Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10. (b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions. (c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Limitations on Indemnification. (aThe indemnifications provided for in Sections 10.1(a) The Representative’s liability for all claims made under Section 10.01 and 10.1(b) shall be subject to the following limitations: limited as follows:
(i) the Representative Company shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall not be liable for all Losses starting and Buyer Group Members may not recover or offset from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims Milestone Payments in accordance with Section 10.5 under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,00010.1(a)(i) with respect to Losses and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses Expenses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses Buyer Group Members unless and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, until the amount of such Loss and Expense related to each individual claim (or group of related claims, including claims under Section 10.1(b)(i)) exceeds $10,000 (the “De Minimis Threshold”) (it being understood that such De Minimis Threshold shall not be a deductible and that, upon such amount being exceeded and subject to the limitations and conditions set forth in this Article X, the Company shall bear full indemnification responsibility pursuant to Section 10.1(a)(i) for the entire amount of such Loss and Expense);
(ii) Parent shall not be liable for and Buyer Group Members may not recover or offset from the Milestone Payments in accordance with Section 10.5 under Section 10.1(b)(i) with respect to Losses and Expenses incurred by Buyer Group Members unless and until the amount of such Loss and Expense related to each individual claim (or group of related claims, including claims under Section 10.1(a)(i)) exceeds the De Minimis Threshold (it being understood that such De Minimis Threshold shall not be a deductible and that, upon such amount being exceeded and subject to the limitations and conditions set forth in this Article X, Parent shall bear full indemnification responsibility pursuant to Section 10.1(b)(i) for the entire amount of such Loss and Expense);
(iii) Parent and the Company shall not be liable for and Buyer Group Members may not recover or offset from the Milestone Payments in accordance with Section 10.5, unless and until the aggregate of all Losses and Expenses in accordance with Sections 10.1(a)(i), 10.1(a)(ii) (but solely with respect to Section 6.5(d)) and 10.1(b)(i) suffered by any Buyer Group Member is in excess of $100,000 (the “Basket”) and then only for amounts in excess of the Basket;
(iv) in no event shall the aggregate amount required to be paid by Parent and the Company pursuant to (A) Sections 10.1(a)(i) and 10.1(b)(i) with respect to Losses and Expenses incurred by Buyer Group Members (other than (x) with respect to the Company, in respect of Losses and Expenses incurred as a result of inaccuracies of the representations and warranties of the Company contained in Sections 4.3(b) [Authority], 4.7 [Taxes], 4.14 [Title to Property], 4.20 [Environmental Matters], 4.24 [Unlawful Payments] and 4.26 [No Finder] and (y) with respect to the Parent, in respect of Losses and Expenses incurred as a result of inaccuracies of the representations and warranties of Parent contained in Sections 4.3(a) [Authority] and 4.26 [No Finder], as to which this clause (iv) shall not apply) and (B) Sections 10.1(a)(ii) and 10.1(b)(ii) with respect to Losses and Expenses incurred by Buyer Group Members as a result of breaches of the Transition Services Agreement by Parent or the Company, exceed $2,000,000 plus the amount of any Milestone Payments payable pursuant to Section 2.2; and
(v) in no event shall the aggregate amount required to be paid by Parent and the Company with respect to all Losses and Expenses incurred by Buyer Group Members (other than (x) with respect to the Company, in respect of any Excluded Liability and the specific indemnities set forth in Sections 10.1(a)(ii), (iv) and (v) and (y) with respect to Parent, in respect of the specific indemnity set forth in Section 10.1(b)(ii), in each case, as to which there shall be determined without no limitation, except for the limitation by such Material Adverse Effect or materiality qualificationsset forth in clause (iv)(B) above) exceed the Purchase Price.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) Except in the Representative case of indemnification claims under Section 7.2(a)(A) for breaches of or inaccuracies in the Fundamental Representations, the Parent Indemnified Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 7.2(a)(A) relating to breaches of or inaccuracies in the representations or warranties of the Company unless and until the Parent Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $250,000.00 in Losses (the “Deductible”) in the aggregate for all claims, in which event the Parent Indemnified Parties may recover only the excess of such Losses above the Deductible. For the avoidance of doubt, the limitations set forth in this Section 7.3(a)(i) shall not apply to indemnification claims under clauses (B) through (D) of Section 7.2(a).
(ii) The Parent Indemnified Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 7.2(a)(C) with respect to the Special Indemnification Matter unless and until the Parent Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $500,000 in Losses (the “Special Indemnification Matter Deductible”) in the aggregate for all claims, in which event the Parent Indemnified Parties may recover only the excess of such Losses above the Special Indemnification Matter Deductible. For the avoidance of doubt, the limitations set forth in this Section 7.3(a)(ii) shall not apply to indemnification claims under clauses (C) of Section 7.2(a) with respect to matters other than the Special Indemnification Matter.
(iii) Except in the case of indemnification claims under Section 7.2(b)(i) for breaches of or inaccuracies in the Parent Fundamental Representations, the Equityholder Indemnified Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 7.2(b)(i) relating to breaches of or inaccuracies in the representations or warranties of the Parent and Merger Subs unless and until the Equityholder Indemnified Parties, each as a group, shall have paid, incurred, suffered or sustained at least the Deductible in the aggregate for all claims, in which event the Equityholder Indemnified Parties may recover only the excess of such Losses above the Deductible. For the avoidance of doubt, the limitations set forth in this Section 7.3(a)(iii) shall not apply to indemnification claims under clause (ii) of Section 7.2(b).
(i) Except in the case of (i) indemnification claims under Section 7.2(a)(A) for breaches of or inaccuracies in the Fundamental Representations and (ii) indemnification claims under clauses (B) through (D) of Section 7.2(a), in no event shall any Company Indemnifying Party be liable for Losses under Section 7.2(a) in excess of the Indemnity Escrow Fund.
(ii) In no event shall any Company Indemnifying Party be liable for Losses under Section 7.2(a)(C) with respect to the Special Indemnification Matter in excess of the Special Indemnification Escrow Fund.
(iii) Except in the case of (i) indemnification claims under Section 7.2(b)(i) for breaches of or inaccuracies in the Parent Fundamental Representations and (ii) indemnification claims under clause (ii) of Section 7.2(b), in no event shall any Parent Indemnifying Party be liable for Losses under Section 7.2(b) in