threshold and shall not limit the Partners' liability under this Article XII for amounts below $100,000 once such threshold is met, and (as defined ii) shall terminate once the dollar amount of all Purchaser Losses paid under such Section aggregates an amount in Section 4.3(b))excess of the net cash proceeds received by the Partners at Closing, following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Partners shall thereafter have no further obligations or liabilities with respect to any such representations and warranties or Purchaser Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used Notwithstanding any provision to the contrary contained in this Agreement, the liabilities of the Purchaser for breaches of any representations or warranties under Article VI and the indemnifications in favor of the Partners' Indemnitees contained in Section 12.2 herein (i) shall not be effective until the term "Indemnity Basket" shall mean aggregate dollar amount of all Partner Losses indemnified against under such Section exceeds the sum of $250,000100,000, which amount is intended to be a threshold and not limit the Purchaser's liability under this Article XII for amounts below $100,000 once such threshold is met; and (ii) shall terminate once the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary dollar amount of all Partner Losses paid under such Section aggregates an amount in excess of the Closing Date, net cash proceeds received by the Indemnity Cap shall be reduced toPartners at Closing, and the Purchaser shall thereafter mean, $7,500,000; have no further obligations or liabilities with respect to any such representations and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing warranties or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Partner Losses.
Appears in 1 contract
Sources: Purchase Agreement (Apartment Investment & Management Co)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Sellers shall not be required to indemnify, defend liable for indemnification for Damages for breaches of representations or hold harmless any Buyer Indemnitee warranties under Section 10.1(a) and the Buyers shall not be liable for indemnification for Damages for breaches of representations or Seller Indemnitee, as the case may be, warranties under Section 10.2(a) until the cumulative aggregate amount of such Damages exceeds five million dollars ($5,000,000) (the “Indemnity Deductible”), at which time the Sellers will be obligated to indemnify the Buyer Indemnifiable Losses Indemnified Parties or the Buyers will be obligated to indemnify the Seller Indemnifiable LossesIndemnified Parties, as applicable, from and against all such Damages in excess of the case may beDeductible; provided, exceeds however, that the Indemnity Basket (as defined Deductible shall not apply to Damages arising in respect of claims for breaches of Fundamental Representations. For the avoidance of doubt, the Indemnity Deductible shall not apply to Damages arising in respect of claims with respect to the Sellers’ obligation to pay their share of Taxes pursuant to Section 4.3(b)7.6(a), following which the indemnifying Party Sellers’ liability for Pre-Closing Taxes or any other indemnity claim relating to Taxes.
(b) The maximum aggregate obligation of the Sellers hereunder for Damages for breaches of representations or warranties under Section 10.1(a) or of the Buyers hereunder for Damages for breaches of representations or warranties under Section 10.2(a) shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, not exceed the Indemnity Basket. In addition, General Escrow Amount (the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)“Cap”); provided, however, that the limitations in determining whether this paragraph shall not apply to Damages arising in respect of claims for breaches of the Fundamental Representations. For the avoidance of doubt, the Cap shall not apply to Damages arising in respect of claims with respect to the Sellers’ obligation to pay their share of Taxes pursuant to Section 7.6(a), the Seller's and DQE's ’s liability for Pre-Closing Taxes or any other indemnity claim relating to Taxes. For the avoidance of doubt, the maximum aggregate liability of the Sellers, on the one hand, and the Buyers, on the other hand, for Damages shall not exceed the Purchase Price actually paid by the Buyers.
(c) For purposes of this Article 10, a particular Buyer Indemnifiable Loss breach of a representation or warranty, including any Fundamental Representation, shall be deemed to exist either if such representation or warranty is actually breached or would have been breached if such representation or warranty had not contained any limitation or qualification as to “materiality”, “Material Adverse Effect,” “material adverse effect” (which instead shall be read as any adverse effect or change, except in the Buyer's liability for a particular Seller Indemnifiable Losscase of the reference to “Material Adverse Effect” in Section 4.6(a) which shall continue to be read as “Material Adverse Effect”) or similar qualifier and the amount of Damages in respect of any breach of representation or warranty, in either case, including any deemed breach pursuant to this Article IV is limited by clause, shall be determined without regard to any such limitation or qualification as to “materiality”, “Material Adverse Effect,” “material adverse effect” (which instead shall be read as any adverse effect or change, except in the Indemnity Cap, case of the Parties reference to “Material Adverse Effect” in Section 4.6(a) which shall refer continue to the Indemnity Cap that is be read as “Material Adverse Effect”) or was similar qualifier set forth in effect such representation or warranty except with respect to requirements to list material items on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofDisclosure Letter.
(bd) As used Notwithstanding anything in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, no Seller Indemnified Party or Buyer Indemnified Party will be entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the Seller's extent taken into account in the final determination of Net Working Capital or the provisions of Article II, or to the extent already indemnified or reimbursed for pursuant to Section 7.6 or Article X.
(e) Notwithstanding anything herein to the contrary, the right of the Buyer Indemnified Parties and DQE's liability for the following Buyer Indemnifiable Losses shall not be Seller Indemnified Parties, as applicable, to indemnification is further limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to as follows:
(i) The Buyer Indemnified Parties’ right to indemnification pursuant to Section 10.1 will be reduced by all insurance or other third party indemnification, contribution or other similar proceeds actually received by the Buyers (net of any litigationincrease in insurance premiums, existing retroactive premiums, premium adjustments or threatenedcosts of collection) pursuant to policies held by, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the SellerContracts of, the Company or any Subsidiary of the Company Subsidiary (provided that as of the foregoing reference Closing. The U.S. Buyer shall, and shall cause the Company and its Subsidiaries to, use commercially reasonable efforts to claim and recover any Damages suffered by the Buyers under any such insurance policies or other third party indemnification, contribution or other similar agreement. The Buyers shall promptly remit to the Company Sellers for the benefit of the Sellers the net amount of any such insurance or any Company Subsidiary refers to fraud committed prior other third party indemnification, contribution or other similar proceeds which are paid to the Closing Date); in addition, Buyers or their Affiliates with respect to Damages for which the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating U.S. Buyer and its Subsidiaries have been previously compensated pursuant to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, 10.1;
(ii) any breach or violation If, at the time of any Environmental Law by PSCthe indemnity payment, Acquisitionthe Dutch Buyer is and remains exclusively subject to Dutch corporate income tax (vennootschapsbelasting) and at the time of the indemnity payment, any the US Buyer Subsidiary designated by PSC is and remains exclusively subject to U.S. federal income tax, the Buyer Indemnified Parties’ right to indemnification pursuant to Section 1.1, 10.1 will be increased to take into account of any net Tax cost actually realized by the Company Buyers or any Company Subsidiary on or after their respective Affiliates as a result of the Closing Date, and receipt of indemnity payments hereunder (grossed-up for such increase);
(iii) any fraud committed by PSC, Acquisition, any The Buyer Subsidiary designated by PSC Indemnified Parties’ or Seller Indemnified Parties’ right to indemnification pursuant to Section 1.110.1 will be offset by the net amount of the Tax benefits actually realized by such Parties or their respective Affiliates with respect to such Damages (determined on a with and without basis). To the extent Pre-Closing Taxes are required to be offset by any Post-Closing Tax Attribute, the Company Post-Closing Tax Attribute will be ignored for the purposes of calculating the indemnification obligation with respect to Pre-Closing Taxes; and
(iv) Each of the Sellers and the Buyers shall take all commercially reasonable steps to mitigate any Damages upon becoming aware of any event or circumstance that has given rise to an indemnification claim hereunder. This Section 10.5(e)(iv) shall not apply with respect to any Company Subsidiary (provided that the foregoing reference claims for indemnity with respect to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Taxes.
Appears in 1 contract
Sources: Share Purchase Agreement (Centaur Guernsey L.P. Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement Agreement:
(a) To the extent that the Stockholders and/or Parent shall have any obligation to the contrary, the Parties' obligations pursuant to this Article IV are, indemnify and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee other person hereunder, such obligation shall not include lost profits or Seller Indemniteeother consequential, special, punitive, incidental or indirect damages (and the injured party shall not recover for such amounts), other than to the extent any such damages are asserted by a third party against an indemnified party in a Third Party Claim.
(b) Parent and the Stockholders Representative, acting on behalf of the Stockholders, shall cooperate with each other with respect to resolving any claim or liability that may lead to Losses hereunder including by making commercially reasonable efforts to mitigate or resolve any such claim or liability.
(c) Parent and the Stockholders Representative, acting on behalf of the Stockholders, further acknowledge and agree that, other than (i) the representations and warranties of the Company and the Stockholders contained in Article III of this Agreement and the other Transaction Agreements and the covenants of the Company contained in this Agreement and the other Transaction Agreements, and (ii) the representations and warranties of Parent and Sub contained in Article IV of this Agreement and the other Transaction Agreements and the covenants of Parent and Sub contained in this Agreement and the other Transaction Agreements, there are no representations, warranties or covenants of the Company, the Stockholders Representative, the Stockholders or Parent and Sub, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses either expressed or Seller Indemnifiable Lossesimplied, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only with respect to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as transactions contemplated by this Article IV shall Agreement and the other Transaction Agreements. Each of the parties hereto hereby acknowledges and agrees that in no event exceed an aggregate amount of dollars equal connection with the transactions set forth herein, Parent and the Company have received certain estimates, projections, forecasts and similar forward-looking statements relating to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether future operating and financial performance of the Seller's other party and DQE's liability for a particular Buyer Indemnifiable Loss no representation or the Buyer's liability for a particular Seller Indemnifiable Loss, in warranty is being made by or on behalf of either case, pursuant party with respect to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofmatters.
(bd) As used Notwithstanding anything contained in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, no party shall have any right to indemnification under this Article IX with respect to any Losses to the Seller's extent (and DQE's liability for only to the following Buyer Indemnifiable extent) such Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) arise primarily out of any litigation, existing action or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 inaction of the Seller Disclosure Schedule, such party; (ii) Excluded Assets, arise solely out of changes after the Closing Date in applicable Law or interpretations or applications thereof; or (iii) are duplicative of Losses that have previously been recovered hereunder.
(e) Upon payment in full of any and all liabilities and obligations claim arising under Section 9.05(c) (an “Inter-Party Claim”), pursuant to such Section 9.05(c) or the payment of any judgment with respect to a Third Party Claim pursuant to Section 9.05, the indemnifying party shall be subrogated to the extent of such payment to the rights of the Seller indemnified party against any person with respect to the subject matter of such Inter-Party Claim or Third Party Claim, unless the Subsidiaries of indemnified party has a continuing commercial relationship with the Seller counterparty to the Third Party Claim or Inter-Party Claim (other than any liabilities insurance company that has issued an insurance policy that is applicable to such Third Party Claim or obligations Inter-Party Claim). The indemnified party shall assign or otherwise reasonably cooperate with the indemnifying party to assign, at the cost and expense of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisitionindemnified party, any Buyer Subsidiary designated by PSC and all rights to pursue any claims against, or otherwise recover amounts from, any person liable or responsible for any Losses for which indemnification has been received pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Authentec Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained in this Agreement:
9.4.1 In no event shall Seller be liable, the Parties' obligations or required to make any payment pursuant to this Article IV areSection 9.2, for any Seller Indemnifiable Damages suffered by any of the Purchaser Indemnified Parties unless and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate dollar amount of the Buyer Indemnifiable Losses or all such Seller Indemnifiable LossesDamages exceeds Five Hundred Thousand Dollars ($500,000.00) (such amount, as the case may be, exceeds the Indemnity “Basket (as defined in Section 4.3(b)Amount”), following in which case Purchaser Indemnified Parties shall be entitled to recover from the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the first dollar of Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))Damages; provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity maximum aggregate liability of Seller in respect of all Seller Indemnifiable Damages shall be limited to, and not exceed, one and one-half percent (1.5%) of the Purchase Price (the “Seller Liability Cap" shall mean $15,000,000”); provided, however, that on in no event shall the first (1st) anniversary Seller Liability Cap apply with respect to any of the Closing DateFundamental Representations or the Tax Representations or any Seller Indemnifiable Damages relating thereto.
9.4.2 Following the Closing, except with respect to any Fundamental Representations or Tax Representations or any Seller Indemnifiable Damages relating thereto, none of the Indemnity Cap Purchaser Indemnified Parties shall (or shall have the right to) seek, pursue or enter any judgment or collect (or attempt to collect) an amount in excess of the Seller Liability Cap. Purchaser shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on required to notify Seller prior to the second (2nd) anniversary Outside Claim Date of any claim against Seller for a breach of or inaccuracy in any of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Seller’s Representations pursuant to Section 4.2(a9.2 by the delivery of a written notice (each such notice, a “Notice of Claim” and each such claim identified therein a “Noticed Claim”) setting forth: the dollar amount of the Purchaser Indemnifiable Damages relating to the Noticed Claim (or a reasonable estimate of the amount of such Noticed Claim). If Purchaser and Seller cannot mutually agree upon the settlement of any Noticed Claim, Purchaser shall be deemed to have waived its right to pursue such Noticed Claim (and any right to collect from Seller with respect to such Noticed Claim), in which case the Indemnity Cap shall continue unless Purchaser brings a court action with respect to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing such Noticed Claim on or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to date that is ninety (i90) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or days after the Closing Outside Claim Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Purchase and Sale Agreement (New Senior Investment Group Inc.)
Limitations on Indemnification. (a) No claim for indemnification may be made by the Purchaser Indemnified Parties pursuant to Section 7.1(b) or Section 10.1(a) until the aggregate amount of all such claims for which Losses are otherwise recoverable is in excess of $700,000 (the "Threshold Amount"), after which the Purchaser Indemnified Parties will be entitled to make any such claim for amounts beginning at the first dollar of such Losses in excess of the Threshold Amount.
(b) Notwithstanding any provision of this Agreement to the contrary except for Section 7.4(d) hereof, the liability of each Seller for Losses or other claims for indemnification under Section 7.1(a) of this Agreement shall not exceed that portion of the Purchase Price actually received by such Seller pursuant to this Agreement, including any Remaining Escrow Amount and any Indemnification Expense Cash actually received by such Seller pursuant to a distribution thereof.
(c) Notwithstanding any provision of this Agreement to the contrary except for Section 7.4(d) hereof, the aggregate liability of the Sellers for Losses or other claims for indemnification under Section 7.1(b) and Section 10.1(a) of this Agreement shall not exceed an aggregate amount equal to the Escrow Amount initially deposited into the escrow fund pursuant to the Escrow Agreement, and the sole source for satisfying such indemnification claims against the Sellers, individually or jointly, shall be the Escrow Amount.
(d) Notwithstanding any provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Sections 7.4(a), (b) and (c) shall not apply in the case of fraud and nothing in this Article 7 shall limit any rights any person may have with respect to any claim for fraud.
(e) Any claims made by any Purchaser Indemnified Party under this Article 7 will be further limited as follows:
(i) The amount required to indemnifybe paid for Losses will be reduced to the extent of any insurance proceeds a Purchaser Indemnified Party actually receives under any insurance policies (if any) covering such Losses.
(ii) In determining the amount of Loss payable under Section 7.1, defend the parties will take into account any Tax benefit or hold harmless any Buyer Indemnitee Tax actually realized or Seller Indemniteeincurred, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses by an Indemnifying Party or Seller Indemnifiable LossesPurchaser Indemnified Party, as the case may be, exceeds with respect to such Loss, and the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party calculation of Losses shall indemnify, defend and hold harmless the Buyer Indemnitees be computed net of such Tax benefit or the Seller Indemniteesgross of such Tax, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(bf) As used Notwithstanding anything in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, after the Seller's date hereof and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for Company is permitted to provide Supplemental Disclosures as contemplated by Section 6.7. No such Supplemental Disclosures will affect the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties Company set forth in Article 8. For purposes of this Article 7, notwithstanding anything in this Agreement to the contrary, excluding fraud, no claims for indemnification may be made by any Purchaser Indemnified Party in respect of Taxesa Loss that arises as a result of the matters disclosed in the Supplemental Disclosures until such claims for which Losses are otherwise recoverable are in excess of $200,000, as after which any claim made in respect of such Supplemental Disclosures for amounts beginning at the first dollar in excess of $200,000 shall be (x) counted towards the Threshold Amount set forth in Section 4.57.4(a) herein, and (y) if the Threshold Amount has already been reached, shall be subject to Sections 7.4(b), 7.4(c), 7.4(d) and 7.4(e). To the extent that claims for indemnification are made with respect to the Supplemental Disclosures, the indemnification procedures, limitations and provisions of this Article 7 shall otherwise govern any indemnification claims which arise from matters in the Supplemental Disclosures. With respect to Supplemental Disclosures, it is understood that (i) actions taken pursuant to Section 6.1 with the consent of the Purchaser and (ii) the Company's entry into new Material Contracts in the ordinary course of business shall not be deemed the basis of indemnification under this Section 7.4(f) so long as any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant such new Material Contract would not reasonably be expected to Section 1.1, the have a Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Material Adverse Effect.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding In no event shall the indemnification obligations of the Holders include any other provision of this Agreement obligation to the contrary, the Parties' obligations pursuant to this Article IV are, provide indemnification for Covered Losses unless and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of all Covered Losses for which the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Parent Indemnified Parties are entitled to indemnification exceeds an amount equal to ** (the case may be, exceeds the “Indemnity Basket (as defined in Section 4.3(b)Basket”), following in which case the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case Parent Indemnified Parties may be, only be entitled (subject to the extent that the Buyer Indemnifiable other limitations herein) to indemnification only for Covered Losses or the Seller Indemnifiable Losses, as the case may be, exceed in excess of the Indemnity Basket. In additionaddition to the foregoing limitation, if the total amount of Covered Losses arising out of a specific breach does not exceed **, then no Parent Indemnified Party shall be entitled to indemnification for any such Covered Losses and such Covered Losses shall not be included for purposes of determining whether the Indemnity Basket has been exceeded.
(b) The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, the Seller's Fundamental Company Representations or the Statutory Representation) shall be limited to **. Notwithstanding the preceding sentence, **, the maximum obligation of the Holders to provide indemnification to any and DQE's liabilityall Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, taken together, for Buyer Indemnifiable Losses the Fundamental Company Representations or the Statutory Representation) and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV 12.2(c) shall in no event exceed be limited to an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))**; provided, however, that in determining whether any such indemnification obligation shall be satisfied first from the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer Escrow Account to the Indemnity Cap that is or was extent any funds remain therein, and thereafter by each Holder, severally (in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofaccordance with its Sharing Ratio) but not jointly.
(bc) As used The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Section 12.2(a)(iii) in this Agreement, (irespect of the Statutory Representation and pursuant to Sections 12.2(b) the term "Indemnity Basket" and 12.2(c) shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000be limited to an amount equal to **; provided, however, that on any such indemnification obligation shall be satisfied first from the first Escrow Account to the extent any funds remain therein, and thereafter by each Holder, severally (1stin accordance with its Sharing Ratio) anniversary but not jointly.
(d) The maximum obligation of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant Holders to Section 4.2(a), in which case the Indemnity Cap shall continue provide indemnification to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities Parent Indemnified Parties pursuant to Sections 12.2(a)(i) and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (12.2(a)(iii) in respect of the Company)Fundamental Holder Representations and the Fundamental Company Representations shall be limited to an amount equal to **; provided, Utilityhowever, Developmentthat any such indemnification obligation shall be satisfied first from the Escrow Account to the extent any funds remain therein, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any and thereafter (A) in the case of the Integrated Assets or Integrated Liabilities)Fundamental Holder Representations, by the Holder who made such representations and (ivB) indemnity obligations in the case of the Parties Fundamental Company Representations, by each Holder, severally (in respect of Taxes, as set forth in Section 4.5, accordance with its Sharing Ratio) but not jointly.
(ve) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference Notwithstanding anything to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); contrary contained in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisitionthis Article XII, any Buyer Subsidiary designated by PSC Losses subject to indemnification pursuant to Section 1.1, 12.2 shall be decreased to the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided extent that the foregoing reference to amount of such Losses are reflected as a liability, reserve, accrual or other item on the Company Final Balance Sheet or any Company Subsidiary refers to fraud committed on or after are otherwise included in the Closing Date)determination of the Final Adjustment Amount.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to From the contraryClosing until the Escrow Release Date, the Parties' obligations pursuant MGT Indemnitees shall first seek recovery for Losses from the Escrow Fund until there are no amounts remaining in the Escrow Fund, after which the MGT Indemnitees may seek recovery for Losses directly against the Seller. Absent fraud or any breach of the representations and warranties contained in Section 6.5 (Purchased Assets), (i) Seller shall have no obligation to this Article IV are, indemnify the MGT Indemnitees under Section 8.2(i) unless and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of all Losses incurred by the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as MGT Indemnitees in respect thereof exceeds $5,000 (the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)“Threshold Amount”), following which the indemnifying Party whereupon Seller shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only be obligated in respect of all Losses so identified without regard to the extent that Threshold Amount from the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice first dollar of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure ScheduleLosses, (ii) Excluded Assets, (iiiSeller shall have no obligation to indemnify the MGT Indemnitees under Section 8.2(i) any and all liabilities and obligations for aggregate Losses exceeding the value of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing DateEscrow Shares, and (iii) any fraud committed Seller shall have no obligation to indemnify the MGT Indemnitees under this Agreement for aggregate Losses exceeding the Purchase Price. Absent fraud, (x) Purchaser shall have no obligation to indemnify the Seller Indemnitees under Section 8.3(i) unless and until the aggregate amount of all Losses incurred by PSCthe MGT Indemnitees in respect thereof exceeds the Threshold Amount, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference whereupon MGT shall be obligated in respect of all Losses so identified without regard to the Company or any Company Subsidiary refers Threshold Amount from the first dollar of such Losses, and (y) Purchaser shall have no obligation to fraud committed on or after indemnify the Closing Date)Seller Indemnitees under this Agreement for aggregate Losses exceeding the Purchase Price.
Appears in 1 contract
Sources: Asset Purchase Agreement (MGT Capital Investments Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained herein, the Parties' obligations pursuant Seller shall be obligated to this Article IV areindemnify Del and the Purchaser, and at all times Del and the Purchaser shall bebe obligated to indemnify the Seller, subject for the applicable Indemnified Amounts hereunder only up to a maximum aggregate amount equal to the limitations Purchase Price plus the Contingent Consideration.
(b) Notwithstanding anything to the contrary contained herein, neither Seller nor Del or Purchaser shall be entitled to any recovery from the other with respect to any breach of warranty or representation set forth herein or the indemnification provided for in this Sections 5.17, 11 or 12 hereof unless and until the aggregate amount of the applicable Indemnified Amounts suffered, sustained or incurred by the asserting party, or to which such party becomes subject, by reason of such breach or indemnity, shall exceed in the aggregate Fifty Thousand ($50,000) Dollars (the "Cushion Amount"). In the event that the sum of the applicable Indemnified Amounts for which no indemnification has been made hereunder (the "Aggregate Indemnified Amount") shall exceed the Cushion Amount, the indemnification obligations imposed herein shall apply to all amounts from the first dollar of such claims.
(c) Notwithstanding anything to the contrary contained herein, the indemnification limitation and Cushion Amount set forth herein and in Section 4.3. The Parties 12.1 shall not be required to indemnifyapply in the event that the Seller, defend Del or hold harmless any Buyer Indemnitee or Seller IndemniteePurchaser, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses fraudulently (i) omitted a material fact or (ii) misrepresented or breached any representation or warranty in this Agreement or in any agreement or schedule required to be delivered by Seller Indemnifiable Lossesor by Del or Purchaser, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Asset Purchase Agreement (Del Global Technologies Corp)
Limitations on Indemnification. Notwithstanding anything in this Section 6 to the contrary:
(a) Notwithstanding any other provision of this Agreement to Recourse by the contrary, Buyer Indemnified Parties against the proceeds then remaining in the Indemnification Escrow Deposit shall be the Buyer Indemnified Parties' obligations pursuant to this Article IV are, ’ sole and at all times shall be, subject to the limitations set forth exclusive remedy in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount respect of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Stockholders’ indemnification obligations for the case may be, exceeds the Indemnity Basket (as defined matters referred to in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)6.2(a); provided, however, that the limitation contained in determining whether the Seller's and DQE's liability for this sentence shall not apply to claims under Section 6.2(a) in respect of any breach or inaccuracy of a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.Fundamental Representation; and
(b) As used To the extent that the Buyer Indemnified Parties are entitled to recovery under Section 6 in this Agreementexcess of proceeds then remaining in the Indemnification Escrow Deposit, (i) the term "Indemnity Basket" Buyer Indemnified Parties shall mean $250,000not be entitled to recover amounts directly from the Stockholders under this Section 6 in respect of the Stockholders’ indemnification obligations until such time as the Indemnification Escrow Deposit has been fully exhausted; provided, however, unless the Stockholders’ Representative has satisfied such Losses from the Stockholders’ Representative Expense Holdback Amount pursuant to Section 1.19, Buyer shall not be required to first proceed against the Indemnification Escrow Deposit prior to seeking from any Stockholder, and shall be permitted to proceed against any Stockholder without proceeding against the Indemnification Escrow Deposit, if any Buyer Indemnified Party incurs Losses arising out of Section 6.2(f) by virtue, and to the extent, of any undue benefit received by such specific Stockholder pursuant to the Closing Allocation Schedule or Section 6.2(g) by virtue, and to the extent, of the intentional fraud, willful breach or intentional misrepresentation of such specific Stockholder; (ii) for each such Loss a Stockholder shall only be liable for its Pro Rata Share of such Loss; and (iii) in no event shall the aggregate indemnification obligations of any Stockholder exceed the amount actually received by such Stockholder as Merger consideration hereunder (inclusive of its share of the Net Asset Escrow Deposit, Indemnification Escrow Deposit and Stockholders’ Representative Expense Holdback Amount actually received), except solely in the case of fraud, willful breach or intentional misrepresentation committed by such Stockholder.
(c) The amount of the Indemnification Escrow Deposit then remaining on deposit with the Escrow Agent pursuant to the Escrow Agreement (after taking into account any amounts to be released to the Stockholders’ Representative pursuant to Section 1.19) shall be released to the Stockholders, based on their respective Pro Rata Share, no later than eighteen (18) months after the Closing Date in accordance with the terms of the Escrow Agreement; provided, however, if any claim or claims for indemnification are pending on such date that is eighteen (18) months after the Closing Date, the amount released from the Indemnification Escrow Deposit to the Stockholders shall be reduced by the amount of any such pending claim or claims, and any such amount so retained by the Escrow Agent shall be released upon final resolution of any such claim or claims; provided further, however, on the date that is twelve (12) months after the Closing, the amount of the Indemnification Escrow Deposit then remaining on deposit with the Escrow Agent pursuant to the Escrow Agreement in excess of the sum of (i) $5,000,000 (after taking into account any amounts to be released to the Stockholders’ Representative pursuant to Section 1.19) plus (ii) the term "Indemnity Cap" amount of any unresolved claims, shall mean be released to the Stockholders, based on their respective Pro Rata Share in accordance with the terms of the Escrow Agreement.
(d) The right to indemnification, compensation or reimbursement or any other remedy based on representations, warranties, covenants and agreements in this Agreement or any other Transaction Document shall not be affected by any investigation conducted at any time, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with any such representation, warranty, covenant or agreement.
(e) For purposes of determining an inaccuracy in any representations or warranties, the breach of or failure to perform any covenants or agreement and calculating Losses under this Section 6 only, materiality, material adverse effect (including Material Adverse Effect) or similar qualifications limiting the scope of such representations, warranties, covenants or agreements shall be disregarded.
(f) Subject to Section 6.5(g) and without limiting the effect of any other limitation contained in this Agreement, the indemnification obligations of the Stockholders provided for in Section 6.2 will not apply, and the Indemnified Parties will not be entitled to exercise any indemnification rights under this Agreement, unless and until the aggregate amount of Losses against which such Indemnified Parties would otherwise be entitled to be indemnified under Section 6.2 exceeds $15,000,000650,000 (the “Deductible”), after which the Indemnified Parties shall be entitled to indemnification for all of their Losses in excess of the Deductible; provided, however, that on this Section 6.5(f) and the first Deductible will not apply to any Excluded Matters.
(1stg) anniversary of the Closing Date, the Indemnity Cap shall Any claim for Losses will be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to calculated (i) any litigationwithout regard to incidental, existing special, speculative, indirect or threatenedconsequential damages, in each case that is required are not reasonably foreseeable (unless such damages are actually awarded to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed a third party by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).a Governmental
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Limitations on Indemnification. The rights of Purchaser Indemnitees and Seller Indemnitees to indemnification pursuant to the provisions of this Article VIII are subject to the following limitations:
(a) Notwithstanding the Purchaser Indemnitees shall not be entitled to recover any other provision Losses pursuant to Section 8.2(a)(i) until the total amount of Losses which the Purchaser Indemnitees would be entitled to recover under Section 8.2(a)(i) with respect to any and all claims for indemnification thereunder, but for this Agreement to Section 8.4(a), exceeds $800,000 (the contrary“Deductible”), and once the Deductible has been exceeded, the Parties' obligations pursuant Purchaser Indemnitees shall only be entitled to this Article IV arerecover Losses in excess of the Deductible; provided, and at all times however, that the Deductible shall benot apply to Losses suffered or paid by any Purchaser Indemnitee as a result of the breach of any representation or warranty made by Seller in Section 3.2, Section 3.3, Section 3.5(a) or Section 3.12, it being agreed that, in such circumstances, the applicable Purchaser Indemnitee shall, subject to the other limitations set forth in this Section 4.3. The Parties Article VIII, be entitled to be indemnified and held harmless from the first dollar of such Losses;
(b) the Seller Indemnitees shall not be required entitled to indemnify, defend or hold harmless recover any Buyer Indemnitee or Seller Indemnitee, as the case may be, Losses pursuant to Section 8.2(b)(i) until the aggregate total amount of Losses which the Buyer Indemnifiable Losses or Seller Indemnifiable LossesIndemnitees would be entitled to recover under Section 8.2(b)(i) with respect to any and all claims for indemnification thereunder, as the case may bebut for this Section 8.4(b), exceeds the Indemnity Basket (Deductible, and once the Deductible has been exceeded, the Seller Indemnitees shall only be entitled to recover Losses in excess of the Deductible, provided, however, that the Deductible shall not apply to Losses suffered or paid by any Seller Indemnitee as defined a result of the breach of any representation or warranty made by Purchaser in Section 4.3(b)4.2, Section 4.6, Section 4.7 or Section 4.8, it being agreed that, in such circumstances, the applicable Seller Indemnitee 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;
(c) neither the Purchaser Indemnitees nor Seller Indemnitees shall be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), following which respectively, unless such Loss (including any series of related Losses) equals or exceeds $10,000, and any such Loss (including any series of related Losses) below such threshold shall not be counted for purposes of determining whether the indemnifying Party shall indemnifyDeductible has been exceeded, defend and hold harmless provided that if such Loss (including any series of related Losses) exceeds such threshold then the Buyer applicable Purchaser Indemnitees or the Seller Indemnitees, as the case may be, only shall be entitled to recover the full amount of such Loss (including any series of related Losses), subject to (and limited by) the other terms set forth in this Article VIII;
(d) except in case of fraud, the sole and exclusive source of recovery in respect of any indemnification claim made by any Purchaser Indemnitee pursuant to this Article VIII shall be the Closing Escrow Amount, and in no event shall (i) Seller or any Affiliate thereof or any other Person have any direct liability or obligation in respect of any such indemnification claim, or (ii) the Purchaser Indemnitees be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article VIII from any source other than the Closing Escrow Account or in an aggregate amount in excess of the Closing Escrow Amount on deposit in the Closing Escrow Account as of any applicable date of determination, it being agreed that on the date (if any) that the Closing Escrow Amount is reduced to zero (0) for any reason (including due to the release of the Closing Escrow Amount from the Closing Escrow Account in accordance with the terms of the Closing Escrow Agreement), the Purchaser Indemnitees shall have no further rights to indemnification pursuant to this Article VIII;
(e) notwithstanding anything to the contrary contained in this Agreement or otherwise, the Purchaser Indemnitees shall not be entitled to be indemnified or held harmless under this Agreement (including pursuant to a claim of breach of representation or warranty) for any Taxes (or Losses relating to Taxes) (i) incurred in any tax period other than any tax period ending on or before the Closing Date, (ii) attributable or relating to transactions outside of the ordinary course of business that occur on the Closing Date after the Closing and not contemplated by this Agreement or to actions related to debt incurred in connection with the transactions contemplated by this Agreement, (iii) which are Transfer Taxes for which Purchaser is responsible pursuant to Section 9.4, or (iv) for the existence or non-existence of any Tax attribute;
(f) the maximum Losses indemnifiable pursuant to Section 8.2(b) shall be an amount equal to $6,660,000, except in the case of a breach of any of the covenants set forth in Sections 5.10, 5.11 and 5.12, with respect to which the limitation on liability set forth in this clause (f) shall not apply;
(g) the amount of any and all Losses shall be determined net of (i) any amounts recovered by the Purchaser Indemnitees or Seller Indemnitees, as applicable, under insurance policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses, and (ii) any Tax benefits realizable with respect to such Losses;
(h) the Purchaser Indemnitees shall not be entitled to indemnification pursuant to this Article VIII for any Loss to the extent that such Loss was included in the Buyer Indemnifiable Losses computation of Net Working Capital; and
(i) in any case where a Purchaser Indemnitee recovers, under insurance policies or the Seller Indemnifiable Lossesfrom other collateral sources, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, any amount in respect of a matter for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by which such Purchaser Indemnitee was indemnified pursuant to this Article IV VIII, such Purchaser Indemnitee shall promptly pay over to the Escrow Agent for re-inclusion in no event exceed an aggregate the Closing Escrow Account the amount so recovered (after deducting therefrom the amount of dollars equal any reasonable out-of-pocket, third-party expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (A) any amount previously so paid out of the Closing Escrow Amount to the Indemnity Cap or on behalf of such Purchaser Indemnitee in respect of such matter and (as defined B) any amount expended by Seller or any Seller Indemnitee in Section 4.3(b))pursuing or defending any claim arising out of such matter; provided, however, that in determining whether if such recovery is made after the Release Date, such amounts shall be paid directly to Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; providedprovided further, however, that on the first (1st) anniversary if, as of the Closing Release Date, the Indemnity Cap there shall be reduced toclaims pending against the Escrow Amount, and shall thereafter mean, $7,500,000; and provided further, then only the amount that on the second (2nd) anniversary is so recovered that is in excess of the Closing Date, the Indemnity Cap aggregate amount of all such pending claims shall be reduced to, paid to Seller and the balance shall thereafter mean, zero, unless promptly paid over to the Indemnity Period has been extended until the third (3rd) anniversary of Escrow Agent for re-inclusion in the Closing Date, pursuant to Section 4.2(a), Escrow Account in which case accordance with the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be terms set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)herein.
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Sources: Membership Interest Purchase Agreement (International Shipholding Corp)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000Other than in instances of fraud, and (ii) the term "Indemnity Cap" shall mean $15,000,000; providedintentional misrepresentation, however, that on the first (1st) anniversary or willful misconduct or breach of any of the Closing DateFundamental Representations, the Indemnity Cap no Indemnitee shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary entitled to recover any Losses for breach of the Closing Date, the Indemnity Cap shall be reduced to, representations and shall thereafter mean, zerowarranties of any party contained herein, unless such Indemnified Party's cumulative aggregate claims therefor exceed two hundred thousand dollars ($200,000) (the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a“Basket”)), in which case the Indemnity Cap Indemnitee shall continue be entitled to mean $7,500,000 until the third (3rd) anniversary recover all Losses. Further, other than in instances of fraud, intentional misrepresentation, or willful misconduct or breach of any of the Closing DateFundamental Representations, upon which in no event shall either one of the following conditions take place: (A) the cumulative aggregate liability of the Seller Indemnitors under this Agreement exceed five percent (5%) of the Total Purchase Consideration, allocated between cash and Warrants in the same proportion as the form of consideration paid for the Delivered Purchase Consideration, or (B) the liability of any Seller Indemnitor under this Agreement exceed five percent (5%) of the pro rata portion (calculated based on the proportion of Delivered Purchase Consideration finally determined to be payable (without the possibility of appeal) to or received by such Seller Indemnitor) of the Total Purchase Consideration, allocated between cash and Warrants in the same proportion as the form of consideration paid for the Delivered Purchase Consideration. For each Seller Indemnitor, in the event of a breach of any of the Seller’s Fundamental Representations, or in instances of fraud, intentional misrepresentation, or willful misconduct that are not directly attributable to such Seller Indemnitor, including without limitation, any indemnification obligations of the Seller Indemnitors under clause (iv) of Section 8.02(a) of this Agreement or any indemnification due to a breach of Section 2.04(5) of this Agreement, then the liability of such Seller Indemnitor shall in no event exceed 100% of the consideration that it has received pursuant to the terms of this Agreement and/or the Distribution Agreement. However, in instances of fraud, intentional misrepresentation, or willful misconduct on the part of a Seller Indemnitor that are the direct and proximate cause of Losses to Buyer Indemnitees, then the foregoing limitations on indemnification shall be reduced tonot apply to the liability of only such Seller Indemnitor(s) that are the direct and proximate cause of such Losses of the Buyer Indemnitees. Buyer Indemnitees shall first seek indemnification from the Escrow Fund (as defined in the Escrow Agreement), and shall thereafter meannot seek indemnification from the Seller Indemnitors until the Escrow Fund is exhausted. Case 2:19-cv-02963-MWF-JPR Document 27-2 Filed 07/24/19 Page 50 of 98 Page ID #:677
(ii) Other than in instances of fraud, zero. Notwithstanding intentional misrepresentation, or willful misconduct or breach of any other provision of the Fundamental Representations, in no event shall the cumulative aggregate liability of the Parent and the Buyer under this Agreement or otherwise exceed five percent (5%) of the Total Purchase Consideration.
(iii) The amount of any Loss for which indemnification is provided pursuant to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses this Section 8.02 shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to net of (i) any litigation, existing or threatened, that is required amounts actually recovered by the Indemnitee under any insurance policy with respect to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7such Loss, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation reserves used in connection with the calculation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC Closing Working Capital pursuant to Section 1.12.04.
(iv) Upon makin g an y pa yment t o an Ind emnitee fo r an y indemnification claim pursuant to this Agreement, the Company or any Company Subsidiary on or after the Closing DateIndemnifying Party shall be subrogated, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or extent of such payment, to any Company Subsidiary refers rights which the Indemnitee may have against any third parties with respect to fraud committed on or after the Closing Date)subject matter underlying such indemnification claim and the Indemnitee shall assign any such rights to the Indemnifying Party.
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Limitations on Indemnification. (a) Notwithstanding No claim may be asserted nor may any other provision Action be commenced against a party hereto for breach of this Agreement any representation, warranty, covenant or agreement contained herein, unless written notice of such claim or Action is received by such party describing in reasonable detail (but only to the contrary, extent known at the Parties' obligations pursuant to this Article IV are, time of such notice) the facts and at all times shall be, subject circumstances with respect to the limitations subject matter of such claim or Action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or Action is based ceases to survive as set forth in Section 9.01, irrespective of whether the subject matter of such claim or Action shall have occurred before or after such date.
(b) Notwithstanding anything to the contrary contained in this Section 4.3. The Parties Agreement: (i) the Seller shall not be required liable for any Losses pursuant to indemnifySection 9.02(a), defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, unless and until the aggregate amount of the Buyer Indemnifiable indemnifiable Losses or Seller Indemnifiable Losses, as the case which may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or be recovered from the Seller Indemniteesexceeds an amount equal to 1.5% of the Purchase Price, as whereupon the case may be, only Purchaser shall be entitled to indemnification for the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined such Losses in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice excess of such Buyer Indemnifiable Loss amount; (ii) no Losses may be claimed under Section 9.02(a) or Seller Indemnifiable Loss, as shall be reimburseable by or shall be included in calculating the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used aggregate Losses set forth in this Agreement, clause (i) above other than Losses in excess of $500,000 resulting from any single claim or series of related claims arising out of the term "Indemnity Basket" shall mean $250,000same facts, and events or circumstances; (iiiii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on maximum amount of indemnifiable Losses which may be recovered from the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Seller pursuant to Section 4.2(a), in which case the Indemnity Cap 9.02(a) shall continue be an amount equal to mean $7,500,000 until the third (3rd) anniversary 10% of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date)Purchase Price; in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).and
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Limitations on Indemnification. (a) Notwithstanding any other provision There shall be no liability for Damages for breaches of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, representations and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, warranties unless and until the aggregate amount of all Damages for all claims asserted by the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Indemnified Parties exceeds $100,000 (the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)“Threshold Amount”); provided, howeverthat, that in determining whether after the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or aggregate amount of Damages exceeds the Buyer's liability for a particular Seller Indemnifiable LossThreshold Amount, in either caseall Damages, pursuant to this Article IV is limited except the first $50,000, shall be recoverable by the Indemnity CapIndemnified Parties; provided that, the Parties foregoing limitations shall refer not apply to Fraud Claims or Excluded Claims, and Damages in connection with Fraud Claims and Excluded Claims shall not be counted towards the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofThreshold Amount.
(b) As used in this AgreementThe indemnification obligations of the Shareholders for Damages for breaches of representations and warranties shall be limited to an amount equal to the Deferred Payment (the “General Cap”); provided, that, the foregoing limitation shall not apply to (i) the term "Indemnity Basket" Excluded Claims, which shall mean $250,000, and be limited to an amount equal to the Merger Consideration or (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary Fraud Claims. With respect to any of the Closing Dateitems so excluded from the General Cap pursuant to the preceding sentence, the Indemnity Cap in each case, no Damages incurred in connection with such items shall be reduced to, and counted in determining whether the General Cap in this Section 9.5(b) has been exceeded. No Shareholder shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary have an indemnification obligation in excess of the Closing Dateaggregate amount of the Merger Consideration paid or payable to such Shareholder.
(c) For all purposes of this Article IX (including purposes of determining whether a breach of any representation or warranty has occurred and purposes of determining the amount of Damages arising from any such Breach), the Indemnity Cap all representations and warranties shall be reduced to, treated as if the words “materially,” “in all material respects,” “Material Adverse Effect” or similar words were omitted from such representations and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary warranties. The indemnification obligations of the Closing Date, pursuant to Section 4.2(a), in which case Parties hereto and the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall rights and remedies that may be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses exercised by an Indemnified Party shall not be limited or otherwise affected by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) or as a result of any litigationinformation furnished to, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) any investigation made by or 3.10 knowledge of any of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary Indemnified Parties or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)their Representatives.
Appears in 1 contract
Sources: Merger Agreement (Sourcefire Inc)
Limitations on Indemnification. (a) Notwithstanding The amount of Losses which the Cerberus Indemnitees may recover pursuant to Section 5.2(a) shall be determined net of any other provision amounts actually recovered by the Cerberus Indemnitees under any insurance policies or under any third-party contractual indemnification or rights of this Agreement contribution in connection with respect to the contrarysuch Losses, the Parties' obligations net of any costs or expenses (including Taxes) incurred in connection with such recovery. The Cerberus Indemnitees shall use commercially reasonable efforts to pursue recovery for Losses under any such available insurance policies and/or contractual indemnification or rights of contribution for any Loss for which a Cerberus Indemnitee seeks indemnification pursuant to this Article IV are, and at all times shall be, subject Section 5.7 to the limitations set forth in this Section 4.3. The Parties extent reasonably collectable; provided, that the pursuit of any such recovery shall not be required a condition or prerequisite to indemnifymaking of a claim for indemnification, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemniteesreceipt of indemnification payments, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by under this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof5.7.
(b) As used The Cerberus Indemnitees shall not be entitled to recover any Losses under Section 5.2(a) (other than with respect to the Fundamental Representations) unless the aggregate amount of all such Losses exceeds on a cumulative basis an amount equal to $10,000, at which time the Buyer Parties shall be entitled to recover the full amount of all Losses in this Agreement, excess of $10,000.
(c) In no event shall Shareholders’ aggregate liability under (i) Section 4.5(a) (other than with respect to the term "Indemnity Basket" Fundamental Representations and Special Representations, which shall mean be subject only to the limitation in clause (ii)), collectively, exceed $250,000100,000, and or (ii) the term "Indemnity Cap" shall mean Section 4.5(a) and (b) collectively exceed $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero1,000,000. Notwithstanding any other provision of this Agreement anything herein to the contrary, the Seller's and DQE's there shall be no maximum liability for Shareholders with respect to any actual fraud of Shareholders in connection with this Agreement or the following Buyer Indemnifiable Losses transactions consummated in connection herewith, or with respect to any liability for a breach of the representations in Section 3.1. Notwithstanding anything herein to the contrary, Shareholders shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) liable for any litigationactual fraud of any other Person, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities BVI NewCo 1, BVI NewCo 2 or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed its Subsidiaries prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Closing.
Appears in 1 contract
Sources: Stock Purchase Agreement (Cerberus Cyber Sentinel Corp)
Limitations on Indemnification. (a) Notwithstanding anything to the contrary set forth in this Article VII, the Stockholders shall only be liable to the Buyer Indemnified Parties in respect of any other provision Damages pursuant to Section 7.2(a) of this Agreement only when, and only for any amounts by which, the aggregate amount of all such Damages to which all Buyer Indemnified Parties are entitled to indemnification hereunder exceed $100,000 (the “Indemnity Deductible”), at which point the Stockholders shall be liable only for the amount of Damages in excess of the Indemnity Deductible, provided that, the obligation of the Stockholders to indemnify any Buyer Indemnified Party in respect of any Damages resulting from a breach of any Fundamental Representation or from any Claim based on fraud shall not be subject to, or count against, the Indemnity Deductible.
(b) Notwithstanding anything to the contrarycontrary set forth in this Article VII, the Parties' obligations aggregate liability of the Stockholders for indemnification Claims pursuant to Section 7.2(a) of this Agreement will be limited to $4,000,000 (the “Indemnity Cap”), provided that, the obligation of the Stockholders to indemnify any Buyer Indemnified Party in respect of any Damages resulting from a breach of any Fundamental Representation or from any Claim based on fraud shall not be subject to, or count against, the Indemnity Cap.
(c) Notwithstanding anything to the contrary set forth in this Article IV areVII, and at all times no Stockholder shall bebe liable for Damages under Section 7.2(a) in an amount greater than such Stockholder’s Respective Portion of the Purchase Price, subject to provided that, the limitations limitation set forth in this Section 4.3. The Parties 7.6(c) shall not be required apply to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as such Damages resulting from any Claim based on the case may be, until the aggregate fraud of any such Stockholder.
(d) The amount of the indemnification payable by any Stockholder hereunder to any Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Indemnified Party shall indemnify, defend and hold harmless be reduced by any net cash proceeds actually received by the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only Company with respect to the extent that underlying Claim under any third-party insurance policy maintained by the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable LossesCompany, in either case, effect as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal the Closing and identified on Schedule 4.2(i). Each indemnified Party agrees to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant make any reasonable claim under such insurance policies prior to this Article IV is limited by the Indemnity Cap, the Parties shall refer seeking to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in recover any Damages under this Agreement, provided that, (i) the term "Indemnity Basket" shall mean $250,000an indemnified Party may provide notice to preserve its rights hereunder, and (ii) the term "Indemnity Cap" Buyer shall mean $15,000,000; provided, however, that on the first (1st) anniversary be entitled to retain a portion of the Closing Date, the Indemnity Cap Holdback Amount in accordance with Section 2.2 above until cash proceeds are received under such insurance policies or coverage is denied.
(e) Each Indemnified Party shall be reduced to, take and shall thereafter meancause its Affiliates to take all commercially reasonable steps to mitigate any Damages upon becoming aware of any Claim.
(f) Notwithstanding anything to the contrary in this Agreement, $7,500,000; for purposes of this Article VII, no Indemnified Party will be entitled to recover for any consequential, incidental, indirect, special or punitive damages (including loss of revenue, income or profits, diminution of value or loss of business reputation or opportunity) arising out of or relating to a breach or alleged breach hereof, except to the extent such Indemnified Party is liable to any third Person in respect thereof.
(g) The Buyer acknowledges and provided further, agrees that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap no Stockholder shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding have any other liability under any provision of this Agreement for any Damages to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to extent such Damages result from (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of actions taken by the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary Buyer or any of its Affiliates with respect to the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company License or any Company Subsidiary (provided that Contract entered into by the foregoing reference Buyer or any of its Affiliates with regard to the Company License, or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any the Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)of its Affiliates.
Appears in 1 contract
Sources: Stock Purchase Agreement (Bell Industries Inc /New/)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st1/st/) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd2/nd/) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd3/rd/) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd3/rd/) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Limitations on Indemnification. Rights to indemnification hereunder are subject to the following limitations:
(a) Notwithstanding any other provision of this Agreement Neither Buyer nor Seller shall be entitled to the contraryindemnification hereunder with respect to an Indemnifiable Claim (or, the Parties' obligations pursuant if more than one Indemnifiable Claim is asserted, with respect to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until Indemnifiable Claims) unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims exceeds $25,000 in which even the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined indemnity provided for in Section 4.3(b)), following which the indemnifying Party 8.2 hereof shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, be effective with respect to only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice so much of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, Damages as the case may be, to the Seller as contemplated by Section 4.4 hereofexceeds $25,000.
(b) As used the obligation of indemnify provided herein with respect to the representations and warranties set forth in Section 4.2(h) of this Agreement, Agreement shall terminate on:
(i) the term "Indemnity Basket" shall mean $250,000expiration for the periods of limitations and any extensions thereof applicable to assessment and collection of federal taxes under the Code, and with respect to the representations as to the absence of unpaid or undisclosed federal taxes (including any interests, penalties or expenses) of Seller; and
(ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary expiration of the Closing Dateperiods of limitations and any extensions thereof applicable to assessment and collection of state, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement local or foreign taxes with respect to the contraryrepresentations as to the absence of unpaid or undisclosed state, local or foreign taxes (including any interest, penalties or expenses) of Seller.
(c) The obligation of indemnity provided herein with respect to the Seller's representations and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as warranties set forth in Section 4.5, 4.2(1) shall terminate twenty-five months after the Closing.
(vd) The obligation of indemnity obligations of provided herein with respect to the Seller representations and DQE in respect of certain litigation as warranties set forth in Section 4.6, 4.2(p) as they relate to title shall not terminate.
(vie) The obligation of indemnity obligations of provided herein with respect to the Seller representations and DQE in respect of Environmental Law, as warranties set forth in Section 4.7, and (vii4.2(n) any fraud committed by DQE, of this Agreement shall terminate upon expiration for the Seller, the Company or any Company Subsidiary (provided that the foregoing reference statutes of limitations applicable to the Company or any Company Subsidiary refers to fraud committed prior items contained therein.
(f) The obligation of indemnity provided herein resulting from the assertion of liability with respect to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as representations and warranties set forth in Section 4.54.1 and Section 4.2 (except Section 4.2(h), Section 4.2(l), Section 4.2(p) as they relate to title and Section 4.2(n) of this Agreement) shall terminate two years after the Closing.
(iig) If, prior to the termination of any obligation to indemnify as provided for herein, written notice of a claimed breach is given by the party seeking indemnification including in detail the basis therefore (the "Indemnified Party") to the party from who indemnification is sought (the "Indemnifying Party") or a suit or action based upon a claimed breach is commenced against the Indemnifying Party, the Indemnified Party shall not be precluded from pursuing such claimed breach or violation suit or action, or from recovering from the Indemnifying Party (whether through the courts or otherwise) on the claim, suit or action, by reason of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (termination otherwise provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)for above.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything in Section 8.2 to the contrary, the Parties' obligations no Indemnified Party shall be entitled to be indemnified for any Loss incurred, accrued or sustained by such Indemnified Party as a result of any breach or inaccuracy of a representation or warranty of Seller contained in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, Agreement until the aggregate amount Indemnified Parties, or any of them, have delivered to Seller and the Escrow Agent one or more Claim Certificates identifying Losses incurred, accrued or sustained in excess of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a)Amount, in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing DateIndemnified Parties, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of them, shall be entitled to recover all Losses so identified above the Integrated Assets Basket Amount. Notwithstanding the immediately preceding sentence, Buyer shall be entitled to recover for, and the Basket Amount shall not apply as a threshold to, any Loss incurred, accrued or Integrated Liabilities)sustained by an Indemnified Party arising or resulting from fraud or fraudulent misrepresentation with respect to representations and warranties of Seller contained in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement. Following the Closing, the maximum liability of Seller under this Agreement as a result of any breach or inaccuracy of a representation or warranty of Seller contained in this Agreement or a breach or inaccuracy of a representation or warranty in any certificate, instrument, or other document delivered pursuant to this Agreement, except in the case of intentional, knowing or willful breach of this Agreement, fraud, or similar circumstances, shall not exceed $12,750,000. With regard to item (f) of the first sentence of Section 8.2, (iva) the maximum liability of Seller under this Agreement with regard to such item shall not exceed the Purchase Price and (b) Seller's indemnity obligations for amounts paid in settlement by Indemnified Parties in any final settlement of claims with regard to such item shall not exceed the reasonable settlement amounts incurred, sustained or accrued in connection with such settlement (including, for avoidance of doubt, any legal and other costs in connection therewith)."
(f) The third sentence of SECTION 8.4(A) of the Parties APA is hereby deleted and restated to read in respect of Taxes, its entirety as follows: "Except as set forth in the second to last sentence of Section 4.58.3, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) nothing herein shall prohibit any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC Indemnified Party from seeking recovery pursuant to Section 1.1, 8.2 directly from Seller or its successors for any Losses exceeding the Company or any Company Subsidiary on or after amounts contained in the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Escrow Fund."
Appears in 1 contract
Limitations on Indemnification. (a) The Stockholders shall not be liable to any of the Higher One Indemnified Parties in respect of any claim for indemnification pursuant to Section 5.02(a) made hereby until the aggregate amount of Losses for which all Higher One Indemnified Parties otherwise would be entitled to indemnification under Section 5.02(a), as applicable, exceeds $200,000 (the “Basket”), in which case the Stockholders shall be liable to the Higher One Indemnified Parties hereby for the aggregate amount of all such Losses (and not just the Losses in excess of the Basket) as determined by the provisions of this Article V.
(b) Higher One shall not be liable to any of the Stockholder Indemnified Parties in respect of any claim for indemnification pursuant to Section 5.03(a) made hereby until the aggregate amount of Losses for which the Stockholder Indemnified Parties otherwise would be entitled to indemnification under this Article V exceeds the Basket, in which case Higher One shall be liable to the Stockholder Indemnified Parties hereby for all such Losses (and not just the Losses in excess of the Basket) as determined by the provisions of this Article V.
(c) Neither the maximum, aggregate and joint obligation of the Stockholders to indemnify the Higher One Indemnified Parties from and against Losses resulting from, arising out of or caused by breaches and inaccuracies of representations or warranties pursuant to Section 5.02 of this Agreement, nor the maximum, aggregate obligation of Higher One to indemnify the Stockholder Indemnified Parties from and against Losses resulting from, arising out of, relating to, in the nature of, or caused by breaches and inaccuracies of representations or warranties pursuant to Section 5.03 of this Agreement, shall exceed the sum of $4,500,000 (the “Cap“).
(d) Notwithstanding any other provision of this Agreement herein to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in subclauses (a), (b) and (c) of this Section 4.3. The Parties 5.05 shall not be required apply to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount (i) breaches of the Buyer Indemnifiable representations and warranties contained in Sections 2.01, 2.02, 2.03, 2.06, 2.14, 3.01 and 3.02, (ii) Losses by reason of any claims brought on the basis of fraudulent or Seller Indemnifiable Losseswillful misconduct or intentional misrepresentation, as the case may be, exceeds the Indemnity Basket or (as defined iii) any indemnity obligations set forth in Section 4.3(b)Sections 5.02(b), following which the indemnifying Party shall indemnify5.02(c), defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees5.02(d), as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)5.02(e) and/or 5.03(b); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses each Stockholder shall not be limited by obligated to indemnify the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) Higher One Indemnified Parties for any litigation, existing or threatened, that is required to be set forth amounts in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 excess in the aggregate of such Stockholder’s pro rata share of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed Purchase Price actually received by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)such Stockholder.
Appears in 1 contract
Sources: Stock Purchase Agreement (Higher One Holdings, Inc.)
Limitations on Indemnification. (a) Nothing herein shall limit the liability of the Company for any willful or intentional breach of any representation, warranty or covenant set forth in this Agreement if the transactions contemplated hereby are not consummated.
(b) If the transactions contemplated hereby are consummated, the indemnification provisions set forth in Section 8.2 shall be the sole and exclusive remedy available to the Indemnified Parties for the matters set forth therein (except as otherwise contemplated by Section 8.3(b)), except in the case of fraud, willful breach or intentional misrepresentation (with respect to which such limitation shall not apply).
(c) The Escrowed Cash and Escrowed Stock shall be held as a source of security for the Company Stockholders’ indemnification obligations under Section 8.2(i) – (iv)). If the transactions contemplated hereby are consummated, the maximum amount the Indemnified Parties may recover pursuant to the indemnity set forth in Section 8.2(i) shall be an amount equal to the Escrowed Cash and the Escrowed Stock, except in the case of fraud, willful breach or intentional misrepresentation (with respect to which such limitation shall not apply). Notwithstanding the foregoing, in cases of breaches of any of the Specified Representations or a claim under Section 8.2(v), in no event shall the Indemnified Parties be entitled to recover from any Company Stockholder pursuant to any indemnity hereunder an amount in excess of the aggregate proceeds actually received hereunder by such Company Stockholder in connection with the disposition of their Company Capital Stock (less the aggregate amount of all other provision indemnity recoveries made against such Company Stockholder under the terms of this Agreement).
(d) If the transactions contemplated hereby are consummated, the Indemnified Parties may not recover pursuant to the indemnity set forth in Section 8.2(i) or Section 8.2(v) unless and until one or more Officer’s Certificates identifying Losses in excess of One Hundred Twenty Thousand Dollars ($120,000) in the aggregate (the “Basket”) has or have been delivered to the Stockholder Representative in accordance with this Agreement, in which case Parent shall be entitled to recover pursuant to the indemnity set forth in Section 8.2(i) all such Losses; provided, however, that the foregoing Basket limitation shall not apply to indemnification claims under Section 8.2(i) that arise out of (X) any breach or inaccuracy of one or more of the Specified Representations (other than claims arising out of a breach or inaccuracy of Section 3.10 (Tax Matters) which shall have the benefit of the Basket as shall any claim under Section 8.2(v)), (Y) any Losses in respect of or in any way related to or arising out of the employment (including, without limitation, the termination of such employment) of the former Employees identified on Schedule 8.3(d).
(e) Within forty-five (45) days following the Closing Date, Parent may, at its election, cause to be prepared and delivered to the Stockholder Representative an unaudited balance sheet of the Surviving Entity, as of the Closing Date applying the same principles and assumptions used in preparing the Current Balance Sheet (the “Closing Balance Sheet”). Any indemnification claims based on the difference between the Closing Balance Sheet and the Current Balance Sheet shall be governed by the terms and procedures of this Section 8.3(e).
(i) In the event that the Net Asset Value based on the Closing Balance Sheet is less than negative $1,445,592 (such an amount is equal to the sum of (A) $125,000 plus (B) $1,320,592 (which represents the negative Net Asset Value as set forth in the Current Balance Sheet), then an amount equal to such difference (such amount, the “Post-Closing Balance Sheet Adjustment”) shall be paid to Parent out of the Escrow Fund in accordance with the expedited dispute resolution procedures set forth below.
(ii) Subject to the expedited dispute resolution procedures set forth below, if the Post-Closing Balance Sheet Adjustment exceeds the amount in the Escrow Fund, Parent shall be entitled to recover directly from the Company Stockholders any amount of the Post-Closing Balance Sheet Adjustment not covered by the Escrow Fund.
(iii) The parties acknowledge that the Post-Closing Balance Sheet Adjustment is not intended to result in any double-counting for purposes of the other indemnification obligations of the Company Stockholders pursuant to Article VIII of this Agreement and therefore no items taken into account for purposes of compiling the Closing Balance Sheet and calculating Post-Closing Balance Sheet Adjustments shall be treated as valid indemnification items hereunder.
(iv) Following delivery by Parent to the Stockholder Representative of the Closing Balance Sheet, Parent shall give the Stockholder Representative reasonable access during Parent’s business hours to those books and records of the Surviving Corporation in the possession of Parent and any personnel which relate to the preparation of the Closing Balance Sheet for purposes of resolving any disputes concerning the Closing Balance Sheet and the calculation of the Net Asset Value at Closing.
(v) The Stockholder Representative shall have ten (10) days following delivery of the Closing Balance Sheet during which to notify Parent in writing (the “Notice of Objection”) of any good faith objections to the calculation of the Net Asset Value at Closing or the Closing Balance Sheet, as it affects such calculation, setting forth a reasonably specific and detailed description of its objections and the dollar amount of each objection.
(vi) If the Stockholder Representative objects to the Closing Balance Sheet or Parent’s calculation of the Net Asset Value at Closing as reflected thereon, Parent and the Stockholder Representative shall attempt to resolve any such objections within ten (10) days of the receipt by Parent of the Notice of Objection. If Parent and the Stockholder Representative are unable to resolve any such dispute within the ten (10) day period referred to above, Parent and the Stockholder Representative shall submit the dispute to mutually agreeable independent registered public accounting firm (the “Independent Accounting Firm”). Each of the parties to this Agreement shall, and shall cause their respective affiliates and representatives to, provide full cooperation to the Independent Accounting Firm. The Independent Accounting Firm shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent and the Stockholder Representative submit any dispute to the Independent Accounting Firm, each such party may submit a “position paper” to the Independent Accounting Firm setting forth the position of such party with respect to such dispute, to be considered by such Independent Accounting Firm as it deems fit. Each of Parent and the Stockholder Representative shall bear their own respective costs in connection with this Section 8.3(e)(vi). The expenses relating to the engagement of the Independent Accounting Firm shall be split equally between Parent and the Stockholder Representative; provided, however, that if the position of either such party is more than 10% different from the conclusion reached by the Independent Accounting Firm (or if both parties positions are more than 10% different, then the party whose variance is the highest from the conclusion of the Independent Accounting Firm), then such party shall bear all of the expenses of the Independent Accounting Firm, all reasonable costs incurred by the Independent Accounting Firm, and notwithstanding anything else in this Section 8.3(e)(vi) or in this Agreement to the contrary, the Parties' obligations costs and expenses of the other party incurred with respect to this Section 8.3(e)(vi).
(vii) If the Stockholder Representative does not deliver a Notice of Objection in accordance with the terms of Section 8.3(e)(v), the Closing Balance Sheet (together with Parent’s calculation of the Net Asset Value at Closing reflected thereon), shall be deemed to have been accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions above and Parent and the Stockholder Representative are able to resolve such dispute by mutual agreement, the Closing Balance Sheet, together with Parent’s calculation of the Net Asset Value at Closing reflected thereon, to the extent modified by mutual agreement of such parties, shall be deemed to have been accepted by all of the parties to this Agreement.
(viii) In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Accounting Firm shall be final and binding on the parties, and the Closing Balance Sheet, together with Parent’s calculation of the Net Asset Value at Closing reflected thereon, to the extent modified by the Independent Accounting Firm, shall be deemed to have been accepted by all of the parties to this Agreement. Subject to the foregoing provisions, the calculation of the Net Asset Value at Closing reflected on any such Closing Balance Sheet shall be conclusive and binding on all of the parties to this Agreement, no further adjustments shall be made thereto and neither Parent, the Stockholder Representative nor the Company Stockholders shall have any further right to challenge such calculation of the Net Asset Value at Closing, whether pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth terms of Section 8.3 or otherwise.
(f) Nothing in this Section 4.3. The Parties Agreement shall limit the liability of the Company Stockholders (and the indemnification shall not be required to indemnifythe exclusive remedy) in respect of any Losses arising out of any fraud, defend willful breach or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofintentional misrepresentation.
(bg) As used It is understood that nothing in this Agreement shall eliminate the ability of any party hereto to apply for equitable remedies to enforce the other parties’ obligations under this Agreement.
(h) Notwithstanding anything to the contrary in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, parties hereto agree and (ii) acknowledge that any Indemnified Party may bring a claim for indemnification for any Loss under this Article VIII notwithstanding the term "Indemnity Cap" shall mean $15,000,000; provided, however, fact that on the first (1st) anniversary any Indemnified Party had knowledge of the Closing Datebreach, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant event or circumstance giving rise to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed such Loss prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating or waived any condition to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)related thereto.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Sumtotal Systems Inc)
Limitations on Indemnification. (ai) Notwithstanding any 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 provision provisions of this Agreement to Section 11) from the contrarySeller or C▇▇▇▇ for all such Losses incurred by ATP Indemnified Persons in excess of such $50,000 deductible. Notwithstanding the foregoing, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties 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).
(ii) No Seller Indemnified Person shall be required entitled to indemnifyindemnification pursuant to Section 11(a)(ii), defend 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 hold harmless any Buyer Indemnitee pursuant to Section 11(a)(ii)(ii).
(iii) No Party shall be entitled to indemnification pursuant to Section 11(a)(i)(i) or Seller IndemniteeSection 11(a)(ii)(i), as the case may be, unless the party seeking indemnification notifies the other party of a claim specifying the factual basis of the claim in reasonable detail on or before the fifth (5th) anniversary of the initial Closing hereunder, in which case, the survival period shall continue until such claim is fully resolved.
(iv) Except as set forth in (vi) and (vii) below, the maximum aggregate liability of the Seller to ATP and ATP Indemnified Persons for indemnification under Section 11(a)(i)(i) of this Agreement shall not exceed the sum of (A) the aggregate Base Purchase Price paid for the Assigned CDO Agreements, (B) the amount of the Buyer Indemnifiable Service Fees and (C) the aggregate of Losses that constitute out-of-pocket costs of such ATP Indemnified Persons.
(v) Except as set forth in (vi) and (vii) below, the maximum aggregate liability of C▇▇▇▇ to ATP and ATP Indemnified Persons for indemnification under Section 11(a)(i) of this Agreement shall not 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 Indemnifiable Losses, and C▇▇▇▇ to ATP and ATP Indemnified Persons if this Agreement is terminated by ATP and the transactions contemplated hereby are abandoned as the case may be, exceeds the Indemnity Basket (as defined described in Section 4.3(b))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) ATP and ATP Indemnified Persons shall not be entitled to indemnification in connection with a claim under Section 11(a)(i)(iv) of this Agreement, if such Loss arises out of or relates to a change, following which a Closing Date, by ATP or in the indemnifying Party shall indemnifybusiness of managing the Assigned CDO Agreements or a change, defend and hold harmless following a Closing Date, by ATP in the Buyer Indemnitees United States federal income tax reporting positions heretofore taken by or on behalf of the Seller IndemniteesIssuer or Issuers, as the case may bein question, but only to the extent that such change in operations or reporting is not required or permitted under the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofAssigned CDO Agreements.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Any indemnification claims by the Indemnified Party pursuant to Section 11.2 shall be paid with the Holdback Shares. With respect to any such indemnification payment, for purpose of determining the indemnification payment, the Holdback Shares shall be valued at $10.10 per share, regardless of the trading price of the Holdback Shares at the time that the indemnification claim is finally determined in accordance with this Article XI.
(b) Except in the case of Fraud by the Company and/or any Principal Shareholder, the sole and exclusive recourse for any amount finally determined to be owed in respect of any indemnity obligations pursuant to this Article XI shall be made only by transfer of Holdback Shares to the Indemnified Parties, no other assets shall in any respect be used to satisfy such indemnity obligations, and once the Holdback Shares shall be fully released and transferred, such indemnity obligations shall terminate. For successful indemnification claims by an Indemnified Party, within five (5) Business Days after the indemnification claim is finally determined in accordance with this Article XI, PubCo shall retain a number of Holdback Shares, valued at $10.10 per share, equal to the amount of such indemnification claim (as determined in accordance with this Article XI).
(c) In the event Parent Parties proceed with the Closing notwithstanding actual knowledge by Parent Parties or any Affiliate of Parent Parties at or prior to the Closing (as evidenced in a writing, either from the Company to Parent Parties or from Parent Parties to the Company) of any breach by the Company or any Principal Shareholder of any representation, warranty, covenant or agreement in Article V or in any certificate or Additional Agreement delivered by the Company pursuant hereto, no Indemnified Party shall have any claim or recourse against any Shareholder or the Holdback Shares with respect to such breach, under this Article XI or otherwise.
(d) In no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall Losses be deemed to include, any punitive, special, incidental, exemplary, consequential, indirect or exemplary damages, or for any diminution in value changes measured as a multiple of earnings, revenue or by any other provision similar performance metric, (including loss of this Agreement future revenue or income, loss of business reputation or opportunity), except for any such damages to the extent actually awarded by a court of competent jurisdiction and paid to a third party in a Third Party Claim (as defined below).
(e) Any Losses recoverable hereunder shall be reduced in amount by insurance proceeds, indemnification payments, contribution payments or reimbursements or any Tax benefits or reduction actually received by any Indemnified Party in connection with, or as a result of, such Losses, and the Indemnified Parties shall use reasonable and diligent efforts to realize such benefits, proceeds, payments, reimbursements or reductions.
(f) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the extent reasonably necessary to remedy the breach that gives rise to such Loss.
(g) Notwithstanding anything to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Indemnified Parties shall be deemed not be required to indemnifyhave suffered any Losses (whether in contract, defend tort or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only otherwise) to the extent that the Buyer Indemnifiable such Losses (i) are accrued, provided or the Seller Indemnifiable Lossesreserved for, as the case may be, exceed the Indemnity Basket. In additionor otherwise reflected or taken into account in, the Seller's and DQE's liabilityFinancial Statements, taken togetheror (ii) arise out of changes after the Closing Date in accounting principles or applicable Laws, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss rules or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is regulations or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofinterpretations thereof.
(bh) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses An Indemnified Party shall not be limited by entitled to damages or other payment from the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (Shareholders in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, claims concerning the Company or any Company Subsidiary (provided that the foregoing reference under or in relation to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to this Agreement if (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, any such claim is less than $188,000 or (ii) any breach or violation the aggregate of any Environmental Law by PSCall such claims permitted under (i) is less than $1,880,000, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, after which the Company or any Company Subsidiary on or after Shareholders shall be liable for the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)full amount of its indemnification Liabilities.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Kairous Acquisition Corp. LTD)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller Group shall not be required obligated to indemnify, defend indemnify or hold harmless the Parent Indemnitees in respect of any Buyer Indemnitee Losses suffered, incurred or Seller Indemnitee, as sustained by the case may beParent Indemnitees under Section 7.02(a)(i), until such Losses equal or exceed $25,000 in the aggregate (the “Threshold”) (at which point the Seller Group will be obligated to indemnify the Parent Indemnitees for the amount of such Losses from the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend first dollar) and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as Group shall not be obligated to indemnify the case may be, only to Parent Indemnitees for the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to any Losses as a result of any breach or breaches under Section 7.02(a) in excess of $800,000 (the Indemnity Cap (as defined in Section 4.3(b)“Cap”); provided, however, that the Threshold and Cap shall not apply to any Losses resulting from (i) fraud on the part of the any member of the Seller Group with respect to which the Seller Group’s obligation to indemnify the Parent Indemnitees shall not be limited, or (ii) any breach of or inaccuracy in determining whether any of the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or Fundamental Representations, with respect to which the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant Group’s obligation to this Article IV is indemnify the Parent Indemnitees shall be limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofPurchase Price.
(b) As used The Parent shall not be obligated to indemnify or hold harmless the Seller Group Indemnitees in this Agreementrespect of any Losses suffered, (iincurred or sustained by all the Seller Group Indemnitees under Section 7.03(a) in excess of the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that the Cap shall not apply to any Losses resulting from (i) fraud on the first (1st) anniversary part of the Closing Date, Parent or the Indemnity Cap shall be reduced to, Buyer with respect to which the Parent’s and shall thereafter mean, $7,500,000; and provided further, that on Buyer’s obligation to indemnify the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses Seller Group Indemnitees shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach of or violation inaccuracy in any of any Environmental Law by PSCthe Parent Fundamental Representations, Acquisition, any Buyer Subsidiary designated by PSC pursuant with respect to Section 1.1, which the Company or any Company Subsidiary on or after Parent’s and the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant Buyer’s obligations to Section 1.1, indemnify the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Seller Group Indemnitees shall not be limited.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding Subject to Section 10.6(b) and Section 10.6(c), (i) the aggregate amount of Damages that the S&W Indemnified Parties, collectively, shall be entitled to recover against Shell under Section 10.2 with respect to breaches of any other provision of (A) Fundamental Shell Representations in this Agreement to the contrary, the Parties' obligations pursuant to this Article IV areshall not exceed [***], and at all times (B) other representation or warranty of Shell in this Agreement shall benot exceed [***], subject and (ii) the aggregate amount of Damages that the Shell Indemnified Parties shall be entitled to recover against S&W under Section 10.3 with respect to breaches of any (A) Fundamental S&W Representations in this Agreement shall not exceed an amount equal to [***], and (B) other representation or warranty of S&W in this Agreement (including in respect of the Company) shall not exceed [***]. For clarity, the limitations set forth in this Section 4.3. The Parties 10.6(a) shall not apply to any Damages that an indemnified party may suffer or incur as a result of the breach of any post-Closing covenant of a Party under this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, in determining the amount of indemnifiable damages or losses resulting from any breach of any representation or warranty hereunder, for purposes of this Article X, any materiality qualifiers (including “Material Adverse Effect”, “materially adverse”, and similar qualifiers) in such representation and warranty shall be disregarded, but any such qualifiers shall not be required disregarded and shall apply in determining whether a breach of any such representation or warranty has occurred.
(c) Notwithstanding anything in this Agreement to indemnifythe contrary, defend in no event will the limitations set forth in this Section 10.6 apply in the event of Fraud.
(d) Notwithstanding anything to the contrary herein, the Parties shall have a duty to use commercially reasonable efforts to mitigate any Damages arising out of or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees relating to this Agreement or the Seller IndemniteesTransactions, as the case may be, only and (ii) no Party will have any liability to any indemnified party with respect to any Damages if and to the extent that any such Damages are reduced by any insurance or other third party payments received by the Buyer Indemnifiable Losses relevant indemnified party(ies).
(e) Unless otherwise provided herein, any payment obligation of Shell or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by S&W under this Article IV X shall in no event exceed an aggregate amount be effected by wire transfer of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss immediately available funds from Shell or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable LossS&W, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited an account designated by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing applicable Shell Indemnified Party or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of TaxesS&W Indemnified Party, as set forth in Section 4.5the case may be, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or within [***] after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)determination thereof.
Appears in 1 contract
Sources: Contribution and Membership Interest Purchase Agreement (S&W Seed Co)
Limitations on Indemnification. (a) Notwithstanding AmPaM shall not assert any other provision of claim for indemnification under this Agreement Section 11 against the Stockholders until such time as, and solely to the contraryextent that, the Parties' obligations aggregate of all claims which AmPaM may have against the Stockholders shall exceed the greater of (a) 3.0% of the sum of (i) the cash paid to the Stockholders pursuant to this Article IV are, and at all times shall be, subject Section 1.2 plus (ii) the value of the AmPaM Stock delivered to the limitations set forth Stockholders pursuant to Section 1.2 (calculated as provided in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as 11.5) plus (iii) the case may be, until the aggregate principal amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, AmPaM Notes delivered to the Stockholders pursuant to Section 1.2 (iv) plus the value of the AmPaM Series A Preferred Stock delivered to the Stockholders pursuant to Section 1.2 (calculated as the case may be, exceeds the Indemnity Basket (as defined provided in this Section 4.3(b)11.5), following which or (b) $50,000 (the indemnifying Party "Indemnification Threshold"). Stockholders shall indemnifynot assert any claim for indemnification hereunder against AmPaM until such time as, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only solely to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionthat, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV aggregate of all claims which Stockholders may have against AmPaM shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))$50,000; provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses sentence shall not be limited applicable with respect of any failure by the Indemnity Cap: Buyer Indemnifiable Losses relating AmPaM to (i) any litigationdeliver the consideration specified in Annex I hereto on the Closing Date upon the satisfaction, existing or threatenedwaiver by AmPaM, that is required of all conditions to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 the occurrence of the Seller Disclosure Schedule, Closing Date specified in Section 9 or (ii) Excluded Assets, (iii) any and all liabilities and comply with its obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.110.1. After the $50,000 threshold for AmPaM (subject to the proviso in the preceding sentence) or the Indemnification Threshold for a Stockholder has been met, all claims must be made in $10,000 increments, which claims may be cumulated in order to meet such $10,000 thresholds. For purposes of this paragraph, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference AmPaM Stock delivered to the Company or any Company Subsidiary refers Stockholders shall be valued at $13.00 per share and the AmPaM Series A Preferred Stock delivered to fraud committed on or after the Closing Date)Stockholders shall have a stated value of $13.00 per share.
Appears in 1 contract
Sources: Acquisition Agreement (Miller Mechanical Contractors Inc)
Limitations on Indemnification. (a) Notwithstanding Seller shall have no liability for indemnification or otherwise with respect to any other provision of this Agreement the matters described in Section 7.1(a) or (b) hereof until the total of all Losses with respect to such matters exceeds the contrary, sum of ten thousand dollars ($10,000.00) (the Parties' obligations pursuant to this Article IV are"Basket Amount"), and at all times then only for the amount by which such Losses exceed such Basket Amount. This limitation on liability for indemnification shall benot apply with respect to indemnification by Seller (i) on account of any breach of Section 6.1 or 6.2 hereof, subject (ii) on account of any breach of Section 4.12(e), 6.6 or 6.8(a) or (b) hereof, and any sums paid or payable by Seller to Buyer or HMG on account of any of the limitations matters set forth in this Section 4.3. The Parties the foregoing clauses (i), (ii) or (iii) shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that included in determining whether the Basket Amount has been reached or exceeded. Seller's and DQE's liability for a particular the Excluded Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties Liabilities shall refer not be subject to the Indemnity Cap that is Basket Amount and shall not be included in determining whether the Basket Amount has been reached or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofexceeded.
(b) As used Neither Buyer nor HMG shall have any liability for indemnification or otherwise with respect to the matters described in this Agreement, Section 7.2(a) or (ib) hereof until the term "Indemnity Basket" shall mean $250,000total of all Losses with respect to such matters exceeds the Basket Amount, and (ii) then only for the term "Indemnity Cap" amount by which such Losses exceed the Basket Amount. This limitation on liability for indemnification shall mean $15,000,000; provided, however, that not apply with respect to indemnification by Buyer and/or HMG on account of a breach of Section 6.6 hereof or the first (1st) anniversary amount of the Closing Date, the Indemnity Cap shall be reduced toMaximum Sales Tax Liability assumed by either of them as provided in Section 4.12(e) hereof, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, any sums paid or payable by Buyer or HMG to Seller pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rdSections 4.12(e) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses or 6.6 hereof shall not be limited by included in determining whether the Indemnity Cap: Buyer Indemnifiable Losses relating to Basket Amount has been reached or exceeded.
(ic) any litigation, existing or threatened, that is required to be Except as otherwise set forth in Sections 3.7Section 7.5 hereof or elsewhere in this Article VII, 3.8(athe maximum aggregate amount of Losses that any Indemnified Party may recover hereunder pursuant to the provisions of this Article VII shall be equal to the Purchase Price; for purposes of this Section 7.4 (c), 3.8(b), 3.9(ithe Purchase Price shall be equal to the fair market value (as defined below) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇Registrable Shares to be delivered to ▇▇▇▇ at Closing. The fair market value of the Registrable Shares shall be derived by multiplying 300,000 by the closing bid price per share of HMG Stock on the business day immediately preceding the Closing Date.
(d) No party shall be liable to any other party or any Company Subsidiary or to any of the Integrated Assets Seller Indemnitees or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference Buyer Indemnitees for punitive damages except to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's extent that liability for the following Seller Indemnifiable Losses shall not be limited by same is incurred as the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation result of any Environmental Law by PSC, Acquisition, Claim of any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)third party.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement Anything in Section 11.1 to the contrarycontrary notwithstanding, the Parties' obligations no indemnification payment shall be made pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only 11.1 except to the extent that the Buyer Indemnifiable Losses or amounts that would otherwise be payable under Section 11.1 taken together would aggregate at least DM2,400,000 (the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)"Minimum Amount"); provided, however, that the foregoing exception shall not apply to indemnification in respect of any breach of the representations and warranties contained in Sections 3.13, 3.16 or Article 4 or any indemnification pursuant to clauses (y) or (z) of Section 11.
1. Notwithstanding anything to the contrary contained herein, any Loss in respect of indemnification pursuant to clause (x) of Section 11.1 that is less than DM25,000 shall not be counted when determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000Minimum Amount has been reached; provided, however, that on the first full amount of any Loss in respect of indemnification pursuant to clause (1stx) anniversary of Section 11.1 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) shall be payable by the Sellers until the amounts paid by the Sellers shall equal DM100 million (the "Maximum Amount"); provided, however, that the Maximum Amount shall be increased by 50% of the Closing Date, amount of any Purchase Price adjustment paid to the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Sellers pursuant to Section 4.2(a)1.5 of this Agreement. For purposes of this Article 11, in which case the Indemnity Cap shall continue amount of any Loss and the amount of any indemnification payment to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it be made by any party shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to determined (i) without deducting therefrom any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 Tax benefit obtained following the date hereof by reason of the Seller Disclosure Scheduledeductibility for Tax purposes of any damage, loss or payment giving rise to any such Loss or indemnification payment, (ii) Excluded Assetswithout 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) any and all in case an Indemnifying Party is liable to indemnify an NFO Indemnified Party from Tax liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed 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 Buyer's liability for amount of any Loss and the following Seller Indemnifiable Losses amount of any indemnification payment to be made by any party shall not be limited determined by the Indemnity Cap: Seller Indemnifiable Losses relating to deducting therefrom (i) indemnity obligations any insurance payment received after the date hereof which results from the event, circumstance or state of facts causing the Parties in respect of Taxes, as set forth in Section 4.5, Loss and (ii) any breach indemnification payment received from a third party which results from the event, circumstance or violation state of facts causing the Loss; provided, however, that in each case such deductions from indemnification payments in respect of insurance 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 received by the insured or indemnified party shall they be reimbursed to the indemnifying party. Notwithstanding anything to the contrary contained herein, no Indemnitee shall be entitled to recover any amount in excess of any Environmental Law by PSCLoss that it actually suffers, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company regardless of whether one or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)multiple guarantees have been breached.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Section 8.2 and Section 8.3 is subject to the following limitations:
(a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required liable to indemnify, defend or hold harmless the Purchaser Indemnified Parties for any Buyer Indemnitee or Seller Indemnitee, as Losses with respect to the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined matters described in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable 8.2(a) unless such Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to $20,000 (the Indemnity Cap (as defined “Threshold Amount”) and Seller’s total liability to the Purchaser Indemnified Parties for any Losses with respect to the matters described in Section 4.3(b)); provided8.2(a) shall not exceed the Cap. Once the Threshold Amount is met, howeverSeller shall then be liable to the Purchaser Indemnified Parties for all Losses, that in determining whether including the Seller's Threshold Amount. The Threshold Amount and DQE's liability for a particular Buyer Indemnifiable Loss the Cap shall not apply to Losses resulting from, arising out of or related to any breach or inaccuracy of any Seller Fundamental Representation, Tax Claim, IP Claim or any fraud by Seller or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofCompany.
(b) As used Purchaser shall not be liable to Seller for any Losses with respect to the matters described in this AgreementSection 8.3(a) unless such Losses exceed an aggregate amount equal to the Threshold Amount and Purchaser’s total liability to Seller for any Losses with respect to the matters described in Section 8.3(a) shall not exceed the Cap. Once the Threshold Amount is met, (i) Purchaser shall then be liable to Seller for all Losses, including the term "Indemnity Basket" shall mean $250,000, Threshold Amount. The Threshold Amount and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced tonot apply to Losses resulting from, and shall thereafter mean, $7,500,000; and provided further, that on the second arising out of or related to any breach or inaccuracy of any Purchaser Fundamental Representation or any fraud by Purchaser.
(2ndc) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Payments by an Indemnifying Party pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing 8.2 or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (Section 8.3 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds (less the sum of any out all costs and expenses incurred in recovering such insurance proceeds and any increased premiums related to or arising out of such claim) and any indemnity, contribution or other similar payment received by the Indemnified Party (or the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxesany such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) contribution or other similar agreements for any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed Losses prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)seeking indemnification under this Agreement.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Genasys Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' parties’ obligations pursuant to this Article IV IX are, and at all times shall be, subject to the limitations set forth in this Section 4.39.3. The Parties parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate dollar amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, as determined by taking into account all Indemnifiable Losses (except for Indemnified Losses to which the Indemnity Cap does not apply) asserted against or suffered by the Buyer Indemnitees or the Seller Indemnitees, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b9.3(b)), following which the indemnifying Party party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the aggregate amount of Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed exceeds the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, ’s liability for Buyer Indemnifiable Losses and the Buyer's ’s liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV IX, shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b9.3(b)); provided, however, that (i) in determining whether the Seller's and DQE's ’s liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant Losses exceeds an aggregate amount of dollars equal to this Article IV is limited by the Indemnity Cap, the Parties parties shall refer to include in such aggregate amount of dollars the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemniteeamount, as the case may beif any, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's ’s liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇H▇▇▇▇▇▇ or any Company Subsidiary or any Claims, if any, and (ii) in determining whether the Buyer’s liability for Seller Indemnifiable Losses exceeds an aggregate amount of dollars equal to the Indemnity Cap, the parties shall include in such aggregate amount of dollars the amount, if any, of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties Buyer’s liability for Seller Indemnifiable Losses in respect of Taxesthe COBRA Claims, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)if any.
Appears in 1 contract
Sources: LLC Purchase Agreement (Dqe Inc)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement herein to the contrary, (i) Seller shall not be responsible pursuant to Section 11.2(a)(i)(x) for Losses based upon, resulting from or arising out of the Parties' obligations breach or inaccuracy of representations and warranties made by Seller pursuant to this Article IV are, and at all times shall be, subject Agreement (other than the Specified Representations) (for which purposes Losses with respect to the limitations set forth in this Section 4.3. The Parties shall not related matters will be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, aggregated) until the cumulative aggregate amount of the Buyer Indemnifiable Losses with respect to such matter or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees related matters or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary matters arising out of the Closing Date, same facts or circumstances exceeds $25,000 (the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a“Threshold Amount”), in which case the Indemnity Cap amount of all such Losses (without regard to the Threshold Amount) shall continue be included for purposes of computing the Losses that are indemnifiable hereunder and applicable against the Basket Amount pursuant to mean $7,500,000 clause (ii) below, and (ii) Seller shall not be required to indemnify Purchaser Indemnified Parties under Section 11.2(a)(i)(x) for Losses of the Purchaser Indemnified Parties based upon, resulting from or arising out of the breach or inaccuracy of representations and warranties made by Seller pursuant to this Agreement (other than the Specified Representations) until the third (3rd) anniversary aggregate amount of all such Losses of the Closing DatePurchaser Indemnified Parties for which indemnification would otherwise be available under Section 11.2(a)(i)(x) exceeds $1,500,000 (the “Basket Amount”), upon after which it shall Seller will be reduced to, and shall thereafter mean, zero. obligated to indemnify Purchaser Indemnified Parties for only that portion of such Losses that exceed the Basket Amount.
(b) Notwithstanding any other provision of this Agreement herein to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigationthe cumulative aggregate indemnity obligations of Seller under Section 11.2(a)(i)(x) for Losses based upon, existing resulting from or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 arising out of the breach or inaccuracy of representations and warranties made by Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller pursuant to this Agreement (other than the Specified Representations) shall in no event exceed $26,875,000.
(c) In no event shall either party be liable to the other for any liabilities special, exemplary, punitive (whether arising under contract or obligations of the Seller (in respect of the Companytort, or any other legal theory), Utilityincidental or consequential damages, Developmentincluding economic loss, ▇▇▇▇▇▇▇▇ lost profits or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities)business interruption, (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference except to the Company extent such damages constitute Retained Liabilities (if the Indemnifying Party is Seller) or any Company Subsidiary refers Assumed Liabilities (if the Indemnifying Party is Purchaser) and are payable by an Indemnified Party to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)a third party.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding the foregoing provisions of Section 11.1, (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required to indemnify, defend indemnify Buyer or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until Buyer-Related Entities under this Agreement unless the aggregate amount of the Buyer Indemnifiable Losses or all amounts for which an indemnity would otherwise be payable by Seller Indemnifiable Losses, as the case may be, under Section 11.1 exceeds the Indemnity Basket Limitation, (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall b) in no event exceed an aggregate amount shall the liability of dollars equal Seller with respect to the Indemnity Cap (as defined indemnification provided for in Section 4.3(b)); provided, however, 11.1 exceed in the aggregate the Cap Limitation (provided that in determining whether Seller’s obligations under Article X with respect to prorations and adjustments and Seller’s obligations under Section 14.2 with respect to Brokers shall not be subject to the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss Basket Limitation or the Cap Limitation), (c) in the event Buyer obtains actual knowledge of any inaccuracy or breach of any representation, warranty, or covenant of Seller contained in this Agreement (a “Buyer Waived Breach”) after the Effective Date but prior to the Closing, and nonetheless proceeds with and consummates the Closing, then Buyer and any Buyer's liability -Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for a particular Seller Indemnifiable Loss, in either case, pursuant to indemnification under this Article IV is limited by the Indemnity CapXI for, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee any other claim or Seller Indemnitee, as the case may be, delivered a written notice cause of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in action under this Agreement, (i) the term "Indemnity Basket" at law or in equity on account of any such Buyer Waived Breach. In no event shall mean $250,000Buyer be entitled to seek or obtain consequential, and (ii) the term "Indemnity Cap" special, punitive or exemplary damages against Seller. In no event shall mean $15,000,000; providedSeller be entitled to seek or obtain consequential, howeverspecial, that on the first (1st) anniversary punitive or exemplary damages against Buyer. Solely for purposes of the Closing Datethis Article 11, the Indemnity Cap references to “actual knowledge” or words of similar import shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant deemed to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement refer solely to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 actual knowledge of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ on behalf of Buyer and shall not include any obligation of further inquiry or investigation, nor any knowledge which could or should have been obtained, or matter which might be deemed to be known to such person, by virtue of constructive notice, inquiry notice, or any Company Subsidiary other form of notice or any duty of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)investigation.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Glimcher Realty Trust)
Limitations on Indemnification. (a) Notwithstanding any other provision If the Merger is consummated, claims against ▇▇▇▇▇ under Section 9.02(a) or against the Effective Time Holders under Section 9.02(b), as the case may be, shall be limited as follows:
(i) Recovery from the Escrow Fund shall be the sole and exclusive remedy for the indemnity obligations under Section 9.02(a)(i) or (ii) of this Agreement Agreement, except for claims arising out of, resulting from or in connection with any failure of any of the Fundamental Representations to be true and correct.
(ii) With respect to indemnity obligations under Section 9.02(b)(ii) (breaches of covenants):
(A) The Effective Time Holders shall have liability for such breaches; provided however, the Effective Time Holders shall have no liability for such breaches of covenants if Parent had actual knowledge of the covenant breach (or became aware of facts that, after reasonable inquiry, Parent should have had actual knowledge of the covenant breach) and did not provide written notice to the contraryHolders’ Agent of such covenant breach, with reasonable detail, within five (5) Business Days after the date on which Parent obtained such actual knowledge or should have obtained such knowledge, as the case may be. If such written notice is timely provided to the Holders’ Agent, the Parties' obligations pursuant Effective Time Holders shall have a reasonable opportunity to this Article IV arecure such breach (if susceptible to cure) which shall not exceed thirty (30) Business Days, and at if the Effective Time Holders fail to cure such breach, the Effective Time Holders shall remain liable for such breach. Notwithstanding anything herein to the contrary and except as set forth below in Section 9.03(a)(ii)(B), in no event shall the Effective Time Holders be liable for Indemnifiable Damages resulting from Section 9.02(b)(ii) (breaches of covenants) in an amount greater than thirty-five percent (35%) of the Aggregate Merger Consideration received by all times Effective Time Holders, subject to Section 9.03(b) below;
(B) The limitation in Section 9.03(a)(ii)(A) above shall benot apply with respect to breaches of Section 7.05 (exclusivity; solicitation), and accordingly, after Indemnified Persons have exhausted or made claims against the Effective Time Holders upon all shares of Parent Series B Preferred Stock held in the Escrow Fund (after taking into account all other claims for indemnification from the Escrow Fund made by Indemnified Persons), the Effective Time Holders shall be liable for the amount of any Indemnifiable Damages resulting therefrom not to exceed one-hundred percent (100%) of the amount of the Aggregate Merger Consideration actually received by the Effective Time Holders, subject to the terms of Section 9.03(b).
(iii) ▇▇▇▇▇ shall be liable for the amount of any Indemnifiable Damages with respect to claims arising out of, resulting from or in connection with any Fundamental Representations or a claim under Section 9.02(a)(vi) (taxes) (collectively, “Fundamental Claims”), or under Section 9.02(b)(i) (good title), after Indemnified Persons have exhausted or made claims against ▇▇▇▇▇ upon all shares of Parent Series B Preferred Stock held in the Escrow Fund (after taking into account all other claims for indemnification from the Escrow Fund made by Indemnified Persons). The Effective Time Holders other than ▇▇▇▇▇ shall be liable for claims under Section 9.02(b)(i) (good title) for the amount of any Indemnifiable Damages resulting therefrom up to the amount of the Aggregate Merger Consideration actually received by such Effective Time Holders. Notwithstanding anything to the contrary herein, the liability of an Effective Time Holder shall not be limited in connection with any claims arising out of, resulting from or in connection with any fraud or intentional misrepresentation in connection with the Transactions by such Effective Time Holder.
(b) If the Merger is consummated, and subject to the limitations set forth in this Article 9, each Effective Time Holder shall be liable for such holder’s Pro Rata Share of the amount of any Indemnifiable Damages resulting therefrom; provided that such liability shall be limited to such holder’s Pro Rata Share of the Aggregate Merger Consideration; and provided, further, that any claims with respect to any failure of an Effective Time Holder to have good and valid title to the shares of Company Common Stock (including, but not limited to, under Section 4.34.03(a)) held by such Effective Time Holder shall be made directly against such Effective Time Holder, and such Effective Time Holder shall be liable for any such claim only up to the amount of the Aggregate Merger Consideration actually received by such Effective Time Holder. The Parties Notwithstanding anything to the contrary herein, the liability of an Effective Time Holder shall not be required limited in connection with any claims arising out of, resulting from or in connection with any fraud or intentional misrepresentation in connection with the Transactions by such Effective Time Holder.
(c) Notwithstanding anything to indemnifythe contrary herein, defend no Indemnified Person may make a claim for indemnification that is made pursuant to Sections 9.02(a)(i) or hold harmless any Buyer Indemnitee (ii) (and that does not involve fraud or Seller Indemnitee, as the case may be, until the aggregate amount intentional misrepresentation by or on behalf of the Buyer Indemnifiable Losses Company or Seller Indemnifiable Losses, as any inaccuracy or breach of any of the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)Fundamental Representations), following which the indemnifying Party shall indemnify, defend unless and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer until an Officer’s Certificate describing Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, Damages in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of greater than one hundred thousand dollars equal to ($100,000.00) (the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b“Basket”) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a)delivered, in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary Indemnified Person may only make claims for indemnification for Indemnifiable Damages in excess of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision amount of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses Basket.
(d) The Effective Time Holders shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) make any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, claim for contribution from the Company or any Company Subsidiary (provided that of its officers, directors, managers or employees with respect to any indemnity claims arising under or in connection with this Agreement, any Transaction Documents or the foregoing reference Transactions to the Company or extent that any Company Subsidiary refers Indemnified Person is entitled to fraud committed prior to indemnification hereunder for such claim, and the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations Effective Time Holders hereby waive any such right of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, contribution from the Company and any its officers, directors, or any Company Subsidiary on employees it has or after may have in the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)future.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement:
(a) Notwithstanding no Purchaser Indemnitee shall be entitled to any other provision of this Agreement indemnification for any claim for indemnification pursuant to Section 9.02(a) unless the aggregate liability for Losses suffered by the Purchaser Indemnitees thereunder exceeds $[***] (the “Deductible”), at which point the Purchaser Indemnitees shall be entitled to recover only such Losses to the contraryextent that the amount of such Losses exceed the Deductible; provided, that any individual claims (or in the Parties' obligations pursuant to this Article IV arecase of claims arising out of the same facts, events, or circumstances, such claims in the aggregate) where the Losses relating thereto are less than $[***] (the “Mini-Basket”) shall be excluded and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required subject to indemnifyindemnification under Section 9.02(a) and shall not be taken into account in determining whether the Deductible has been met or exceeded; and provided, defend further, that the Deductible and the Mini-Basket shall not apply to claims for indemnification based upon Fraud or hold harmless in respect of breaches of, or inaccuracies in, any Buyer of the Seller Specified Representations, Company Specified Representations, or Company Tax Representations;
(b) other than with respect to claims based upon Fraud, no Purchaser Indemnitee shall be entitled to any indemnification pursuant to Section 9.02(a) to the extent such Losses exceed the Escrow Fund, plus an amount equal to [***]% of any Milestone Payments earned under this Agreement; provided, that the foregoing limitation shall not apply to claims for indemnification in respect of breaches of, or inaccuracies in, any of the Seller IndemniteeSpecified Representations, as Company Specified Representations, Company Tax Representations, or Company IP Representations;
(c) other than with respect to claims arising out of or relating to Section 9.02(g), no Purchaser Indemnitee shall be entitled to any indemnification for any claim for indemnification pursuant to Section 9.02(a) with respect to Company IP Representations to the case may beextent that such Losses exceed the Escrow Fund, until plus an amount equal to [***]% of the Milestone Payments earned under this Agreement;
(d) other than with respect to claims based upon Seller’s breach of its obligations under Section 6.03 or claims arising out of or relating to Section 9.02(g), no Purchaser Indemnitee shall be entitled to any indemnification hereunder to the extent that such Losses exceed the aggregate amount of the Buyer Indemnifiable Losses or Closing Payment, plus an amount equal to [***]% of the Milestone Payments earned under this Agreement;
(e) no Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Indemnitee shall be entitled to any indemnification for any claim for indemnification pursuant to Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only 9.03 to the extent that the Buyer Indemnifiable such Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal the Closing Payment and, if applicable, any Contingent Payments earned under this Agreement;
(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;
(g) in determining the amount of any indemnifiable Losses in respect of the inaccuracy in or breach of any representation or warranty as of any particular date (but not the inaccuracy in or breach of such representation or warranty), “material,” “Material Adverse Effect” or similar materiality qualifiers limiting the scope of such representation or warranty shall be disregarded;
(h) no Purchaser Indemnitee or Seller Indemnitee shall be entitled to double recovery for any indemnifiable Losses even though such Losses may be recoverable under more than one provision of this Agreement, and, notwithstanding anything herein to the Indemnity Cap contrary, no Purchaser Indemnitee shall have any right to indemnification for any matter to the extent (i) the amount of such matter was included in the Closing Indebtedness, the Closing Transaction Expenses, or the Closing Current Liabilities, and (ii) such amount was deducted for purposes of calculating the Closing Payment, each as finally determined pursuant to Section 2.05;
(i) the rights to indemnification provided under this Article IX shall not be affected by any knowledge acquired (or capable of being acquired) by Purchaser at any time (whether before or after the Closing), with respect to any breach of or inaccuracy in, or compliance with, any of the representations, warranties, or covenants of Seller or the Company contained in this Agreement (as defined in Section 4.3(bqualified by the Company Disclosure Schedule)); provided, however, that in determining whether the Seller's and DQE's liability ;
(j) no Party shall be entitled to any claim for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, indemnification pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer Section 9.02(a) or Section 9.03(a) to the Indemnity Cap that is extent arising from (i) a change in accounting or was taxation Law, policy, or practice made after the Closing, other than a change required to comply with any Law, policy, or practice in effect on the date that hereof, or (ii) any Law not in force on the Buyer Indemnitee date hereof or Seller Indemnitee, any change in Law which takes effect retroactively or occurs as a result of any increase in the case may be, delivered a written notice rates of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as taxation in force on the case may be, date hereof;
(k) the waiver of any condition to the Seller as contemplated by Section 4.4 hereof.Closing based on the accuracy of any representation or warranty or on the performance of or compliance with any covenant or agreement shall not be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or warranty, covenant, agreement or obligation; and
(bl) As used in no Purchaser Indemnitees, nor any of their Affiliates, shall have any right to indemnification under this AgreementAgreement with respect to, or based on, Taxes to the extent such Taxes (i) the term "Indemnity Basket" shall mean $250,000, and are attributable to any Tax period other than a Tax period (iior portion of a Straddle Period) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that ending on the first (1st) anniversary of or before the Closing Date, excluding the Indemnity Cap shall be reduced torepresentations and warranties made in Section 4.11(e), and shall thereafter meanSection 4.11(h), $7,500,000; and provided furtherSection 4.11(i), that or Section 4.11(j), but only for as long as the statute of limitations for any Pre-Closing Taxes are open, (ii) are due to the unavailability in any Tax period (or portions thereof) beginning after the Closing Date of any net operating losses, credits, or other Tax attributes from a Tax period (or portion thereof) ending on the second (2nd) anniversary of or before the Closing Date, (iii) result from any transactions or actions taken by the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless Purchaser Indemnitees or any of their Affiliates after the Indemnity Period has been extended until the third (3rd) anniversary of Closing on the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of were already taken into account in the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation calculation of any Environmental Law payment by PSCSeller under this Agreement, Acquisitionincluding Indebtedness or Transaction Expenses, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)in each case as finally determined hereunder.
Appears in 1 contract
Sources: Stock Purchase Agreement (Travere Therapeutics, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to No indemnification shall be made by the contrary, the Parties' obligations Seller pursuant to this Article IV are, Section 8.2 (i) unless such individual Buyer Indemnified Loss or series of related Buyer Indemnified Losses exceeds the Threshold Amount and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, (ii) unless and until the aggregate amount of Buyer Indemnified Losses exceeding the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, Threshold Amount that would otherwise be subject to indemnification exceeds the Indemnity Basket (as defined Deductible, and, in Section 4.3(b))such event, following which the indemnifying Party indemnification shall indemnify, defend and hold harmless the Buyer Indemnitees or only be made by the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Indemnified Losses or exceed the Deductible. The maximum amount that the Seller Indemnifiable Losses, as the case may be, shall be required to pay pursuant to Section 8.2 in respect of all Buyer Indemnified Losses shall not exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Damages Cap, after which point the Parties Seller shall refer have no obligation to the Indemnity Cap that is or was in effect on the date that indemnify the Buyer Indemnitee or Indemnitees from and against further Buyer Indemnified Losses. The Seller’s obligation to indemnify the Buyer Indemnitees under Section 8.2(b), Section 8.2(c) and Section 8.2(d) and with respect to any Seller Indemnitee, as Fundamental Representations shall not be subject to any of the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by limitations in this Section 4.4 hereof8.7(a).
(b) As used in this Agreement, No indemnification shall be made by the Buyer pursuant to Section 8.3 (i) unless such individual Seller Indemnified Loss or series of related Seller Indemnified Losses exceeds the term "Indemnity Basket" Threshold Amount and (ii) unless and until the aggregate amount of Seller Indemnified Losses exceeding the Threshold Amount that would otherwise be subject to indemnification exceeds the Deductible, and, in such event, indemnification shall mean $250,000only be made by the Buyer to the extent that the Seller Indemnified Losses exceed the Deductible. The maximum amount that the Buyer shall be required to pay pursuant to Section 8.2 in respect of all Seller Indemnified Losses shall not exceed the Damages Cap, after which point the Buyer shall have no obligation to indemnify the Buyer Indemnitees from and against further Buyer Indemnified Losses. The Buyer’s obligation to indemnify the Seller Indemnitees under Section 44 8.3(b) and Section 8.3(c) and with respect to any Buyer Fundamental Representations shall not be subject to any of the limitations in this Section 8.7(b).
(c) The amount of any Buyer Indemnified Losses shall be reduced by (i) any amount directly or indirectly received by a Buyer Indemnitee with respect thereto under any insurance coverage (other self-insurance or insurance coverage provided by any captive insurance company that is an Affiliate of a Buyer Indemnitee) or from any other party alleged to be responsible therefore and (ii) the term "Indemnity Cap" amount of any Tax Benefit directly or indirectly available to the Buyer Indemnitee relating thereto. Any Indemnified Party having a claim under Article VIII shall make a good faith effort to recover any Damages from insurers of such Indemnified Party or its Affiliates under applicable insurance policies, in each case as to reduce the amount of any indemnifiable Damages hereunder. If such a recovery or benefit is received or enjoyed by an Indemnified Party after it receives payment or other credit under this Agreement with respect to any Damages, then a refund equal in aggregate amount of such recovery, reduction or setoff will be made promptly to such Indemnifying Party. For purposes of this Section 8.7(c), a “Tax Benefit” shall mean $15,000,000; provided, however, that on a reduction in the first Buyer Indemnitee’s Taxes (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation calculated net of any Environmental Law by PSCTax detriment resulting from the receipt of any indemnification payment) arising out of any Damages that create a Tax deduction, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company credit or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)other Tax benefit.
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Limitations on Indemnification. Purchaser, the Company, and the other Persons or entities indemnified pursuant to Section 10.1 shall not assert any claim for indemnification hereunder against the Seller until such time as, the aggregate of all claims which such persons may have against the Seller shall exceed $30,000 (a) Notwithstanding the "Indemnification Threshold"), whereupon such claims shall be indemnified in full. Seller shall not assert any other provision claim for indemnification hereunder against Purchaser or the Company until such time as the aggregate of all claims which Seller may have against Purchaser or the Company shall exceed $30,000, whereupon such claims shall be indemnified in full. The limitation on assertion of claims for indemnification contained in this paragraph shall apply only to claims based upon inaccuracies in, or breaches of, representations and warranties contained in this Agreement or any document, instrument, certificate or other item required to the contrary, the Parties' obligations be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article IV are, 10 if and at all times shall be, subject to the limitations extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision term of this Agreement to the contraryAgreement, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses Seller shall not be limited liable under this Article 10 or otherwise for an amount which exceeds the amount of proceeds received by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth Seller in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 connection with the transactions contemplated herein. For purposes of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQEforegoing limitation, the SellerDocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made unless an Indemnity Notice, the Company an Unliquidated Indemnity Notice or any Company Subsidiary a Claim Notice (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed as applicable) has been given prior to the Closing Date); in additionapplicable survival period, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)if applicable.
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Limitations on Indemnification. (a) The maximum liability for indemnity claims pursuant to (i) Section 8.3(a)(i) of all Sellers shall not exceed 25% of the Actual Consideration (the "Cap"), (ii) Section 8.3(a)(i) and 8.3(a)(ii) of all Sellers shall not exceed the Actual Consideration, (iii) Section 8.3(a)(i) of each Seller shall not exceed half (50%) of the Cap, and (iv) Section 8.3(b)(i) of Parent and Buyer shall not exceed $375,000.
(b) Buyer Indemnitees shall not be entitled to any indemnification for any indemnification obligations of the Sellers pursuant to Section 8.3(a)(i) unless and until the aggregate amount of Losses equals or exceeds $75,000 (the “Basket”), in which case the Buyer Indemnitees shall be entitled to the entire amount of such Losses and not just the amount of Losses that exceed the Basket. Seller Indemnitees shall not be entitled to any indemnification for any indemnification obligations of Parent and Buyer hereunder unless and until the aggregate amount of Losses equals or exceeds the Basket, in which case the Seller Indemnitees shall be entitled to the entire amount of such Losses and not just the amount of Losses that exceed the Basket.
(c) Notwithstanding anything to the contrary in this Section 8, the limitations set forth in (i) Sections 8.2(a), 8.4(a), 8.4(b) and 8.4(e), shall not apply with respect to any other claim for indemnification arising out of or relating to commission of fraud or willful intentional misrepresentation, and (ii) Section 8.4(b) shall not apply with respect to any claim for indemnification arising out of or relating to (A) any inaccuracy in or breach of the Specified Representations or (B) any inaccuracy in the Final Payment Spreadsheet.
(d) None of the parties shall have any liability under any provision of this Agreement for, and the amount of the Losses shall not include, any damages that (subject to the contraryfollowing sentence) are punitive damages, special damages, or consequential damages that are not reasonably forseeable. Notwithstanding the Parties' obligations pursuant to this Article IV areforegoing sentence, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties 8.4(d) shall not be required to indemnify, defend or hold harmless prevent any Buyer Indemnitee from being indemnified for all components of awards against such Buyer Indemnitee in any Third Party Claim.
(e) Notwithstanding anything herein to the contrary, all Losses for which any Buyer Indemnitee would otherwise be entitled to indemnification under this Article VIII shall be reduced by:
(i) the value of any net Tax benefit actually realized by the Company, Buyer or Seller Indemnitee, as Parent after the case may be, until Closing in connection with the aggregate amount Loss which forms the basis of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless claim for indemnification hereunder by the Buyer Indemnitees or Indemnitee (for the Seller Indemniteessake of clarity, as in no event shall this limitation apply to the case may beparties' undertakings under Section 5.13). For purposes hereof, a Tax benefit will only exist to the extent that it results in, or with commercially reasonable steps capable of being taken by the Company (following the Closing), Buyer Indemnifiable Losses or the Seller Indemnifiable LossesParent, as the case may beto result in, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, a refund of or actual reduction in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal Tax with respect to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), taxable period in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Dateindemnification claim is paid, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding or on any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in Tax Return with respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date)thereto; in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, and
(ii) any breach or violation insurance proceeds (net of any Environmental Law deductibles and increase in premiums) actually received by PSC, Acquisition, any the Buyer Subsidiary designated Indemnitees in connection with the Loss which forms the basis of the claim for indemnification hereunder by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Indemnitee.
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Limitations on Indemnification. (a) Notwithstanding No claim may be asserted nor may any other provision Action be commenced against a party hereto for breach of this Agreement any representation, warranty, covenant or agreement contained herein, unless written notice of such claim or Action is received by such party describing in reasonable detail (but only to the contrary, extent known at the Parties' obligations pursuant to this Article IV are, time of such notice) the facts and at all times shall be, subject circumstances with respect to the limitations subject matter of such claim or Action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or Action is based ceases to survive as set forth in Section 9.01, irrespective of whether the subject matter of such claim or Action shall have occurred before or after such date.
(b) Notwithstanding anything to the contrary contained in this Section 4.3. The Parties Agreement: (i) the Seller shall not be required liable for any Losses pursuant to indemnifySection 9.02(a), defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, unless and until the aggregate amount of the Buyer Indemnifiable indemnifiable Losses or Seller Indemnifiable Losses, as the case which may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or be recovered from the Seller Indemniteesexceeds an amount equal to 1.5% of the Purchase Price, as whereupon the case may be, only Purchaser shall be entitled to indemnification for the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined such Losses in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice excess of such Buyer Indemnifiable Loss amount; (ii) no Losses may be claimed under Section 9.02(a) or Seller Indemnifiable Loss, as shall be reimburseable by or shall be included in calculating the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used aggregate Losses set forth in this Agreement, clause (i) above other than Losses in excess of $500,000 resulting from any single claim or series of related claims arising out of the term "Indemnity Basket" shall mean $250,000same facts, and events or circumstances; (iiiii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on maximum amount of indemnifiable Losses which may be recovered from the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Seller pursuant to Section 4.2(a), in which case the Indemnity Cap 9.02(a) shall continue be an amount equal to mean $7,500,000 until the third (3rd) anniversary 10% of the Closing Date, upon which it shall be reduced to, Purchase Price; and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).EXECUTION COPY
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Sources: Sale and Purchase Agreement
Limitations on Indemnification. (a) Notwithstanding any other provision of anything in this Agreement to the contrary:
11.4.1. in no event shall Seller be liable for, or required to make any payment (other than a Pre-Closing Expense Payment) pursuant to Sections 11.2.1 or 11.2.3 for any Seller Indemnifiable Damages suffered by Purchaser Indemnified Parties unless and until the aggregate dollar amount of all such Seller Indemnifiable Damages exceeds One Million Two Hundred Fifty Thousand Dollars ($1,250,000) (such amount, the Parties' obligations pursuant to this Article IV are“Basket Amount”), and at then only to the extent of such excess; provided, however the maximum aggregate indemnification available to the Purchaser Indemnified Parties in respect of all times such breaches of representations or warranties by Seller contained herein shall bebe the amount of cash remaining in the Escrow Fund and as provided in, and subject to the limitations contained in, Sections 2.2 and 2.3, the Interim Escrow Fund (the “Seller Cap Amount”); provided, further that breach of or inaccuracy in any of the representations and warranties of Seller set forth in this Section 4.3. The Parties Sections 5.1.1 and 5.1.12 shall not be subject to the Basket Amount or the Seller Cap Amount. Nothing contained in this Agreement is intended to limit Purchaser’s right to recover Seller Indemnifiable Damages with respect to all Pre-Closing Expense Payments, without regard to the existence of the Basket Amount.
11.4.2. in no event shall Purchaser be liable for, or required to indemnify, defend or hold harmless make any Buyer Indemnitee or payment pursuant to Section 11.3.1 for any Purchaser Indemnifiable Damages suffered by the Seller Indemnitee, as the case may be, Indemnified Parties unless and until the aggregate dollar amount of the Buyer all such Purchaser Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, Damages exceeds the Indemnity Basket (as defined in Section 4.3(b))Amount, following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, then only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))such excess; provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, maximum aggregate indemnification available to the Seller as contemplated Indemnified Parties in respect of all such breaches of representations or warranties by Section 4.4 hereof.
Purchaser herein shall be a dollar amount equal to five percent (b5%) As used in this Agreement, of the Purchase Price (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000“Purchaser Cap Amount”); provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary breach of or inaccuracy in any of the Closing Date, the Indemnity Cap shall be reduced to, representations and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary warranties of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be Purchaser set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) 6.1 or 3.10 of 6.4 shall not be subject to the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller Basket Amount or the Subsidiaries Purchaser Cap Amount.
11.4.3. Purchaser shall look solely to the Escrow Fund with respect to any claim against Seller for a breach of the or inaccuracy in any representation or warranty of Seller pursuant to Section 11.2.1 (other than any liabilities with respect to a breach of or obligations of the Seller (inaccuracy in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations representations and warranties of the Parties in respect of Taxes, as Seller set forth in Section 4.5Sections 5.1.1 and 5.1.12), and shall have no recourse against Seller or any Seller Indemnified Party with respect to such claims. Purchaser shall not seek, pursue or enter any judgment or collect (vor attempt to collect) indemnity obligations an amount in excess of the Escrow Fund with respect to such matters. Purchaser shall be required to notify Seller of any claim against Seller for a breach of or inaccuracy in any representation or warranty of Seller pursuant to Section 11.2.1 (other than with respect to a breach of or inaccuracy in any of the representations and DQE in respect warranties of certain litigation as Seller set forth in Section 4.6Sections 5.1.1 and 5.1.12) by the delivery of a notice in the form of Exhibit Q (each such notice, (via “Notice of Escrow Claim” and such claim, a “Noticed Claim”) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Escrow Release Date. If Purchaser and Seller cannot mutually agree upon the settlement of such Noticed Claim from amounts in the Escrow Fund, Purchaser shall be deemed to have waived such Noticed Claim (and any right to collect from the Escrow Fund with respect to such claim); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating unless Purchaser brings a court action with respect to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary such Noticed Claim on or prior to the date that is fifteen (15) months after the Closing Date. Nothing contained herein shall prohibit or restrict Purchaser from, and (iii) any fraud committed by PSCor obligate Purchaser to, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference look to the Company Escrow Fund with respect to any Seller Indemnifiable Damages that does not arise from a breach or inaccuracy in any Company Subsidiary refers representation or warranty of Seller. In the event that Purchaser, in its sole discretion, elects to fraud committed on look to the Escrow Fund for the recovery of Indemnifiable Damages arising from a claim against Seller that does not arise from a breach or after inaccuracy in any representation or warranty of Seller, Purchaser and Seller shall follow the Closing Date)procedure for recovering from the Escrow Fund as set out in this Section 11.4.3.
11.4.4. the maximum aggregate indemnification available to the Purchaser Indemnified Parties and the purchaser indemnified parties under the Affiliate Agreements, taken together, in respect of all breaches of the representations, warranties, covenants and indemnities contained in Sections 5.1.18, 7.17, 11.2.5 and the correlative provisions under the Affiliate Agreements shall be $1,000,000, in the aggregate.
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Sources: Purchase and Sale Agreement (Digital Realty Trust, Inc.)
Limitations on Indemnification. (a) Notwithstanding anything in this Agreement to the contrary except as provided in Section 8.4(h), (i) the Buyer Indemnified Parties shall not be entitled to assert any claim for indemnification under Section 8.1(a), other provision than with respect to a breach of a Fundamental Representation, unless and until the aggregate liability for Losses suffered by the Buyer Indemnified Parties thereunder exceeds [*] (the “Threshold”); provided, that in the event that the aggregate liability for Losses exceeds the Threshold, the Buyer Indemnified Parties shall be entitled to recover for all such Losses; (ii) the aggregate amount of all Losses for which the Securityholders shall be liable for indemnification under Sections 8.1(a) (other than with respect to a breach of a Fundamental Representation or Actual Fraud by the Company) and 8.1(c), shall not exceed [*]); (iii) [*]and (iv) [*] if any.
(b) Notwithstanding anything in this Agreement to the contrary, (i) the Parties' obligations Securityholder Indemnified Parties shall not be entitled to assert any claim for indemnification under Section 8.2(a) unless and until the aggregate liability for Losses suffered by the Securityholder Indemnified Parties thereunder exceeds [*]; provided, that in the event that the aggregate liability for Losses exceeds [*], the Securityholder Indemnified Parties shall be entitled to recover for all such Losses ; and (ii) the aggregate amount of all Losses for which Buyer shall be liable for indemnification under Section 8.2(a) shall not exceed [*].
(c) [*]. [*]. For the avoidance of doubt, subject to Section 11.9, the Buyer Indemnified Parties shall have no other remedies with respect to any and all claims and Losses relating to or arising from this Agreement or the transactions contemplated hereby (other than claims of, or causes of actions arising from, Actual Fraud against the alleged perpetrator of such Actual Fraud or a Securityholder who participated in or had actual knowledge of such Actual Fraud) other than as set forth in the preceding sentences.
(d) The Buyer Indemnified Party shall use commercially reasonable efforts, to the extent required by applicable Law, to mitigate Losses for which indemnification may be claimed by such party pursuant to this Agreement upon and after becoming aware of any event that could reasonably be expected to give rise to any such Losses.
(e) The amount of any Losses that any Buyer Indemnified Party is entitled to receive pursuant to this Article IV areVIII shall be reduced by any related recoveries which such Buyer Indemnified Party actually receives under applicable insurance policies or from any other Person alleged to be responsible for any such Losses. If a Buyer Indemnified Party actually receives any amounts under applicable insurance policies, and at all times or from any other Person alleged to be responsible for any Losses, subsequent to an indemnification payment being made by the Securityholders hereunder, then such Buyer Indemnified Party shall be, subject promptly pay to the limitations set forth Paying Agent and Surviving Company (as applicable) for distribution to the Securityholders, in this Section 4.3each case in an amount equal to such indemnification payment, up to the amount received by the Buyer Indemnified Party, net of any previously unpaid or unreimbursed expenses incurred by * Omitted information is the subject of a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been filed separately with the Securities and Exchange Commission. The Parties such Buyer Indemnified Party in collecting such amount and the aggregate increase in insurance premiums that are directly and proximately caused by such Losses.
(f) Notwithstanding anything to the contrary contained herein, except to the extent payable pursuant to a Third Party Claim or a Tax Claim, no Party shall not be required liable to indemnifyany other Party (including its respective heirs, defend legal representatives, successors or hold harmless any Buyer Indemnitee or Seller Indemniteeassigns, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losseshereunder) for any punitive damages, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend except if and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed any such damages are recovered against an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, Indemnified Party pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap a Third Party Claim or a Tax Claim. Each Party hereby waives any claims that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice these exclusions deprive such party of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofan adequate remedy.
(bg) As used in this Agreement, (i) the term "Indemnity Basket" The Securityholders shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary have no indemnification obligation for any Taxes of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to of its Subsidiaries resulting from any action taken by the Company or any Company Subsidiary refers to fraud committed prior to of its Subsidiaries after the Closing Date); in additionon the Closing Date outside the ordinary course of business.
(h) Subject to Section 11.9, each of Buyer, the Buyer's liability for Company (in its capacity as the following Seller Indemnifiable Losses shall not be limited by Surviving Company and the Indemnity Cap: Seller Indemnifiable successor to Merger Sub) and Merger Sub hereby acknowledges and agrees that, should the Closing occur, its sole and exclusive remedy with respect to any and all claims and Losses relating to or arising from this Agreement, any agreement entered into or document delivered in connection with this Agreement (iincluding the Joinder Agreements) indemnity obligations or the transactions contemplated hereby or thereby (other than claims of, or causes of action arising from, Actual Fraud in which the Parties in respect alleged perpetrator of Taxessuch Actual Fraud participated) shall be governed by, as and subject to, the terms and provisions set forth in Section 4.5this Article VIII. Notwithstanding the foregoing, (ii) nothing in this Article VIII will limit any breach Indemnified Party’s right to seek and obtain specific performance or violation of injunctive relief to which any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Party may be entitled.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision Except as provided in the last sentence of this Agreement Section 9.3(a), notwithstanding anything to the contrarycontrary contained in this Agreement, (i) no indemnification under Section 9.2(a)(i) hereof shall be made by Seller and no indemnification under Section 9.2(b)(i) hereof shall be made by Buyer, and neither Seller nor Buyer shall have any Liability, respectively, to the Parties' obligations other therefor, unless and until the aggregate amount of Losses subject to indemnification pursuant thereto and due the Party being indemnified shall exceed $1,250,000 (the “Threshold Amount”), and once the Threshold Amount is exceeded the indemnifying Party shall indemnify the indemnified Party, and shall be liable, only for the amount of any such Losses in excess of the Threshold Amount; (ii) the aggregate amount required to be paid by Seller pursuant to this Article IV areits indemnification obligations under Section 9.2(a)(i) hereof or by Buyer pursuant to its indemnification obligations under Section 9.2(b)(i) hereof shall not exceed an amount equal to $25,000,000 ((A) which amount, for the avoidance of doubt, excludes the Threshold Amount and (B) in the case of Seller, for purposes of calculating such amount, includes any amounts paid by Seller pursuant to the FDA Cost-Sharing Covenant), and at all times neither Party shall behave any Liability to any indemnified Party for, subject to the limitations set forth in this Section 4.3. The and such indemnified Parties shall not be required have no right to indemnify, defend recover from Seller or hold harmless any Buyer Indemnitee or Seller IndemniteeBuyer, as the case may be, until any amount of Losses which exceeds (and from and after the time such Losses exceed) such amount; and (iii) no indemnification under Section 9.2(a)(i) hereof shall be made by Seller and no indemnification under Section 9.2(b)(i) hereof shall be made by Buyer, and neither Seller nor Buyer shall have any Liability, respectively, to the other for any individual Claim or any Liability arising out of or resulting from a single action, event, occurrence or a set of circumstances, unless such individual Claim or such Liability arising out of or resulting from a single action, event, occurrence or a set of circumstances is greater than $37,500; provided, that in the case of clause (iii) above, any Claims or Liabilities resulting from similar facts or circumstances shall be aggregated for the purposes of determining whether such Claims or Liabilities are indemnifiable pursuant to such clause. The applicable indemnified Party shall be entitled to indemnification without regard to any of the provisions of this Section 9.3(a) with respect to indemnification obligations for Losses relating to Fundamental Representations and Warranties or Claims of fraud, intentional misrepresentation or willful breach of this Agreement (provided, however, that the aggregate Liability of Seller or Buyer pursuant to this Section 9.3(a) shall in no event exceed the Initial Cash Price, plus any Earnout Amounts paid to Seller pursuant to Section 2.3).
(i) To the extent that any Losses or Claim therefor which is subject to indemnification hereunder are covered by insurance held by any indemnified Party (an “Insured Loss”), such indemnified Party shall only be entitled to indemnification pursuant to Section 9.2 hereof with respect to the amount of Losses in excess of the net cash proceeds actually received by such indemnified Party pursuant to such insurance (after deducting the out-of-pocket costs and expenses incurred in connection with obtaining such proceeds, excluding incremental insurance premium costs). With respect to any Insured Loss, the applicable indemnified Party shall first use all commercially reasonable efforts to obtain the maximum recovery from the provider of such insurance and then, to the extent that the net cash proceeds received by such indemnified Party (after deducting the out-of-pocket costs and expenses incurred in connection with obtaining such proceeds, excluding incremental insurance premium costs) are less than the amount of the Buyer Indemnifiable Losses indemnified hereunder, or Seller Indemnifiable if the indemnified Party is unable to promptly obtain full recovery from such provider, the indemnified Party shall be entitled to seek indemnification pursuant to Section 9.2 hereof with respect to the amount of the Losses that exceed such recovery, if any; provided, however, that if, following the receipt of any indemnity payments pursuant to Section 9.2 hereof, the indemnified Party obtains any insurance recovery from a third party insurance provider, with respect to such Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which then such indemnified Party shall promptly pay over to the indemnifying Party (in proportion to their relative payments in respect of the underlying Loss) the amount of the net cash proceeds received by such indemnified Party pursuant to such insurance (after deducting the out-of-pocket costs and expenses incurred in connection with obtaining such proceeds, excluding incremental insurance premium costs) up to, but not in excess of, the amount of the indemnity payments made by the indemnifying Party pursuant to such Losses. The Parties agree that (i) no insurance company shall have any right of subrogation under this Section 9.3(b), (ii) this Section 9.3(b) is not for the benefit of any third party insurance provider and (iii) this Section 9.3(b) shall not require any indemnified Party to initiate, engage in or threaten litigation with any of its insurance carriers.
(ii) No Party shall, after the Final Settlement Date, make any Claim for indemnification if and to the extent the Losses with respect to such Claim were fully accounted for in the determination of the Final Adjustment Amount or the Final Closing Indebtedness.
(c) Except for (i) equitable relief, including, without limitation, injunctive relief or specific performance, to which either Party hereto may be entitled pursuant to other Sections of this Agreement, (ii) any Claims pursuant to Section 2.2 or Section 2.3 and (iii) Claims of fraud, intentional misrepresentation or willful breach of this Agreement, the indemnification provided in this Article IX and Section 10.3 shall be the sole and exclusive remedy of the Parties for monetary damages for any breach of any representation, warranty or covenant contained in this Agreement. Notwithstanding the foregoing, prior to the Closing or in the event of the termination of this Agreement in accordance with Article XI, each Party shall have the right to bring an action to enforce, or recover Losses from, the other Party for breaches of representations, warranties and covenants contained in this Agreement.
(d) Notwithstanding anything to the contrary in this Agreement, Losses indemnifiable under this Article IX hereof shall expressly exclude punitive damages, except for any such Losses arising out of Third Party Claims (which shall be indemnifiable by the indemnifying Party for all such damages).
(e) Notwithstanding anything to the contrary herein, Seller shall not be obligated to indemnify, defend and hold harmless the Buyer Indemnitees Indemnified Parties from and against any Losses incurred, suffered or sustained by any Buyer Indemnified Party in connection with, arising out of or resulting from any breach of the representations or warranties made by Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether 4.15 where the Seller's matter giving rise to such Losses is discovered as a result of any Buyer Indemnified Parties conducting sampling and DQE's liability for a particular Buyer Indemnifiable Loss analysis of soil or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of groundwater at any Company Real Property after the Closing Date, except to the Indemnity Cap shall be reduced toextent such sampling is: (i) required by Environmental Laws, and shall thereafter meanincluding a permit issued pursuant to Environmental Laws; (ii) required by a Governmental Order; (iii) reasonably necessary to investigate identified conditions that indicate an imminent or substantial endangerment to health or the environment; (iv) reasonable to defend against or otherwise respond to a Third Party Claim; (v) with respect to Leased Real Property, $7,500,000necessary to comply with the requirements of the lease agreement pertaining to such Leased Real Property; and provided further(vi) requested in writing by a lender or prospective purchaser in connection with a sale, lease, financing or mortgage involving any Company Real Property; or (vii) conducted in connection with proposed construction or expansion at any the Company Real Property, to the extent such sampling is consistent with industry practice, provided, that on for the second (2nd) anniversary avoidance of the Closing Datedoubt, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary indemnification of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses Indemnified Parties shall not be limited by the Indemnity Cap: any Buyer Indemnifiable Losses relating to (i) Indemnified Party conducting sampling or analysis of any litigation, existing drinking water or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇production water ▇▇▇▇▇ or that may exist on the Closing Date at any Company Subsidiary Real Property, or of any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or wastewater discharges at any Company Subsidiary (provided that the foregoing reference to the Company Real Property, or of any indoor or outdoor air at any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Real Property.
Appears in 1 contract
Limitations on Indemnification. Except with respect to Losses arising out of (ax) Notwithstanding any other provision inaccuracies in or breaches of this Agreement to the contraryrepresentations and warranties contained in the first sentence of Sections 4.1 or 4.2 in the case of the Parent, or Sections 5.1 or 5.2 in the case of the Buyers, or Sections 6.1 or 6.2 in the case of the ING Companies, or (y) fraud, bad faith, intentional misrepresentation or intentional omission by the Sellers, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to Buyers or the limitations set forth in this Section 4.3. ING Companies:
(i) The Parties Buyers shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as indemnify the case may be, ING Indemnitees for Losses under Section 10.6(a) until the aggregate amount of such Losses exceeds $100,000, in which event the Buyers shall be responsible for all Losses from the first dollar of such Losses, whether or not in excess such amount. In addition, the Buyers shall not be required to indemnify the ING Indemnitees for Losses under Section 10.6(a) for Losses in the aggregate in excess of $5,000,000.
(ii) The Parent shall not be required to indemnify the ING Indemnitees for Losses under Section 10.6(b) until the aggregate amount of such Losses exceeds $100,000, in which event the Parent shall be responsible for all Losses from the first dollar of such Losses, whether or not in excess such amount. In addition, the Parent shall not be required to indemnify the ING Indemnitees for Losses under Section 10.6(b) for Losses in the aggregate in excess of $5,000,000.
(iii) The ING Companies shall not be required to indemnify the Buyer Indemnifiable Indemnitees or the Seller Indemnitees for Losses or Seller Indemnifiable Losses, as under Section 10.6(c) until the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless aggregate amount of such Losses for the Buyer Indemnitees or the Seller Indemnitees, as applicable, exceeds $100,000, in which event the case may be, only ING Companies shall be responsible to the extent that the Buyer Indemnifiable Losses Indemnitees or the Seller Indemnifiable Indemnitees, as applicable, for all Losses from the first dollar of such Losses, as the case may be, exceed the Indemnity Basketwhether or not in excess such amount. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses ING Companies shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth indemnify the Buyer Indemnitees for Losses under Section 10.6(c) for Losses in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 the aggregate in excess of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7$5,000,000, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses ING Companies shall not be limited by required to indemnify the Indemnity Cap: Seller Indemnifiable Indemnitees for Losses relating to (iunder Section 10.6(c) indemnity obligations for Losses in the aggregate in excess of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)$5,000,000.
Appears in 1 contract
Limitations on Indemnification. The rights of Purchaser Indemnitees and Seller Indemnitees to indemnification pursuant to the provisions of this Article VIII are subject to the following limitations:
(a) Notwithstanding the Purchaser Indemnitees shall not be entitled to recover any other provision Losses pursuant to Section 8.2(a)(i) until the total amount of Losses which the Purchaser Indemnitees would be entitled to recover under Section 8.2(a)(i) with respect to any and all claims for indemnification thereunder, but for this Agreement to Section 8.4(a), exceeds $2,218,420.00 (the contrary“Deductible”), and once the Deductible has been exceeded, the Parties' obligations pursuant Purchaser Indemnitees shall only be entitled to this Article IV arerecover Losses in excess of the Deductible; provided, and at all times however, that the Deductible shall benot apply to Losses suffered or paid by any Purchaser Indemnitee as a result of the breach of any representation or warranty made by Seller in Section 3.2, Section 3.3, Section 3.5(a) or Section 3.12, it being agreed that in the case of a breach of any such representation or warranty, the applicable Purchaser Indemnitee shall, subject to the other limitations set forth in this Section 4.3. The Parties Article VIII, be entitled to be indemnified and held harmless from the first dollar of such Losses;
(b) the Seller Indemnitees shall not be required entitled to indemnify, defend or hold harmless recover any Buyer Indemnitee or Seller Indemnitee, as the case may be, Losses pursuant to Section 8.2(b)(i) until the aggregate total amount of Losses which the Buyer Indemnifiable Losses or Seller Indemnifiable LossesIndemnitees would be entitled to recover under Section 8.2(b)(i) with respect to any and all claims for indemnification thereunder, as the case may bebut for this Section 8.4(b), exceeds the Indemnity Basket (Deductible, and once the Deductible has been exceeded, the Seller Indemnitees shall only be entitled to recover Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to Losses suffered or paid by any Seller Indemnitee as defined a result of the breach of any representation or warranty made by Purchaser in Section 4.3(b)4.2, Section 4.5, or Section 4.9, it being agreed that in the case of a breach of any such representation or warranty, the applicable Seller Indemnitee 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;
(c) neither the Purchaser Indemnitees nor Seller Indemnitees shall be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), following which respectively, unless such Loss (including any series of related Losses) equals or exceeds $25,000, and any such Loss (including any series of related Losses) below such threshold shall not be counted for purposes of determining whether the indemnifying Party shall indemnifyDeductible has been exceeded, defend and hold harmless provided that if such Loss (including any series of related Losses) exceeds such threshold then the Buyer applicable Purchaser Indemnitees or the Seller Indemnitees, as the case may be, only shall be entitled to recover the full amount of such Loss (including any series of related Losses), subject to (and limited by) the other terms set forth in this Article VIII; provided, further, that this Section 8.4(c) shall not apply to Losses suffered or paid by any Purchaser Indemnitee as a result of the breach of any representation or warranty made by the Seller in Section 3.12, it being agreed that in the case of a breach of any such representation or warranty, the applicable Purchaser Indemnitee shall, subject to the other limitations set forth in this Article VIII, be entitled to be indemnified and held harmless form the first dollar of such Losses.
(d) the sole and exclusive source of recovery in respect of any indemnification claim made by any Purchaser Indemnitee pursuant to this Article VIII (other than any claim arising from a breach of the terms set forth in Section 5.13) shall be the Escrow Amount, and in no event shall (i) Seller or any Affiliate thereof or any other Person have any direct liability or obligation in respect of any such indemnification claim, or (ii) the Purchaser Indemnitees be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article VIII (other than any claim arising from a breach of the terms set forth in Section 5.13) from any source other than the Escrow Account or in an aggregate amount in excess of the Escrow Amount on deposit in the Escrow Account as of any applicable date of determination, it being agreed that on the date (if any) that the Escrow Amount is reduced to zero (0) for any reason (including due to the release of the Escrow Amount from the Escrow Account in accordance with the terms of the Escrow Agreement), the Purchaser Indemnitees shall have no further rights to indemnification pursuant to this Article VIII (other than in respect of any claim arising from a breach of the terms set forth in Section 5.13);
(e) notwithstanding anything to the contrary contained in this Agreement or otherwise, the Purchaser Indemnitees shall not be entitled to be indemnified or held harmless under this Agreement (including pursuant to a claim of breach of representation or warranty) for any Taxes (or Losses relating to Taxes) (i) incurred in any tax period other than any tax period ending on or before the Closing Date, (ii) attributable or relating to transactions outside of the ordinary course of business that occur on the Closing Date after the Closing and not contemplated by this Agreement or to actions related to debt incurred in connection with the transactions contemplated by this Agreement, (iii) which are Transfer Taxes for which Purchaser is responsible pursuant to Section 9.4, or (iv) for the existence or non-existence of any Tax attribute;
(f) the maximum Losses indemnifiable pursuant to Section 8.2(b) shall be an amount equal to $13,310,520.00, except in the case of Purchaser’s indemnification obligations hereunder relating to Sections 5.11, 5.15, 5.16 and 5.17, with respect to which the limitation on liability set forth in this clause (f) shall not apply;
(g) the amount of any and all Losses shall be determined net of (i) any amounts recovered or reasonably expected to be recovered by the Purchaser Indemnitees or Seller Indemnitees, as applicable, under insurance policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses, and (ii) any Tax benefits realizable with respect to such Losses;
(h) the Purchaser Indemnitees shall not be entitled to indemnification pursuant to this Article VIII for any Loss to the extent that (i) such Loss was taken into account in the Buyer Indemnifiable Losses determination of the Closing Consideration pursuant to Section 2.3, including in respect of any post-Closing adjustment thereto, or (ii) the Seller Indemnifiable LossesPurchaser Indemnitees could have, as the with commercially reasonable efforts, mitigated or prevented such Loss;
(i) in any case may bewhere a Purchaser Indemnitee recovers, exceed the Indemnity Basket. In additionunder insurance policies or from other collateral sources, the Seller's and DQE's liability, taken together, any amount in respect of a matter for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by which such Purchaser Indemnitee was indemnified pursuant to this Article IV VIII, such Purchaser Indemnitee shall promptly pay over to the Escrow Agent for re-inclusion in no event exceed an aggregate the Escrow Account the amount so recovered (after deducting therefrom the amount of dollars equal any reasonable out-of-pocket, third-party expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (A) any amount previously so paid out of the Escrow Amount to the Indemnity Cap or on behalf of such Purchaser Indemnitee in respect of such matter and (as defined B) any amount expended by Seller or any Seller Indemnitee in Section 4.3(b))pursuing or defending any claim arising out of such matter; provided, however, that in determining whether if such recovery is made after the Release Date, such amounts shall be paid directly to Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; providedprovided further, however, that on the first (1st) anniversary if, as of the Closing Release Date, the Indemnity Cap there shall be reduced toclaims pending against the Escrow Amount, then only the amount that is so recovered that is in excess of the aggregate amount of all such pending claims shall be paid to Seller and the balance shall promptly paid over to the Escrow Agent for re-inclusion in the Escrow Account in accordance with the terms set forth herein; and
(j) Purchaser, on its own behalf and on behalf of all Purchaser Indemnified Parties, agrees that no portion of the Retained Claimed Amount (as defined in the Escrow Agreement) may be used to satisfy any Claim (as defined in the Escrow Agreement) made by Purchaser or any other Purchaser Indemnified Party following the Initial Distribution Date (as defined in the Escrow Agreement), and Purchaser shall not, and shall thereafter meannot permit any other Purchaser Indemnitee to, $7,500,000; and provided furtherrequest any payment from the Escrow Fund (as defined in the Escrow Agreement) that is attributable to, or that on the second (2nd) anniversary of the Closing Datewould be satisfied out of, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (Retained Claimed Amount in respect of any Claim made following the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Initial Distribution Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (United Maritime Group, LLC)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything to the contrarycontrary contained in this Agreement:
13.4.1 (i) in no event shall Seller or Seller Guarantor be liable for, the Parties' obligations or required to make any payment pursuant to this Article IV are, Section 13.2 for any Seller Indemnifiable Damages suffered by any of the Purchaser Indemnified Parties unless and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate dollar amount of the Buyer Indemnifiable Losses or all such Seller Indemnifiable Losses, as the case may be, Damages exceeds the Indemnity Basket Seven Hundred Fifty Thousand Dollars (as defined in Section 4.3(b)$750,000), following which after considering any recovery any of the indemnifying Party shall indemnifyPurchaser Indemnified Parties actually obtains from any title or other insurance coverage or other remedies, defend and hold harmless if any, Purchaser (or any of the Buyer Indemnitees or the Seller Indemnitees, as the case other Purchaser Indemnified Parties) may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionhave in connection with such claims (such amount, the Seller's and DQE's liability“Basket Amount”), taken together, for Buyer Indemnifiable Losses and which Basket Amount shall by fully recoverable once the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV same is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, satisfied and (ii) the term "Indemnity Cap" shall mean $15,000,000; providedmaximum aggregate liability of Seller and Seller Guarantor in respect of all claims against Seller arising under or pursuant to this Agreement and the Transactions (whether characterized as a covenant, howeveragreement, that on the first (1strepresentation, warranty, indemnity or otherwise) anniversary of the Closing Date, the Indemnity Cap shall will be reduced limited to, and shall thereafter meannot exceed, $7,500,000; and provided further, that on the second (2nd) anniversary 3% of the Closing DatePurchase Price (the “Seller Liability Cap”).
13.4.2 In no event shall Purchaser be liable for, or required to make any payment pursuant to Section 13.3 for any Purchaser Indemnifiable Damages suffered by the Indemnity Cap Seller Indemnified Parties unless and until the aggregate dollar amount of all such Purchaser Indemnifiable Damages under this Agreement exceeds the Basket Amount, which Basket Amount shall be reduced tofully recoverable once the same is satisfied.
13.4.3 Subject to the terms of this Article XIII, following the Closing, Purchaser shall look solely to the Seller and Seller Guarantor (and to none of the other Seller Indemnified Parties) with respect to any claim against Seller for a breach of or inaccuracy in any of the Seller’s Representations, and shall thereafter meanhave no recourse against any Seller Indemnified Party (other than Seller and Seller Guarantor) with respect to such claims, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary and none of the Closing DatePurchaser Indemnified Parties shall (or shall have the right to) seek, pursue or enter any judgment or collect (or attempt to collect) an amount in excess of the Seller Liability Cap with respect to such matters. Purchaser shall be required to notify Seller prior to the Outside Claim Date of any claim against Seller or Seller Guarantor for a breach of or inaccuracy in any of the Seller’s Representations pursuant to Section 4.2(a), in which case 13.2 by the Indemnity Cap shall continue to mean $7,500,000 until delivery of a notice setting forth: (i) the third (3rd) anniversary dollar amount of the Closing DateSeller Indemnifiable Damages claim noticed, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision if reasonably estimable by Purchaser; (ii) the aggregate dollar amount of all prior Seller Indemnifiable Damages pursuant to Section 13.2 of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited asserted by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Purchaser Indemnified Parties against Seller Disclosure Scheduleor Seller Guarantor to date, (ii) Excluded Assets, if reasonably estimable; (iii) any whether the Basket Amount has been exceeded; and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations the aggregate dollar amount of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company Indemnifiable Damages paid to Purchaser or any Company Subsidiary other Purchaser Indemnified Party to date (provided that each such notice, a “Notice of Claim” and such claim, a “Noticed Claim”). If Purchaser and Seller cannot mutually agree upon the foregoing reference settlement of any such Noticed Claim, Purchaser shall be deemed to the Company have waived such Noticed Claim (and any right to collect from Seller or any Company Subsidiary refers Seller Guarantor with respect to fraud committed such claim), unless Purchaser brings a court action with respect to such Noticed Claim on or prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to date that is three (i3) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or months after the Closing Outside Claim Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Sabra Health Care REIT, Inc.)
Limitations on Indemnification. MARINEMAX, NEWCO, the Surviving Corporation and the other persons or entities entitled to indemnification pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for indemnification hereunder against the STOCKHOLDERS until such time as, and solely to the extent that, the aggregate of all claims that such persons may have against the STOCKHOLDERS shall exceed the sum of $250,000 (a) the "Indemnification Deductible"); and after such Indemnification Deductible amount has been attained, only claims in excess of such amount shall be indemnified hereunder. The STOCKHOLDERS shall not assert any claim for indemnification hereunder against MARINEMAX or NEWCO until such time as, and solely to the extent that, the aggregate of all claims which the STOCKHOLDERS may have against MARINEMAX or NEWCO shall exceed the sum of $250,000. No person shall be entitled to indemnification under this Section 11 if and to the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in this Agreement. The liability of the Company for breaches of its representations and warranties contained in this Agreement and for any indemnification obligation herein shall cease as of the Effective Time, and MARINEMAX and Surviving Corporation may recover for such breaches and recover for such indemnification only from the MARINEMAX Stock held in escrow pursuant to and as provided in the Escrow and Security Agreement, except to the extent specific and separate indemnification is provided by the STOCKHOLDERS. MARINEMAX and Surviving Corporation may recover for indemnification hereunder only from the MARINEMAX Stock held in escrow pursuant to and as provided in the Escrow and Security Agreement, except to the extent specific and separate indemnification is provided by the STOCKHOLDERS. It is hereby understood and agreed that STOCKHOLDERS may only satisfy an indemnification obligation through payment of stock, such stock to be valued as described immediately below, except as may otherwise be permitted and still preserve pooling-of-interests accounting treatment. Notwithstanding any other provision term of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement shall limit or be deemed to limit any liability or remedy one party may have against any other parties hereto that arises by statute or any applicable federal, state or local law. For purposes of calculating the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 value of the Seller Disclosure ScheduleMARINEMAX Stock received by STOCKHOLDERS, (ii) Excluded Assets, (iii) MARINEMAX Stock shall be valued at $13.00 per share. No provision of this Agreement or in this Section 11 shall limit or be deemed to limit any and all liabilities and obligations liability or remedy one party may have against any other parties hereto with respect to a claim of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)fraud.
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required to indemnifyindemnify Buyer or any Buyer-Related Entities under Section 11.1, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until unless the aggregate of all amounts for which an indemnity would otherwise be payable by Seller under Section 11.1 exceeds the Basket Limitation and, in such event, Seller shall be responsible only for such amount in excess of the Buyer Indemnifiable Losses or Basket Limitation. In no event shall the liability of Seller Indemnifiable Losses, as with respect to the case may be, exceeds the Indemnity Basket (as defined indemnification provided for in Section 4.3(b))11.1 exceed in the aggregate the Cap Limitation; provided that the Basket Limitation and Cap Limitation shall not apply to Seller’s obligations under Article X. If, following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only prior to the extent that Closing, Buyer is aware of any inaccuracy or breach of any representation, warranty or pre-closing covenant of Seller contained in this Agreement (a “Buyer-Waived Breach”) and nonetheless proceeds with and consummates the Closing, then Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, any Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by indemnification under this Article IV shall XI for, or any other claim or cause of action under this Agreement, whether at law or in no event exceed an aggregate amount equity, on account of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the any such Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof-Waived Breach.
(b) As used Buyer shall not be required to indemnify Seller or any Seller-Related Entities under Section 11.2, unless the aggregate of all amounts for which an indemnity would otherwise be payable by Buyer under Section 11.2 exceeds the Basket Limitation and, in such event, Buyer shall be responsible only for such amount in excess of the Basket Limitation. In no event shall the liability of Buyer with respect to the indemnification provided for in Section 11.2 exceed in the aggregate the Cap Limitation; provided that the Basket Limitation and Cap Limitation shall not apply to Buyer’s obligations under Article X. If, prior to the Closing, Seller is aware of any inaccuracy or breach of any representation, warranty or pre-closing covenant of Buyer contained in this Agreement (a “Seller-Waived Breach”) and nonetheless proceeds with and consummates the Closing, then Seller and any Seller-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article XI for, or any other claim or cause of action under this Agreement, (i) the term "Indemnity Basket" shall mean $250,000whether at law or in equity, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation account of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Seller-Waived Breach.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Ashford Hospitality Prime, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to To the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In additionIndemnified Parties are entitled to indemnification for Liabilities pursuant to Section 10.1, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV Sellers shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, not have any Liability (i) for any individual indemnifiable item (or series of related items) which does not exceed $100,000 (the term "“Individual Indemnity Basket" shall mean $250,000Threshold”), and (ii) in respect of those individual indemnifiable items that exceed the term "Individual Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zeroThreshold, unless the Indemnity Period has been extended until aggregate Liabilities relating to all such individual indemnifiable items exceed in the third aggregate an amount equal to $3,000,000 (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a“Deductible Amount”), in which case and then only to the extent of any such excess. In no event shall the Sellers’ aggregate liability to the Buyer Indemnified Parties exceed an amount equal to $20,000,000 (the “Cap”). Notwithstanding the foregoing, (A) the Individual Indemnity Threshold, the Deductible Amount and the Cap shall continue not apply to mean $7,500,000 until indemnification for Liabilities relating to HFS Fundamental Representations or to any indemnification obligation under Section 10.1(b) or 10.1(c) and (B) the third Individual Indemnity Threshold and the Deductible Amount shall not apply to any indemnification obligation under clause (3rdd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zeroSection 10.1. Notwithstanding any other provision of this Agreement to the contrary, Sellers’ aggregate liability to the Seller's Buyer Indemnified Parties with respect to indemnification under this Article 10 shall in no event exceed the Base Purchase Price.
(b) For purposes of determining the Liabilities subject to indemnity pursuant to this Article 10, any materiality or Material Adverse Effect qualifiers in the representations and DQE's liability for warranties (other than the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be representations and warranties set forth in Sections 3.7, 3.8(a(x) the parenthetical in Section 4.14(a) and (y) Section 4.15(b), 3.8(b)and in each case, 3.9(ithe related definitions) shall be disregarded.
(c) In calculating any amount to be paid by an Indemnifying Party by reason of the provisions of this Agreement, the amount shall be reduced by all insurance proceeds and any indemnification reimbursement proceeds actually received from Third Parties related to the Liabilities, in each case net of all reasonable out-of-pocket costs incurred in the recovery of such proceeds. No Buyer Indemnified Parties shall be entitled to double recovery for any particular item for which an adjustment has already been made to the purchase price under the terms of this Agreement (whether at Closing or thereafter) or 3.10 with respect to which indemnification is provided under this Agreement. In calculating amounts payable to any Buyer Indemnified Party hereunder, the amount of any indemnified Liability shall be determined without duplication of any adjustment to the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ purchase price or any Company Subsidiary other Liability for which an indemnification claim has been made with respect to any other representation or any of the Integrated Assets warranty, or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company covenant or any Company Subsidiary (provided agreement that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed contemplates performance thereof prior to the Closing Date); .
(d) Except as provided in additionSection 6.13, the Buyer's liability for the following Seller Indemnifiable Losses shall right to indemnification provided by this Agreement will not be limited affected by any investigation conducted by the Indemnity Cap: Seller Indemnifiable Losses relating Party to or for whom such representation, warranty, covenant or obligation is made with respect to, or any Knowledge acquired prior to the Closing Date.
(e) Notwithstanding anything in this Agreement to the contrary, Sellers shall have no obligation under this Agreement to indemnify any Person for any Liabilities (including Environmental Liabilities) to the extent that such Liabilities are incurred (i) indemnity obligations as a result of any remedial, removal or other response action in excess of the Parties reasonable cost of the response required under Environmental Laws that addresses the applicable cause of such Liabilities to the extent required by applicable Environmental Laws at the lowest commercially reasonable cost (considered as a whole taking into consideration any material negative impact such response may have on the operations of the relevant Water Assets (as operated on the Closing Date) or any potential material additional costs or liabilities that may likely arise as a direct result of such response) as compared to any other response that is required under Environmental Laws or (ii) in respect of Taxes, as order to meet a more stringent cleanup standard than that set forth in Section 4.5, clause (iii) any breach or violation which result from a change in land use from the use in effect as of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant or from a change of Law relative to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after which is in effect as of the Closing Date. Buyer agrees not to compel, induce, or solicit, whether directly or indirectly, any Governmental Authority to require any environmental action, investigation, monitoring or remediation unless affirmatively required to do so by Environmental Laws.
(f) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS ARTICLE 10, NO PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE UNDER THIS ARTICLE 10 OR OTHERWISE FOR EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, REMOTE, SPECULATIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES (EXCEPT TO THE EXTENT SUCH CONSEQUENTIAL DAMAGES CONSTITUTE DIRECT DAMAGES), WHETHER IN TORT (INCLUDING NEGLIGENCE OR GROSS NEGLIGENCE), STRICT LIABILITY, BY CONTRACT OR STATUTE, EXCEPT TO THE EXTENT ANY INDEMNIFIED PARTY SUFFERS SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A FINALLY ADJUDICATED THIRD PARTY CLAIM, IN WHICH CASE SUCH DAMAGES SHALL BE RECOVERABLE (TO THE EXTENT RECOVERABLE UNDER THIS ARTICLE 10) WITHOUT GIVING EFFECT TO THIS SECTION 10.4(f).
Appears in 1 contract
Limitations on Indemnification. Rights to indemnification under ------------------------------ (S)4.2(a)(i) are subject to the following limitations:
(a) Notwithstanding any other provision The obligation of this Agreement indemnity with respect to the contrary, the Parties' obligations pursuant to this Article IV are, representations and at all times shall be, subject to the limitations warranties set forth in this Section 4.3. The Parties (S)B.10 of Exhibit B shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as terminate on the case may be, until the aggregate amount expiration of the Buyer Indemnifiable Losses or Seller Indemnifiable Lossesrespective periods of limitations applicable to assessment and collection of taxes under laws then applicable to such taxes, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only with respect to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, representations and warranties as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap absence of unpaid or undisclosed taxes (as defined in Section 4.3(b)); providedincluding any interest, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss penalties or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice expenses) of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofSellers.
(b) As used The obligation of indemnity with respect to the representations and warranties set forth in this Agreement(S)B.19 of Exhibit B shall terminate upon expiration of the respective statutes of limitation applicable to the items addressed in such section.
(c) The obligation of indemnity with respect to the representations and warranties contained in (S)(S)B.2, B.3, B.5, and B.11 of Exhibit B shall not expire.
(d) The obligation of indemnity with respect to the representations and warranties set forth in Exhibit B other than those addressed in the immediately preceding subsections (a), (i) the term "Indemnity Basket" shall mean $250,000b), and (iic) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that terminate on the first (1st) third anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second .
(2nde) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision The foregoing provisions of this Agreement (S)4.3 notwithstanding, if, prior to the contrarytermination of any obligation of indemnity, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses written notice of a claimed breach or other occurrence or matter giving rise to a claim of indemnification is given by ADP to any Seller or Owner, or a suit, action, or other proceeding based upon a claimed breach is commenced against any Seller or Owner, ADP shall not be limited precluded from pursuing such claimed breach, occurrence, other matter, or suit or action, or from recovering from any Seller or Owner (whether through the courts or otherwise) on the claim, suit, action, or proceeding, by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 reason of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (termination otherwise provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)above.
Appears in 1 contract
Sources: Asset Purchase Agreement (American Dental Partners Inc)
Limitations on Indemnification. (a) Notwithstanding In no event shall the indemnification obligations of the Holders include any other provision of this Agreement obligation to the contrary, the Parties' obligations pursuant to this Article IV are, provide indemnification for Covered Losses unless and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of all Covered Losses for which the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as Parent Indemnified Parties are entitled to indemnification exceeds an amount equal to [REDACTED]* (the case may be, exceeds the “Indemnity Basket (as defined in Section 4.3(b)Basket”), following in which case the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case Parent Indemnified Parties may be, only be entitled (subject to the extent that the Buyer Indemnifiable other limitations herein) to indemnification only for Covered Losses or the Seller Indemnifiable Losses, as the case may be, exceed in excess of the Indemnity Basket. In additionaddition to the foregoing limitation, if the total amount of Covered Losses arising out of a specific breach does not exceed [REDACTED]*, then no Parent Indemnified Party shall be entitled to indemnification for any such Covered Losses and such Covered Losses shall not be included for purposes of determining whether the Indemnity Basket has been exceeded.
(b) The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, the Seller's Fundamental Company Representations or the Statutory Representation) shall be limited to [REDACTED]*. Notwithstanding the preceding sentence, [REDACTED]*, the maximum obligation of the Holders to provide indemnification to any and DQE's liabilityall Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, taken together, for Buyer Indemnifiable Losses the Fundamental Company Representations or the Statutory Representation) and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV 12.2(c) shall in no event exceed be limited to an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))[REDACTED]*; provided, however, that in determining whether any such indemnification obligation shall be satisfied first from the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer Escrow Account to the Indemnity Cap that is or was extent any funds remain therein, and thereafter by each Holder, severally (in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofaccordance with its Sharing Ratio) but not jointly.
(bc) As used The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Section 12.2(a)(iii) in this Agreement, (irespect of the Statutory Representation and pursuant to Sections 12.2(b) the term "Indemnity Basket" and 12.2(c) shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000be limited to an amount equal to [REDACTED]*; provided, however, that on any such indemnification obligation shall be satisfied first from the first Escrow Account to the extent any funds remain therein, and thereafter by each Holder, severally (1stin accordance with its Sharing Ratio) anniversary but not jointly.
(d) The maximum obligation of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant Holders to Section 4.2(a), in which case the Indemnity Cap shall continue provide indemnification to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities Parent Indemnified Parties pursuant to Sections 12.2(a)(i) and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (12.2(a)(iii) in respect of the Company)Fundamental Holder Representations and the Fundamental Company Representations shall be limited to an amount equal to [REDACTED]*; provided, Utilityhowever, Developmentthat any such indemnification obligation shall be satisfied first from the Escrow Account to the extent any funds remain therein, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any and thereafter (A) in the case of the Integrated Assets or Integrated Liabilities)Fundamental Holder Representations, by the Holder who made such representations and (ivB) indemnity obligations in the case of the Parties Fundamental Company Representations, by each Holder, severally (in respect of Taxes, as set forth in Section 4.5, accordance with its Sharing Ratio) but not jointly.
(ve) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference Notwithstanding anything to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); contrary contained in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisitionthis Article XII, any Buyer Subsidiary designated by PSC Losses subject to indemnification pursuant to Section 1.1, 12.2 shall be decreased to the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided extent that the foregoing reference to amount of such Losses are reflected as a liability, reserve, accrual or other item on the Company Final Balance Sheet or any Company Subsidiary refers to fraud committed on or after are otherwise included in the Closing Date)determination of the Final Adjustment Amount.
Appears in 1 contract
Limitations on Indemnification. Each covenant or agreement in this Agreement shall survive the Closing without limitation as to time until fully performed in accordance with its terms. Notwithstanding the foregoing, no claim may be made or suit instituted under this Article 7 with respect to any breach (or purported breach) of any representation or warranty or any covenant to be complied with prior to the Closing after the date which is one year after the Closing Date, except for (a) Notwithstanding Reserved Claims and (b) any other provision claim arising out of this Agreement or relating to a breach (or purported breach) of Sections 2.2 (Capitalization) or 2.13 (Taxes) hereof, which shall survive until the statute of limitations applicable to the contrarymatters set forth therein shall expire. A claim for indemnification arising out of or relating to an Excluded Liability or an Assumed Liability may be brought at any time. The term "Reserved Claims" shall mean all claims for Losses incurred on or prior to the date which is one year after the Closing Date as to which the Indemnified Party has given any Indemnifying Party reasonably specific written notice (in light of the facts then known) on or prior to the date which is one year after the Closing Date. No party shall be liable under this Article 7 from and after the Closing, and no claim for indemnification hereunder may be asserted from and after the Parties' obligations Closing, for any loss of profits or consequential, indirect or incidental damages and, in particular, no "multiple of profits" or "multiple of cash flow" or similar valuation methodology shall be used in calculating the amount of any such Losses. In addition, no claim may be made by any party pursuant to this Article IV are, 7 with respect to any breach of representation and at all times shall be, subject warranty or any covenant to be complied with prior to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until Closing unless the aggregate amount of all Losses incurred by such party as a result of such breaches that would, but for the Buyer Indemnifiable limitations contained in this sentence, be indemnifiable hereunder exceeds $1,250,000, in which case the Indemnifying Party's liability, if any, hereunder with respect to such claims shall only be for any amount of such aggregate indemnifiable Losses or Seller Indemnifiable Lossesin excess of such deductible amount. In addition, as no party shall be liable to any Indemnified Party pursuant to this Article 7 for Losses of the case may be, exceeds the Indemnity Basket (as defined types described in Section 4.3(b)), following which 7.2 with respect to representations and warranties or any covenant to be complied with prior to the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only Closing to the extent that the Buyer Indemnifiable aggregate amount of all Losses or the Seller Indemnifiable Losses, incurred by such party as the case may be, exceed the Indemnity Basketa result of such breaches exceeds $6,250,000. In addition, the Seller's The foregoing time and DQE's liability, taken together, for Buyer Indemnifiable Losses dollar limitations (both floor and the Buyer's liability for Seller Indemnifiable Losses, in either case, as cap) on indemnification shall not apply to (a) any breach of any covenant contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal Agreement to the Indemnity Cap (as defined in Section 4.3(b)); providedbe performed after Closing, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreementany claim arising out of or relating to Seller's failure to discharge or perform the Excluded Liabilities, (ic) the term "Indemnity Basket" shall mean $250,000, and any claim arising out of or relating to a breach (iior purported breach) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first of Sections 2.2 (1stCapitalization) anniversary or 2.13 (Taxes) or (d) any claim arising out of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant or relating to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Fraud.
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Limitations on Indemnification. Parties entitled to indemnification under Section 7.2(a) or 7.2(b) are referred to herein as "INDEMNIFIED PARTIES," and the parties from whom they are entitled to indemnification are referred to as their "INDEMNIFYING PARTIES."
(ai) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parent Indemnified Parties shall not be required entitled to indemnify, defend indemnification under this Section 7.2 unless and until one or hold harmless any Buyer Indemnitee or Seller Indemnitee, as more claims for indemnification from the case may be, until Escrow Contributors identifying Losses in excess of $100,000 in the aggregate amount (the "BASKET AMOUNT") has or have been delivered to the Shareholder Representative, in which case the Parent Indemnified Parties shall be entitled to recover all Losses so identified including, without limitation, the Basket Amount. The Shareholders shall not be entitled to indemnification under this Section 7.2 unless and until one or more claims for indemnification from Parent identifying Losses in excess of the Buyer Indemnifiable Basket Amount has or have been delivered to Parent, in which case the Shareholders shall be entitled to recover all Losses so identified including, without limitation, the Basket Amount.
(ii) The Parent Indemnified Parties on the one hand and the Shareholders on the other hand shall not be entitled to indemnification under this Section 7.2 with respect to their respective first four (4) individual claims for Losses of less than $25,000 that are reflected in one or Seller Indemnifiable more claims for indemnification delivered to one or more of their respective Indemnifying Parties (such limitation, the "SMALL CLAIM BAR", and any such claim for which recovery from the escrow is so barred, a "BARRED CLAIM") and such Barred Claims shall not be counted in determining whether the Basket Amount has been reached; provided, however, that the Small Claim Bar shall apply to no more than four (4) claims for Losses made by the Parent Indemnified Parties on the one hand and the Shareholders on the other hand. The liability of Indemnifying Parties with respect to any Losses shall be reduced by any insurance proceeds received by the Indemnified Parties as a result of such Losses.
(iii) The Escrow Contributors' aggregate liability for indemnifying the Parent Indemnified Parties pursuant to this Section 7.2 (exclusive of any liability for indemnification for willful or fraudulent breach or inaccuracy of a representation, as warranty or covenant of Company or a Shareholder contained in this Agreement) and for claims made by Parent and Merger Sub pursuant to the case may beSpecial Escrow Claims provisions of Exhibit A attached hereto shall not exceed, exceeds in the Indemnity Basket aggregate: (a) $45,000,000 for First Year Claims (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend below) and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only (b) $33,750,000 less amounts received by Parent Indemnified Parties with respect to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken togetherFirst Year Claims, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap Second Year Claims (as defined in Section 4.3(b)below); provided, however, that in determining whether to the Sellerextent a Second Year Claim made by a Parent Indemnified Party would have been reduced by an Adjustment Amount (as defined below), the later resolved First Year Claim giving rise to such Adjustment Amount shall be reduced by the Adjustment Amount.
(iv) Parent's and DQESurviving Corporation's aggregate liability for a particular Buyer Indemnifiable Loss or indemnifying the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, Shareholders pursuant to this Article IV is limited Section 7.2 shall not (exclusive of any liability for indemnification for willful or fraudulent breach or inaccuracy of a representation, warranty or covenant of Parent or Merger Sub contained in this Agreement) exceed, in the aggregate: (a) $45,000,000 for First Year Claims made by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
any Shareholders and (b) As used in this Agreement$33,750,000 less amounts received by the Shareholders for First Year Claims, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000for Second Year Claims; provided, however, that on to the first (1st) anniversary of the Closing Dateextent a Second Year Claim made by a Shareholder would have been reduced by an Adjustment Amount, the Indemnity Cap later resolved First Year Claim giving rise to such Adjustment Amount shall be reduced to, and by the Adjustment Amount. The Shareholders shall thereafter mean, $7,500,000; and provided further, that on not have any right of contribution from Company with respect to any Loss claimed by a Parent Indemnified Party after the second Effective Time.
(2ndv) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Each Escrow Contributor's several liability with respect to a claim for indemnification pursuant to Section 4.2(a), in 7.2(a) and with respect to any Special Escrow Claim which case the Indemnity Cap shall continue to mean $7,500,000 until the third is payable under this Article VII (3rd) anniversary after application of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's applicable limits on liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v7.2(c)) indemnity obligations shall equal the total amount of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyersuch payable liability times such Escrow Contributor's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)Allocable Share.
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Sources: Merger Agreement (Realnetworks Inc)
Limitations on Indemnification. (a) Notwithstanding For the purpose of measuring Damages of the Purchaser Group Members under this Article IX, except for (i) any other provision inaccuracy in or breach of this Agreement any Fundamental Representation made by Seller or Parent that relates solely to the contrary▇▇▇▇ Parties or the Transferred Interest and/or the Redeemed Interest, (ii) fraud or intentional misrepresentation, or (iii) any breach of or failure to perform any covenant or agreement made or to be performed, the Parties' obligations Purchaser Group Members shall only be entitled to indemnification for Damages suffered or incurred on account of the ownership of 50% of the JV Entity and its Subsidiaries.
(b) Purchaser Group Members shall not be entitled to be indemnified pursuant to this Article IV areSection 9.2(a) unless and until the aggregate amount of Damages suffered or incurred by Purchaser Group Members exceeds the Basket, whereupon Purchaser Group Members shall be indemnified for the amount of such Damages in excess of the Basket, and at the aggregate amount of all times such Damages for which the Purchaser Group Members shall bebe entitled to indemnification pursuant to Section 9.2(a) shall not exceed the Cap. Notwithstanding the foregoing, subject to the limitations set forth in this Section 4.3. The Parties 9.4(b) shall not be required apply with respect to indemnify(i) any fraud or intentional misrepresentation by Seller or Parent with respect to any representations or warranties by any ▇▇▇▇ Party made in this Agreement, defend (ii) any inaccuracy in or hold harmless breach of any Buyer Indemnitee Fundamental Representation made by Seller or Parent, or (iii) any inaccuracy in or breach of any representation or warranty made by Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b))4.3, following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, but only to the extent that (x) such inaccuracy or breach resulted in an inaccurate calculation of Closing Indebtedness or Closing Working Capital, (y) such inaccuracy was not otherwise addressed in the Buyer Indemnifiable Losses post-Closing adjustment process set forth in Section 2.5, and (z) Purchaser did not have actual knowledge of such inaccuracy or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses breach and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount effect thereof on the calculation of dollars equal Closing Indebtedness or Closing Working Capital at the time it submitted its Post-Closing Statement pursuant to the Indemnity Cap (as defined in Section 4.3(b))2.5; provided, however, that the aggregate amount of Damages for which the Purchaser Group Members shall be entitled to be indemnified and held harmless pursuant to Section 9.2(a) with respect to the matters described in determining whether the Seller's and DQE's foregoing clauses (i) through (iii) shall not exceed the Closing Payment. Notwithstanding anything herein to the contrary, the ▇▇▇▇ Parties’ aggregate liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Lossany liabilities under this Agreement shall not, in either casethe aggregate, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer exceed an amount equal to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofClosing Payment.
(bc) As used Seller Group Members shall not be entitled to be indemnified pursuant to Section 9.3(a) unless and until the aggregate amount of Damages suffered or incurred by Seller Group Members exceeds the Basket, whereupon Seller Group Members shall be indemnified for the amount of such Damages in excess of the Basket, and the aggregate amount of all such Damages for which the Seller Group Members shall be entitled to indemnification pursuant to Section 9.3(a) shall not exceed the Cap. Notwithstanding the foregoing, the limitations set forth in this Agreement, Section 9.4(c) shall not apply with respect to (i) the term "Indemnity Basket" shall mean $250,000, and any fraud or intentional misrepresentation by Purchaser with respect to any representations or warranties by Purchaser made in this Agreement or (ii) the term "Indemnity Cap" shall mean $15,000,000any inaccuracy in or breach of any representation or warranty made in Section 5.1 or 5.2 by Purchaser; provided, however, that on the first (1st) anniversary aggregate amount of Damages for which the Closing Date, the Indemnity Cap Seller Group Members shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, entitled to indemnification pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd9.3(a) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating with respect to (i) any litigationfraud or intentional misrepresentation by Purchaser or (ii) any inaccuracy in or breach of representation or warranty made in Section 5.1 or Section 5.2 by Purchaser, existing shall not exceed the Closing Payment. Notwithstanding anything herein to the contrary, Purchaser’s aggregate liability for liabilities under this Agreement shall not, in the aggregate, exceed an amount equal to the Closing Payment.
(d) The parties acknowledge and agree that from and after the Closing, the indemnification provisions contained in Section 9.2 and Section 9.3 shall be the sole and exclusive remedy for Damages arising out of or threatenedcaused by any inaccuracy in or breach of any of the representations or warranties or the breach of or failure to perform any of the covenants or agreements of the parties contained in this Agreement (except for any remedies that may be available under the other Transaction Documents) or, without duplication of the remedies available under this Agreement, the JV Operating Agreement or otherwise relating to the subject matter of this Agreement; provided that is required this Section 9.4(d) shall have no impact on the calculation of the Purchase Price (and the components thereof), including for purposes of Section 2.5.
(e) In calculating the amount of any Damages payable to an Indemnitee hereunder, the amount of the Damages (i) shall not be duplicative of any adjustments to the Purchase Price pursuant to Article II, and (ii) shall not be duplicative of any other Damages for which an indemnification payment has been made under this Agreement.
(f) The waiver of any condition based on the accuracy of any representation or warranty set forth in Sections 3.7this Agreement, 3.8(a)or on the performance of or compliance with any covenant, 3.8(b)obligation or agreement set forth in this Agreement, 3.9(ishall not affect the right to indemnification or other remedy based on such representations, warranties, covenants, obligations and agreements.
(g) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (In determining Damages in respect of the Company)failure of any representation or warranty to be true and correct as of any particular date, Utilityany “materiality”, Development“in all material respects”, ▇▇▇▇▇▇▇▇ “Material Adverse Effect” or other similar standard or qualification contained in such representation or warranty shall be disregarded for purposes of calculating the amount of any Company Subsidiary or any Damages, but not for purposes of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) determining whether any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)has occurred.
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Limitations on Indemnification. (a) Notwithstanding any other provision The maximum aggregate amount of this Agreement Damages that the Seller or Parent shall each be liable is equal to the contraryaggregate sum achieved by multiplying the Stock Consideration by the closing price of a share of Parent Common Stock on the Closing Date and adding $1,825,000. No Indemnitee shall seek, or be entitled to, indemnification from the Parties' obligations Seller or Parent pursuant to this Article IV are, Sections 10.2 and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, 10.3 hereof until the aggregate amount of Damages incurred or suffered by all Indemnitees under Section 10.2 hereof, with respect to the Buyer Indemnifiable Losses or Seller Indemnifiable Losses(“Seller Indemnity Threshold”), as the case may beand under Section 10.3 hereof, with respect to Parent (“Parent Indemnity Threshold”), exceeds $140,000 (the “Indemnity Basket (as defined in Section 4.3(b)Threshold”), following which and once the indemnifying Party shall indemnifyIndemnitees have incurred or suffered aggregate Damages exceeding the Seller Indemnity Threshold, defend and hold harmless with respect to the Buyer Indemnitees Seller, or the Parent Indemnity Threshold, with respect to Parent, the Indemnitees shall be entitled to indemnity for the entire amount of all such third-party claims. Notwithstanding the foregoing, there shall be no Seller Indemnitees, as Indemnity Threshold in connection with Damages resulting from the case may be, only failure of the Seller to deliver all of the Specified Assets in the form and condition reasonably consistent with Parent’s observation prior to the extent that the Buyer Indemnifiable Losses or Closing and Parent shall be entitled to recover all Damages without giving effect to the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))Threshold; provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties provision shall refer not include any minor damages to the Indemnity Cap Specified Assets that is or was normal and customary in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofshipping.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement anything in Section 8.1 to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required obligated to indemnify, defend indemnify Buyer or hold harmless any other Buyer Indemnitee until aggregate Losses of Buyer and such Buyer Indemnitees under Section 8.1 have exceeded the Basket Amount, in which case Buyer and the other Buyer Indemnitees shall be entitled to indemnification for the total amounts of such Losses. Notwithstanding the immediately preceding sentence, Buyer and Buyer’s Indemnitees shall be entitled to recover for, and the Basket Amount shall not apply as a threshold to, (i) any Losses arising or resulting from fraud or fraudulent misrepresentation with respect to representations and warranties of Seller Indemniteecontained in this Agreement; or (ii) any liabilities for indemnification under Section 8.1(c), 8.1(d), or 8.1(e).
(b) Notwithstanding anything in Section 8.2 to the contrary, Buyer shall not be obligated to indemnify Seller or any other Seller Indemnitee until aggregate Losses of Seller and such Seller Indemnitees under Section 8.2 have exceeded the Basket Amount, in which case Seller and the other Seller Indemnitees shall be entitled to indemnification for the total amounts of such Losses. Notwithstanding the immediately preceding sentence, Seller and Seller’s Indemnitees shall be entitled to recover for, and the Basket Amount shall not apply as a threshold to, (i) any Losses arising or resulting from fraud or fraudulent misrepresentation with respect to representations and warranties of Buyer contained in this Agreement; (ii) Buyer’s obligations to pay the Purchase Price under the ACI APA (including any portion thereof to be paid after the Closing, such as the case may be, until Royalty Consideration or Success Milestone); (iii) any liabilities for indemnification under Section 8.2(c); or (iv) any liability of Buyer under Section 2.9 (Transfer Taxes).
(c) The maximum liability of Seller for any Losses in the aggregate under Section 8.1(a) shall not exceed eight million dollars ($8,000,000) except that there shall be no such limitation on Losses exceeding such amount that arise as a result of (i) a breach of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined representations and warranties in Section 4.3(b)3.1 (Authority and Binding Effect), following which 3.2 (Organization and Standing) or 3.6(i) or 3.6(iii) (Conflicts; Consents); (ii) intentional, knowing or willful breach of this Agreement, fraud, or similar circumstances; or (iii) (for the indemnifying Party avoidance of doubt) indemnification under Sections 8.1(b), 8.1(c), 8.1(d), or 8.1(e).
(d) No claim for indemnification shall indemnify, defend and hold harmless be made pursuant to Section 8.1(a) after one (1) year from the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))Closing Date; provided, however, that claims for indemnification under Section 8.1(a) may be made for up to three (3) years from the Closing Date for Losses that arise as a result of a breach of the representations and warranties in determining whether Section 3.4 (Contracts) and Section 3.5 (Intellectual Property). Notwithstanding the Seller's foregoing, any such claim for indemnification shall continue as to any matter as to which a claim is submitted in writing to Seller prior to such one or three-year period and DQE's liability identified as a claim for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, indemnification pursuant to this Article IV Agreement, until such time as such claims and matters are resolved. In addition, any such claim for indemnification may be brought at any time to the extent it is limited based upon or involves (i) fraud by the Indemnity CapIndemnifying Party; or (ii) claims made under Section 8.1(a) for a breach of Section 3.1 (Authority and Binding Effect), the Parties shall refer to the Indemnity Cap that is 3.2 (Organization and Standing) or was in effect on the date that the Buyer Indemnitee 3.6(i) or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof3.6 (iii) (Conflicts; Consents).
(be) As used Subject to the limitations set forth at this Section 8.3, Buyer may offset against the Royalty Consideration and Success Milestone, as and when the Royalty Consideration and/or Success Milestone becomes due and payable to ACI, any amounts owed to Buyer for indemnification under Section 8.1.
(f) Amounts available pursuant to the Escrow Agreement and the royalty offset described in Section 8.3(e) shall be Buyer’s only recourse for any liability of Seller under Section 8.1(a), except in the case of (i) intentional, knowing or willful breach of any representation, warranty, or covenant in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and ; (ii) the term "Indemnity Cap" shall mean $15,000,000fraud or similar circumstances; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any claims made under Section 8.1(a) for a breach of Section 3.1 (Authority and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the CompanyBinding Effect), Utility, Development, ▇▇▇▇▇▇▇▇ 3.2 (Organization and Standing) or any Company Subsidiary 3.6(i) or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and 3.6 (iii) any fraud committed by PSC(Conflicts; Consents).
(g) Subject to the limitations set forth at Section 9.3 of the ACI APA, AcquisitionBuyer may also offset against the Royalty Consideration and Success Milestone, as and when the Royalty Consideration and/or Success Milestone becomes due and payable, any amounts owed to Buyer Subsidiary designated by PSC ACI for indemnification under Section 9.1 of the ACI APA. Amounts available pursuant to the Escrow Agreement will also be available to satisfy any liability of ACI to Buyer under Section 1.1, 9.1 of the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)ACI APA.
Appears in 1 contract
Limitations on Indemnification. The indemnification obligations contained in this ARTICLE VIII shall be subject to the following limitations:
(a) No indemnification shall be payable pursuant to Section 8.2(a) or Section 8.3(a), other than with respect to (x) a breach of a Fundamental Representation (excluding the Tax Representation) or (y) in the event of fraud or intentional misrepresentation, unless the total amount of all indemnifiable Losses incurred by the Buyer Indemnitees exceeds $[***]; provided that such amount shall be reduced to $[***] immediately with no further action of the parties upon a DOH Denial Release (the “Basket”), whereupon indemnification shall be payable for the amount of all such Losses in excess of the Basket. For purposes of clarity, breaches of the Tax Representation shall be subject to and included in the calculation of the Basket.
(b) The Sellers’ aggregate liability for all Losses for indemnification under Section 8.2(a), other than with respect to (x) a breach of a Fundamental Representation (excluding the Tax Representation) or (y) in the event of fraud or intentional misrepresentation, shall not exceed $[***]; provided that such amount shall be reduced to $[***] immediately and with no further action of the parties upon a DOH Denial Release (the “Rep Cap”) and each Seller’s aggregate liability for all Losses for indemnification under Section 8.3(a), other than with respect to (x) a breach of a Fundamental Representation (excluding the Tax Representation) or (y) in the event of fraud or intentional misrepresentation, shall not exceed such Seller’s Pro Rata Portion of the then current Rep Cap (the “Seller Rep Cap”). Notwithstanding anything to the contrary herein, if the Rep Cap is decreased because of a DOH Denial Release and a Seller has paid Losses in excess of the then current Rep Cap or such Seller’s Seller Rep Cap, then the Parent shall promptly return the portion of such Losses in excess of the Rep Cap or such Seller’s Seller Rep Cap which were paid in cash by such Seller. For purposes of clarity breaches of the Tax Representation shall be subject to and included in the calculation of the Rep Cap.
(c) The Sellers’ aggregate liability for all indemnifiable Losses under Section 8.2 shall not exceed (i) the Merger Consideration (provided that for this purpose each Seller shall be deemed to have actually received its Pro Rata Portion of the Escrow Shares); provided that in the event of a DOH Denial Release, such amount shall automatically be decreased without any other provision further action of this Agreement the parties to the Aggregate Cash Amount (the “Aggregate Cap”). Notwithstanding anything herein to the contrary, the Parties' obligations no Seller shall be responsible for any Losses (including, without limitation, pursuant to this Article IV are, and at all times shall be, subject Section 8.2 or Section 8.3) which exceed the aggregate amount of consideration actually received by such Seller in connection with the Merger (which the parties acknowledge will decrease in the event of a DOH Denial Release) (the “Aggregate Seller Cap”). Notwithstanding anything herein to the limitations contrary, (i) if the Aggregate Cap or the Aggregate Seller Cap is decreased as set forth in this Section 4.3. The Parties 8.6(c) and a Seller has paid Losses in excess of the then current Aggregate Cap or such Seller’s Aggregate Seller Cap, then the Parent shall promptly return the portion of such Losses in excess of the Aggregate Cap and the Aggregate Seller Cap which were paid in cash by such Seller and (ii) no Seller shall be responsible to make a cash payment in the event that the Closing Shares were used to satisfy any indemnifiable Losses hereunder and a portion of Closing Shares are later released to the Parent in accordance with Section 2.13.
(d) No indemnification shall be payable pursuant to Section 8.4(a) (other than with respect to a breach of a Fundamental Representation or in the event of fraud or intentional misrepresentation) unless the total amount of all indemnifiable Losses incurred by the Sellers exceeds the Basket, whereupon the indemnification shall be payable for the amount of all such Losses in excess of the Basket.
(e) Buyer’s and Parent’s aggregate liability for all Losses for indemnification under Section 8.4(a) (other than with respect to a breach of a Fundamental Representation or in the event of fraud or intentional misrepresentation) shall not exceed the Rep Cap.
(f) The aggregate liability of Buyer and Parent for all Losses indemnifiable under Section 8.4 shall not exceed the Aggregate Cap.
(g) Notwithstanding anything to the contrary in this Agreement, and without limiting the effect of any other limitation contained in this ARTICLE VIII, for purposes of computing the amount of any Losses incurred by any Indemnified Party under this ARTICLE VIII, the amount of any Losses recoverable hereunder shall be required reduced by an amount equal to indemnifythe amount of any insurance proceeds that have been actually received by any Indemnified Party in connection with such Losses which, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as had they been received prior to the case may be, until recovery of Losses by the aggregate Indemnified Party from the Indemnifier would have reduced the amount of the Buyer Indemnifiable indemnifiable Losses or Seller Indemnifiable Losses, as that would have been paid by the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, Indemnifier for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))such indemnification claim; provided, however, that in determining whether nothing herein shall require any Indemnified Party to seek recovery for Losses from its insurance policies (or to maintain any such insurance policies). To the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited extent any such insurance proceeds are received by the Indemnity CapIndemnified Party or its applicable Affiliate or designee after any indemnification claim has been paid by the Indemnifier, the Parties shall refer Indemnified Party shall, within 10 days following its receipt thereof, pay to the Indemnity Cap that is or was in effect on Indemnifier the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice applicable portion of such Buyer Indemnifiable Loss or Seller Indemnifiable Lossinsurance proceeds, as if any, received in connection with such indemnification claim (not to exceed the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used amount of Losses from such indemnification claim). Nothing in this Agreement, (i) Agreement in any way restricts or limits the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary general obligation under existing Legal Requirement of an Indemnified Party to take reasonable measures to mitigate any loss which it may suffer or incur by reason of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited breach by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation an Indemnifier of any Environmental Law by PSCrepresentation, Acquisitionwarranty, any Buyer Subsidiary designated by PSC pursuant to Section 1.1covenant, the Company agreement or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)obligation under this Agreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Ascend Wellness Holdings, Inc.)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contraryAgreement, the Parties' indemnification obligations pursuant to provided for in this Article IV are, and at all times Agreement shall be, be subject to the limitations and conditions set forth in this Section 4.310.3.
(a) Any claim by a Buyer Indemnitee for indemnification pursuant to Section 10.1(a) shall be required to be made by delivering written notice to Seller Parties no later than the twelve (12) month anniversary of the Closing Date; provided, that, any claim by a Buyer Indemnitee for indemnification pursuant to Section 10.1(a) with respect to any of the Fundamental Representations may be made at any time. Any covenants made by any Seller Parties, or the Company herein which by their terms are to be performed following the Closing shall survive the Closing in accordance with their respective terms.
(b) The Parties Buyer Indemnitees will make no individual claims unless in excess of Twenty Five Thousand Dollars ($25,000) per single claim and Fifty Thousand Dollars ($50,000) in the aggregate and shall not be required entitled to indemnifyindemnification for any Losses arising under Section 10.1(a) until the aggregate amount of the Buyer Indemnitees’ claims for indemnification under Section 10.1(a) exceeds the Indemnification Threshold and thereafter the Buyer Indemnitees shall be entitled to indemnification under Section 10.1(a) only for amounts in excess of the Indemnification Threshold.
(c) The maximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Sections 10.1(a) as of any given date shall be the then- remaining Indemnity Cap Amount which shall be supported in part by the Holdback Amount; provided, defend that (i) the maximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Sections 10.1(a) with respect to the Fundamental Representations shall not be limited, and (ii) the Buyer Indemnitees shall be entitled to seek recovery for any Losses for which the Buyer Indemnitees are entitled to indemnification in excess of the Holdback Amount as offsets against any Year 1 Earnout and Year 2 Earnout or hold harmless from Seller Parties directly.
(d) The Buyer Indemnitees shall not be entitled to indemnification under this Agreement if, and to the extent that, the Losses are reflected on the Final Adjustment Statement.
(e) The Buyer Indemnitees and the Seller Indemnitees shall take commercially reasonable steps to mitigate any Buyer Indemnitee Loss subject to Section 10.1 or Seller IndemniteeSection 10.2, as the case may be, until the aggregate amount upon becoming aware of the Buyer Indemnifiable Losses any event which would reasonably be expected to, or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofdoes give rise thereto.
(bf) As used in The amount of Losses payable by an indemnitor under this Agreement, Article 10 shall be (i) reduced by any insurance proceeds (other than proceeds from any representation and warranty insurance policy that Buyer may obtain) received with respect to the term "Indemnity Basket" shall mean $250,000claim for which indemnification is sought, less any fees and costs associated with recovering such proceeds, and (ii) reduced by any amounts recovered from any third parties, by way of indemnification or otherwise, with respect to the term "Indemnity Cap" shall mean $15,000,000; providedclaim for which indemnification is sought, however, that on less any fees and costs associated with recovering such proceeds. If any payment is made to an indemnitee in respect of Losses after such Losses have been recovered from the first (1st) anniversary of the Closing Dateindemnitor, the Indemnity Cap indemnitee shall promptly reimburse the indemnitor upon receipt of such payment.
(g) The parties hereto acknowledge and agree that with respect to any claims for indemnification permitted pursuant to this Agreement, the survival periods set forth in Section 10.3(a) shall govern when any such claim may be reduced to, brought and shall thereafter mean, $7,500,000; replace and provided further, supersede any statute of limitations that on may otherwise be applicable.
(h) Notwithstanding the second (2nd) anniversary fact that any indemnitee may have the right to assert claims for indemnification under or in respect of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other more than one provision of this Agreement in respect of any fact, event, condition or circumstance, no indemnitee shall be entitled to recover the contraryamount of any Loss suffered by such indemnitee more than once, the Seller's and DQE's regardless of whether such Loss may be as a result of a breach of more than one representation, warranty, obligation or covenant or otherwise. In addition, any liability for indemnification hereunder shall be determined without duplication of recovery by reason of the following state of facts giving rise to such liability, or a breach of more than one representation, warranty, covenant or agreement, as applicable.
(i) The limitations set forth in this Section 10.3 shall in no way limit the rights of the Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating Indemnitees with respect to (i) any litigationclaims of, existing or threatenedcauses of action arising from, that willful misconduct, fraud or claims of, or causes of action for which the sole remedy sought is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) equitable relief or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach claims of action arising from Section 10.1(b). Buyer Indemnitees shall be entitled to seek recovery for any Losses for which the Buyer Indemnitees are entitled to indemnification arising from Section 10.1(b) in excess of the Holdback Amount as offsets against Year 1 Earnout or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company Year 2 Earnout or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)from Seller Parties directly.
Appears in 1 contract
Sources: Stock Purchase Agreement (DecisionPoint Systems, Inc.)
Limitations on Indemnification. MARINEMAX, NEWCO, the Surviving Corporation and the other persons or entities entitled to indemnification pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for indemnification hereunder against the STOCKHOLDERS until such time as, and solely to the extent that, the aggregate of all claims that such persons may have against the 34 40 STOCKHOLDERS shall exceed the sum of $65,000 (a) the "Indemnification Deductible"); and after such Indemnification Deductible amount has been attained, only claims in excess of such amount shall be indemnified hereunder. The STOCKHOLDERS shall not assert any claim for indemnification hereunder against MARINEMAX or NEWCO until such time as, and solely to the extent that, the aggregate of all claims which the STOCKHOLDERS may have against MARINEMAX or NEWCO shall exceed the sum of $65,000. No person shall be entitled to indemnification under this Section 11 if and to the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in this Agreement. The liability of the Company for breaches of its representations and warranties contained in this Agreement and for any indemnification obligation herein shall cease as of the Effective Time, and MARINEMAX and Surviving Corporation may recover for such breaches and recover for such indemnification only from the MARINEMAX Stock held in escrow pursuant to and as provided in the Escrow and Security Agreement, except to the extent specific and separate indemnification is provided by the STOCKHOLDERS. MARINEMAX and Surviving Corporation may recover for indemnification hereunder only from the MARINEMAX Stock held in escrow pursuant to and as provided in the Escrow and Security Agreement, except to the extent specific and separate indemnification is provided by the STOCKHOLDERS. It is hereby understood and agreed that STOCKHOLDERS may only satisfy an indemnification obligation through payment of stock, such stock to be valued as described immediately below, except as may otherwise be permitted and still preserve pooling-of-interests accounting treatment. Notwithstanding any other provision term of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement shall limit or be deemed to limit any liability or remedy one party may have against any other parties hereto that arises by statute or any applicable federal, state or local law. For purposes of calculating the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 value of the Seller Disclosure ScheduleMARINEMAX Stock received by STOCKHOLDERS, (ii) Excluded Assets, (iii) MARINEMAX Stock shall be valued at $13.00 per share. No provision of this Agreement or in this Section 11 shall limit or be deemed to limit any and all liabilities and obligations liability or remedy one party may have against any other parties hereto with respect to a claim of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)fraud.
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Limitations on Indemnification. (a) Notwithstanding any other provision of anything in this Agreement to the contrary, (i) (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 Parties' obligations pursuant aggregate liability for Losses suffered by the Purchaser Indemnified Parties thereunder exceeds [***], in which event Seller shall be liable for all such Losses from the first dollar and (B) Seller’s aggregate liability under Section 8.01(a) (other than with respect to this Article IV area breach of any of the 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 Indemnified Party thereunder exceeds [***], in which event Purchaser shall be liable for all such Losses from the first dollar; (B) Purchaser’s aggregate liability under Section 8.02(a) (other than with respect to a breach of any of the Purchaser Specified Representations) shall not exceed [***] and at all times (C) Purchaser’s aggregate liability under Section 8.02(a) with respect to a breach of the Purchaser Specified Representations shall be, subject to the not exceed [***]. The limitations set forth in this Section 4.3. The Parties 8.04 shall not be required applicable to indemnifyany Losses incurred in connection with or as a result of fraud, defend intentional or hold harmless any Buyer Indemnitee willful misrepresentation, intentional or willful misconduct or intentional or willful concealment by or on behalf of Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)its Affiliates.
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Limitations on Indemnification. (a) Notwithstanding Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation, willful misconduct (with respect to any other provision of this Agreement covenant or agreement) and the Fundamental Representations, as to the contraryany claim for indemnification pursuant to Sections 11.02(a)(i), or 11.02(b)(i), the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Indemnified Party shall not be required entitled to indemnifyindemnification (i) with respect to any Loss of less than Fifteen Thousand U.S. Dollars ($15,000) (a “De Minimis Loss”) or (ii) any Losses until all Losses (including any De Minimis Loss) exceed, defend in the aggregate, an amount equal to one percent (1%) of the Total Purchase Price actually paid to it or hold harmless any Buyer Indemnitee or Seller Indemniteepaid by it, as the case may be, until pursuant to Article II (the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the “Indemnity Basket (as defined in Section 4.3(b)Threshold”), following in which the indemnifying case such Indemnified Party shall indemnifybe entitled to indemnification for all such Losses (including any De Minimis Loss), defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, but only to the extent that the Buyer Indemnifiable such Losses or the Seller Indemnifiable Losses, as the case may be, (including any De Minimis Loss) exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b))Threshold; provided, however, that any materiality or Material Adverse Effect qualifier will not be taken into account in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or magnitude of the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited damages occasioned by the breach of any representation or warranty for purposes of calculating the Indemnity Cap, the Parties shall refer Threshold (once a breach of any representation or warranty has occurred after giving effect to the Indemnity Cap that is applicable materiality or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofMaterial Adverse Effect qualifiers).
(b) As used Except for fraud (but excluding negligent misrepresentation), intentional misrepresentation or willful misconduct (with respect to any covenant or agreement) or if such liability arises under Sections 11.02(a)(iii), 11.02(a)(iv) or 11.02(a)(v), Seller’s maximum aggregate liability for an indemnification of Losses pursuant to Section 11.02(a) shall not exceed twelve and one-half percent (12.5%) of the Total Purchase Price (the “Cap”), and the liability of Seller Parent shall not exceed the Total Purchase Price if such liability arises from breach of any of the Fundamental Representations, if such liability arises under Section 11.02(a)(ii), or if such liability arises under Sections 11.02(a)(iv) or 11.02(a)(v). Except for fraud, intentional misrepresentation (but excluding negligent misrepresentation) or willful misconduct (with respect to any covenant or agreement), Buyer’s maximum aggregate liability for an indemnification of Losses pursuant to Section 11.02(b) shall not exceed twelve and one-half percent (12.5%) of the Total Purchase Price (the “Cap”), and the liability of Buyer shall not exceed the Total Purchase Price if such liability arises from breach of any of the Fundamental Representations, or if such liability arises under Section 11.02(b)(ii).
(c) The Parties, on behalf of each of their respective Indemnified Parties, waives any right to recover incidental, indirect, special, exemplary, punitive or consequential damages, unless such incidental, indirect, special, exemplary, punitive or consequential damages are awarded to a Person in an indemnifiable Third Party Claim.
(d) Each Person entitled to indemnification hereunder or otherwise to reimbursement for Losses in connection with the transactions contemplated in this AgreementAgreement shall use commercially reasonable efforts to mitigate all Losses.
(e) Any indemnifiable claim with respect to any breach or nonperformance by a Party of a representation, warranty, covenant or agreement shall be net of any insurance proceeds or third party recoveries actually received the Indemnified Party (inet of any costs of collection, deductible, retroactive premium adjustment, reasonably foreseeable premium increases, reimbursement obligation or other cost directly related to the insurance claim in respect of Losses). Except as may be permitted by any insurance policy, if the Indemnifying Party makes any payments on any claim pursuant to Section 11.02, the Indemnifying Party shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnified Party to any insurance benefits or other claims of the Indemnified Party with respect to such claim.
(f) Notwithstanding anything to the term "Indemnity Basket" contrary contained in this Article XI, there shall mean $250,000be no recovery for any Loss or alleged Loss by Buyer under this Article XI, and (ii) the term "Indemnity Cap" Loss shall mean $15,000,000; providednot be included in meeting the stated thresholds hereunder, however, that on to the first (1st) anniversary extent such item has been included in the calculation of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, Date Net Asset Adjustment as determined pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)2.04 hereof.
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Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses Purchaser and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss other Persons or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, entities indemnified pursuant to Section 4.2(a10.1 shall not assert any claim for indemnification hereunder against the Seller or the Shareholders until such time as the aggregate of all claims which such persons may have against the Seller or the Shareholders shall exceed $15,000 (the "Indemnification Threshold"), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it whereupon such claims shall be reduced to, and shall thereafter mean, zeroindemnified in full. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations None of the Seller or the Subsidiaries Shareholders shall assert any claim for indemnification hereunder against Purchaser until such time as the aggregate of all claims which Seller or the Seller (other than any liabilities Shareholders may have against Purchaser shall exceed $15,000, whereupon such claims shall be indemnified in full. The limitation on assertion of claims for indemnification contained in this paragraph shall apply only to claims based upon inaccuracies in, or obligations of the Seller (breaches of, representations and warranties contained in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ this Agreement or any Company Subsidiary document, instrument, certificate or other item required to be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article 10 if and to the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any of the Integrated Assets representation, warranty, covenant or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as other agreement set forth in Section 4.5this Agreement. Notwithstanding any other term of this Agreement, (v) indemnity obligations of the Seller and DQE the Shareholders shall not be liable under this Article 10 for an amount which exceeds the aggregate amount of proceeds received by each Shareholder in respect connection with the transactions contemplated herein. For purposes of certain litigation as set forth in Section 4.6, (vi) indemnity obligations calculating the value of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed DocuNet Stock received by DQE, the Seller, the Company DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made unless an Indemnity Notice, an Unliquidated Indemnity Notice or any Company Subsidiary a Claim Notice (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed as applicable) has been given prior to the Closing Date); in additionapplicable survival period, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)if applicable.
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Limitations on Indemnification. The indemnification provided for in this Article 9 shall be subject to the following limitations and conditions:
(a) Seller shall not be liable for any Losses resulting from any inaccuracy in any representation or warranty of Seller contained in this Agreement unless written notice of entitlement to make a Claim (whether or not any monetary Losses have actually been suffered) with respect to such Losses is given by a Buyer Indemnified Party on or prior to the expiration of the survival of the particular representation or warranty at issue, as set forth in Section 8.1 above.
(b) Buyer shall not be liable for any Losses resulting from any inaccuracy in any representation or warranty of Buyer contained in this Agreement unless written notice of entitlement to make a Claim (whether or not any monetary Losses have actually been suffered) with respect to such Losses is given by a Seller Indemnified Party on or prior to the expiration of the survival of the particular representation or warranty at issue, as set forth in Section 8.1 above.
(c) In the event that Seller is required to make any payment under this Agreement, Seller shall promptly pay to the Buyer Indemnified Party the amount so determined. If there should be a dispute as to the amount or manner of determination of any indemnity obligation owed under this Agreement, Seller shall nevertheless pay when due such portion, if any, of the obligation as shall not be subject to dispute. The difference, if any, between the amount of the obligation ultimately determined as properly payable under this Agreement and the portion, if any, theretofore paid shall bear interest as provided in Section 9.5.
(d) In the event that Buyer is required to make any payment under this Agreement, Buyer shall promptly pay to Seller Indemnified Party the amount so determined. If there should be a dispute as to the amount or manner of determination of any indemnity obligation owed under this Agreement, Buyer shall nevertheless pay when due such portion, if any, of the obligation as shall not be subject to dispute. The difference, if any, between the amount of the obligation ultimately determined as properly payable under this Agreement and the portion, if any, theretofore paid shall bear interest as provided in Section 9.5.
(e) Notwithstanding any other provision of anything in this Agreement to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties Seller shall not be required obligated to indemnifypay any amounts for indemnification or otherwise with respect to Losses, defend or hold harmless any Buyer Indemnitee or Seller Indemniteeunless and until the aggregate monetary value of such Losses exceeds Three Hundred thousand Dollars ($300,0000); provided that, as in the case may be, until event that the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket Three Hundred Thousand Dollars (as defined in Section 4.3(b)$300,000), following which the indemnifying Party Seller shall indemnifybe liable to indemnify Buyer for all Losses in excess of Twenty-Five Thousand Dollars ($25,000), defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only up to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal Losses not to the Indemnity Cap exceed fifty percent (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b50%) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary amount of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant Purchase Price paid in cash to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
Appears in 1 contract
Sources: Stock Purchase Agreement (Ciber Inc)
Limitations on Indemnification. Notwithstanding the foregoing provisions of Section 12(a) above, (a) Notwithstanding Seller shall not be required to indemnify Buyer or any other provision of Buyer Parties under this Agreement to unless the contraryaggregate of all amounts for which an indemnity would otherwise be payable by the Seller under Section 12(a) exceeds $100,000.00 (the “Limitation”) and, the Parties' obligations pursuant to this Article IV are, and at all times shall bein such event, subject to a Buyer Waived Breach (as hereinafter defined), Seller shall be responsible for all amounts of the limitations indemnified loss which exceed the Limitation), subject only to the Cap Limitation (as hereinafter defined), (b) the liability of Seller with respect to the indemnification provided for in Section 12(a) shall not exceed in the aggregate $1,000,000.00 with respect to any claims asserted in a Claims Notice delivered by Buyer during the period commencing with the Closing Date and terminating on April 8, 2012 (the “Cap Limitation”), and (c) if prior to the Closing, Buyer obtains or has actual knowledge of any inaccuracy or breach of any representation, warranty or covenant of Seller contained in this Agreement (a “Buyer Waived Breach”) and nonetheless proceeds with and consummates the Closing, then Buyer and any Buyer Parties shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article 12 for, or any other claim or cause of action under this Agreement, at law or in equity on account of any such Buyer Waived Breach. Notwithstanding the foregoing, the Limitation set forth in this Section 4.3. The Parties 12(c) shall not be required apply to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate amount of the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket an indemnity arising from Section 25 (as defined in Brokerage) and Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap 30 (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing DateBulk Sales Transfer Laws).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Chesapeake Lodging Trust)
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement, (x) except with respect to the Specified Representations and the representations and warranties set forth in Section 3.11, (a) Notwithstanding Seller shall not have any other provision of this Agreement liability under Section 8.01(a) unless the aggregate liability for Losses suffered by Purchaser Indemnitees thereunder exceeds $200,000 (the “Deductible”), and then only to the contrary, the Parties' obligations pursuant to this Article IV are, extent of such excess and at all times shall be, subject to the limitations set forth in this (b) Seller’s aggregate maximum liability under Section 4.3. The Parties 8.01(a) shall not be required exceed an amount equal to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as fifteen percent (15%) of the case may be, until of the aggregate amount of Cash Payments that Purchaser has actually paid to Seller (the Buyer Indemnifiable “Cap”) (it being understood that, so long as a Purchaser Indemnitee makes a claim for indemnification pursuant to Section 8.01(a) within the time proscribed pursuant to Section 8.08, the fact that the Losses recoverable in respect of such claim exceed such Cap as of a particular time shall not preclude such Purchaser Indemnitee from recovering such Losses to the extent such Cap increases by virtue of Purchaser making one or more Milestone Payments) and (y) (a) the aggregate maximum liability of Seller Indemnifiable Lossesunder Section 8.01(a) or Purchaser under Section 8.02(a), in each case, shall not exceed the aggregate amount of Cash Payments that Purchaser has actually paid to Seller, (b) subject to Section 8.09, neither 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, so long as the case may be, exceeds claim for such Loss was timely submitted pursuant to the Indemnity Basket provisions of this Article VIII; (as defined in Section 4.3(b)), following which the indemnifying c) neither Party shall indemnify, defend and hold harmless be liable for any Losses to the Buyer extent the Purchaser Indemnitees or the Seller Indemnitees, as the case may beapplicable, failed to mitigate such Losses in accordance with applicable Laws (provided, that, for clarity, this clause (c) shall only relieve a Party to the extent of any Losses that the Buyer Indemnifiable Losses would not have been incurred had such Purchaser Indemnitees or the Seller Indemnifiable LossesIndemnitees, as the case may beapplicable, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, mitigated in accordance with applicable Laws); (d) neither Party shall be liable for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal any Loss to the Indemnity Cap extent arising from (as defined i) a change in Section 4.3(b)); providedaccounting or taxation Law, howeverpolicy or practice made after the Closing, that in determining whether the Seller's and DQE's liability for other than a particular Buyer Indemnifiable Loss change required to comply with any Law, policy or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was practice in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereof.
(b) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach Law not in force on the date of the Closing or violation any change in Law which takes effect retroactively or occurs as a result of any Environmental Law increase in the rates of taxation [***] = Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment requested under 17 C.F.R. Sections 200.80(b)(4) and 230.406. in force on the Closing Date; (e) neither 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 therefore is asserted in writing (as provided in Section 8.03) by PSCthe Indemnified Party timely in accordance with Section 8.08, Acquisitionfailing which such claim shall be waived and extinguished; and (f) Seller’s aggregate maximum liability under Section 8.01 with respect to Excluded Losses recovered in a Third Party Claim shall not exceed an amount equal to the aggregate amount of Cash Payments that Purchaser has actually paid to Seller (the “Excluded Losses Cap”) (it being understood that, any Buyer Subsidiary designated by PSC so long as a Purchaser Indemnitee makes a claim for indemnification pursuant to Section 1.1, 8.01 within the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC time proscribed pursuant to Section 1.18.08, the Company or any Company Subsidiary (provided fact that the foregoing reference Excluded Losses recoverable in respect of such Third Party Claim exceed the Excluded Losses Cap as of a particular time shall not preclude such Purchaser Indemnitee from recovering such Excluded Losses to the Company extent such Excluded Losses Cap increases by virtue of Purchaser making one or any Company Subsidiary refers to fraud committed on or after the Closing Datemore Milestone Payments).
Appears in 1 contract
Sources: Stock Purchase Agreement (Dova Pharmaceuticals, Inc.)
Limitations on Indemnification. (a) Seller will have no Liability (whether liquidated, contingent or otherwise) to any Purchaser Indemnitee pursuant to Section 6.02 until the total of all Damages with respect to such claims exceeds Fifty Thousand U.S. Dollars (USD $50,000.00) (the “Deductible”), in which case the Purchaser Indemnitee shall only be entitled to recover all Damages in excess of the Deductible after the Deductible has been met. A Purchaser Indemnitee shall first be required to offset any Damages owed by Seller to such Purchaser Indemnitee in respect of an indemnification claim against amounts owed to Seller under the Promissory Note, before Seller is required to make any payment to any Purchaser Indemnitee in respect of such indemnification claim, subject to the other limitations of this Article VI.
(b) Notwithstanding any other provision of this Agreement Agreement, if Purchaser incurs any Damages for which it is entitled to the contrary, the Parties' obligations indemnification from Seller pursuant to this Article IV areVI, Purchaser’s exclusive remedy and at all times sole recourse against Seller related to this Agreement shall be, subject be to offset such indemnifiable Damages against amounts owed to Seller pursuant to the limitations set forth Promissory Note, provided that the maximum amount of Damages that Purchaser shall be permitted in this Section 4.3. The Parties shall not be required to indemnify, defend or hold harmless any Buyer Indemnitee or Seller Indemnitee, as the case may be, until the aggregate to offset against amounts owed to Seller pursuant to the Promissory Note shall be Two Hundred Thousand U.S. Dollars (USD $200,000). For the avoidance of doubt, if the amount of owed to Seller pursuant to the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as the case may be, exceeds the Indemnity Basket Promissory Note is less than Two Hundred Thousand U.S. Dollars (as defined in Section 4.3(b)USD $200,000), following which the indemnifying Party shall indemnify, defend then Seller’s sole and hold harmless the Buyer exclusive Liability to all Purchaser Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Lossesunder this Agreement, in either casethe aggregate, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal be limited to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss or the Buyer's liability for a particular Seller Indemnifiable Loss, in either case, pursuant to this Article IV is limited by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereoflesser amount.
(bc) As used in this Agreement, (i) the term "Indemnity Basket" shall mean $250,000, and (ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement, no party shall be liable under this Article VI for any Damages resulting from or relating to any inaccuracy in or breach of any representation or warranty in this Agreement if the party seeking indemnification for such Damages had Knowledge of such breach before Closing.
(d) Other than for Seller’s Damages related to Purchaser’s breach of Section 4.07 (Right of First Refusal and Purchase Price Protection), Damages shall not include, and no party shall be liable for (directly or indirectly, including through offset against the Promissory Note), any consequential, incidental, indirect, special, punitive or exemplary damages, including any loss of future revenue, income or profits or loss of business reputation or opportunity, except to the contraryextent awarded to a third party in a Third Party Claim for which an Indemnified Party is entitled to indemnification in accordance with the terms of this Article VI.
(e) If any Indemnified Party collects an amount in discharge of a claim in respect of any Damages pursuant to this Article VI and such Indemnified Party (or an Affiliate thereof) subsequently recovers from a third party a sum which is referable to that claim (such that the Indemnified Party has received an amount in connection therewith in excess of its related Damages) (such excess recovery, the Seller's and DQE's liability for “Excess Recovery”), such Indemnified Party shall (or, as appropriate, shall procure that such Affiliate shall) forthwith repay to the following Buyer Indemnifiable Losses Indemnifying Party an amount equal to the Excess Recovery less any costs or expenses incurred by the Indemnified Party in procuring the Excess Recovery (but no more than the amount paid by or on behalf of the Indemnifying Party to the Indemnified Party pursuant to this Article VI).
(f) In the event any Damages by any Indemnified Party are covered by insurance or any indemnity, contribution or other similar right against a third party, each Indemnified Party agrees to use its commercially reasonable efforts to seek recovery under such insurance or indemnity, contribution or similar right. The amount of Damages otherwise recoverable under this Article VI shall not be limited by to the Indemnity Cap: Buyer Indemnifiable Losses relating to amount of any liability or damage that remains after deducting therefrom (i) any litigationinsurance proceeds and any indemnity, existing contribution or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) other similar payment actually received by the Indemnified Party from any third party with respect thereto or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assetsany tax savings actually realized by the Indemnified Party in connection with such Damages.
(g) Upon making an indemnity payment pursuant to this Agreement, (iii) any and the Indemnifying Party will, to the extent of such payment, be subrogated to all liabilities and obligations rights of the Seller or the Subsidiaries of the Seller (other than Indemnified Party against any liabilities or obligations of the Seller (third party in respect of the Company)third party claims to which the payment related. Without limiting the generality of any other provision hereof, Utilityeach such Indemnified Party and the Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above described subrogation rights.
(h) Each Indemnified Party shall use its commercially reasonable efforts to mitigate its expected Damages upon and after becoming aware of any event or condition that would reasonable be expected to give rise to any Damages that are indemnifiable hereunder, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any including responding to Damages in the same manner as the applicable party would respond to such Damages in the absence of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations indemnification provisions of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to this Agreement.
(i) indemnity obligations Any Damages for which any Indemnified Party is entitled to indemnification under this Article VI shall be determined without duplication of recovery by reason of the Parties in respect state of Taxesfacts giving rise to such Damages constituting a breach of more than one representation, as set forth in Section 4.5warranty, (ii) any breach covenant or violation agreement or more than one right to indemnification or by reason of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date)multiple entities being involved.
Appears in 1 contract
Sources: Share Purchase Agreement (Elephant Talk Communications Corp)
Limitations on Indemnification. (a) Notwithstanding any other provision of this Agreement Neither the Seller Group nor the Parent and the Buyer shall be obligated to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations set forth in this Section 4.3. The Parties shall not be required to indemnify, defend indemnify or hold harmless the other in respect of any Buyer Indemnitee Losses suffered, incurred or Seller Indemniteesustained by such party under Section 7.02(a)(i) or Section 7.03(a)(i), as the case may beapplicable, until such Losses equal or exceed $100,000 in the aggregate (the “Threshold”) (at which point such party will be obligated to indemnify the other for the amount of such Losses from the first dollar) and neither the Seller Group nor the Parent and the Buyer Indemnifiable Losses or Seller Indemnifiable Losses, as shall be obligated to indemnify the case may be, exceeds other for the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Indemnitees or the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken together, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to any Losses as a result of any breach or breaches under Section 7.02(a)(i) or Section 7.03(a)(i) in excess of $8,500,000 (the Indemnity Cap (as defined in Section 4.3(b)“Cap”); provided, however, that the Threshold and Cap shall not apply to any Losses resulting from (i) fraud on the part of such party, or (ii) any breach of or inaccuracy in determining whether any of the Seller's Fundamental Representations and DQE's liability for a particular Buyer Indemnifiable Loss or Parent Fundamental Representations, with respect to which the Buyer's liability for a particular obligation to indemnify shall not be limited; provided further, however, that nothing in this Section 7.06 shall limit the obligation of the Seller Indemnifiable Loss, in either case, pursuant Group to this Article IV is limited by indemnify the Indemnity Cap, the Parties shall refer Parent Indemnitees with respect to the Indemnity Cap that is or was items set forth in effect on the date that the Buyer Indemnitee or Seller IndemniteeSections 7.02(a)(ii), as the case may be(iii), delivered a written notice of such Buyer Indemnifiable Loss or Seller Indemnifiable Lossand (iv), as the case may be, to the Seller as contemplated by and Section 4.4 hereof7.02(b).
(b) As used The Parent shall not be obligated to indemnify or hold harmless the Seller Group Indemnitees in this Agreementrespect of any Losses suffered, incurred or sustained by all the Seller Group Indemnitees under Section 7.03(a)(i) until such Losses equal or exceed the Threshold (iat which point the Parent will be obligated to indemnify the Seller Group Indemnitees for the amount of such Losses from the first dollar) and the term "Indemnity Basket" Parent shall mean $250,000not be obligated to indemnify or hold harmless the Seller Group Indemnitees in respect of any Losses suffered, and (iiincurred or sustained by all the Seller Group Indemnitees as a result of any breach or breaches under Section 7.03(a)(i) in excess of the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary of Threshold and the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, pursuant not apply to Section 4.2(a), in which case the Indemnity Cap shall continue to mean $7,500,000 until the third (3rd) anniversary of the Closing Date, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision of this Agreement to the contrary, the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to resulting from (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a), 3.8(b), 3.9(i) or 3.10 fraud on the part of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) any and all liabilities and obligations of the Seller Parent or the Subsidiaries of the Seller (other than any liabilities Buyer or obligations of the Seller (in respect of the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach of or violation inaccuracy in any of any Environmental Law by PSCthe Parent Fundamental Representations, Acquisitionwith respect to which the Parent’s and the Buyer’s obligations to indemnify the Seller Group Indemnitees shall not be limited; provided further, any however, that nothing in this Section 7.06(b) shall limit the obligation of the Parent and the Buyer Subsidiary designated by PSC pursuant to Section 1.1indemnify the Seller Group Indemnitees with respect to the items set forth in Sections 7.03(a)(ii), the Company or any Company Subsidiary on or after the Closing Date(iii), and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Dateiv).
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Limitations on Indemnification. (a) Except as set forth herein, an Indemnitee shall not be entitled to indemnification under Section 6.1(a) or (b), or Section 6.2(a) or (b), as applicable, for any Indemnification Claims made after the expiration of the applicable survival period.
(b) Notwithstanding any other provision of this Agreement anything to the contrary, the Parties' obligations pursuant to this Article IV are, and at all times shall be, subject to the limitations contrary set forth in this Agreement, no Indemnitee shall be entitled to indemnification under Section 4.3. The Parties shall not be required to indemnify, defend 6.1(a) or hold harmless any Buyer Indemnitee or Seller IndemniteeSection 6.2(a), as the case may beapplicable, unless and until the aggregate amount applicable Indemnitee shall have paid or incurred Losses in respect of which such Indemnitee is otherwise entitled to indemnification pursuant to Section 6.1(a) or Section 6.2(a) as applicable that exceed Three Hundred Thousand Dollars ($300,000) (the Buyer Indemnifiable Losses or Seller Indemnifiable Losses“Deductible”) in the aggregate, as at which point the case may be, exceeds Selling Parties will be obligated to jointly and severally indemnify the Indemnity Basket (as defined in Section 4.3(b)), following which the indemnifying Party shall indemnify, defend and hold harmless the Buyer Company Indemnitees or the Company will be obligated to indemnify the Seller Indemnitees, as the case may be, only to the extent that the Buyer Indemnifiable Losses or the Seller Indemnifiable Losses, as the case may be, exceed the Indemnity Basket. In addition, the Seller's and DQE's liability, taken togetherapplicable, for Buyer Indemnifiable Losses and the Buyer's liability for Seller Indemnifiable all such Losses, in either case, as contemplated by this Article IV shall in no event exceed an aggregate amount of dollars equal to the Indemnity Cap (as defined in Section 4.3(b)); provided, however, that in determining whether the Seller's and DQE's liability for a particular Buyer Indemnifiable Loss Deductible shall not apply to (i) Indemnification Claims with respect to breaches of any of the Seller Fundamental Representations or the Buyer's liability for a particular Seller Indemnifiable LossCompany Fundamental Representations, in either case, pursuant to this Article IV is limited or (ii) any Indemnification Claim arising out of any Fraud by the Indemnity Cap, the Parties shall refer to the Indemnity Cap that is any Party or was in effect on the date that the Buyer Indemnitee or Seller Indemnitee, as the case may be, delivered a written notice any of such Buyer Indemnifiable Loss or Seller Indemnifiable Loss, as the case may be, to the Seller as contemplated by Section 4.4 hereofits Affiliates.
(bc) As used Notwithstanding anything to the contrary set forth in this Agreement, from and after the Closing,
(i) for purposes of calculating Losses to which an Indemnitee are entitled under this Article 6, such Losses shall be determined without duplication of recovery by reason of the term "Indemnity Basket" shall mean $250,000state of facts giving rise to such Loss constituting a breach of more than one representation, and warranty, covenant, or agreement;
(ii) the term "Indemnity Cap" shall mean $15,000,000; provided, however, that on the first (1st) anniversary amount of the Closing Date, the Indemnity Cap Losses for which indemnification is available under this Agreement shall be reduced toby the amount of any funds actually received by the Indemnitee with respect to an Indemnification Claim from any Third Party insurers (net of any cost of recovery or increased premiums resulting therefrom) and such Indemnitee shall promptly reimburse the Indemnitor for any subsequent recoveries from such sources if previously indemnified hereunder so as to avoid a double recovery;
(iii) in no event will the Company Indemnitees be entitled, and shall thereafter meanin the aggregate, $7,500,000; and provided further, that on the second (2nd) anniversary of the Closing Date, the Indemnity Cap shall be reduced to, and shall thereafter mean, zero, unless the Indemnity Period has been extended until the third (3rd) anniversary of the Closing Date, to indemnification pursuant to (1) Section 4.2(a6.1(a) (other than in respect of Seller Fundamental Representations, Excluded Taxes, or in the event of Fraud), in which case excess of $18,000,000 and (2) Section 6.1(d), in excess of $10,000;
(iv) in no event will the Indemnity Cap shall continue Seller Indemnitees be entitled, in the aggregate, to mean indemnification pursuant to (1) Section 6.2(a) (other than in respect of Company Fundamental Representations or in the event of Fraud), in excess of $7,500,000 until 18,000,000 and (2) Section 6.2(d), in excess of $250,000; and
(v) in no event will the third (3rd) anniversary Company Indemnitees be entitled, in the aggregate, to indemnification pursuant to this Agreement in excess of the Closing DateTotal Consideration (other than in the event of Fraud).
(d) Notwithstanding anything to the contrary contained elsewhere in this Agreement, upon which it shall be reduced to, and shall thereafter mean, zero. Notwithstanding any other provision solely for purposes of this Agreement Article 6 if any representation or warranty contained in Article III or in any certification delivered by a Selling Party pursuant hereto or referred to herein is limited or qualified based on materiality, including the contraryterms “material”, “materiality” or “Material Adverse Effect”, or similar qualifications (the Seller's and DQE's liability for the following Buyer Indemnifiable Losses shall not be limited by the Indemnity Cap: Buyer Indemnifiable Losses relating to (i) any litigation, existing or threatened, that is required to be set forth in Sections 3.7, 3.8(a“Materiality Scrape”), 3.8(b), 3.9(isuch limitation or qualification shall in all respects be ignored and given no effect for purposes of determining whether any breach of any such representation or warranty has occurred and the amount of Losses resulting from any breach of any such representation or warranty.
(e) or 3.10 of the Seller Disclosure Schedule, (ii) Excluded Assets, (iii) Each Selling Party hereby waives and releases any and all liabilities and obligations rights that each may have under this Agreement or otherwise to assert claims of the Seller or the Subsidiaries of the Seller (other than any liabilities or obligations of the Seller (in respect of contribution against the Company), Utility, Development, ▇▇▇▇▇▇▇▇ or any Company Subsidiary or any of the Integrated Assets or Integrated Liabilities), (iv) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (v) indemnity obligations of the Seller and DQE in respect of certain litigation as set forth in Section 4.6, (vi) indemnity obligations of the Seller and DQE in respect of Environmental Law, as set forth in Section 4.7, and (vii) any fraud committed by DQE, the Seller, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed prior to the Closing Date); in addition, the Buyer's liability for the following Seller Indemnifiable Losses shall not be limited by the Indemnity Cap: Seller Indemnifiable Losses relating to (i) indemnity obligations of the Parties in respect of Taxes, as set forth in Section 4.5, (ii) any breach or violation of any Environmental Law by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary on or after the Closing Date, and (iii) any fraud committed by PSC, Acquisition, any Buyer Subsidiary designated by PSC pursuant to Section 1.1, the Company or any Company Subsidiary (provided that the foregoing reference to the Company or any Company Subsidiary refers to fraud committed on or after the Closing Date).
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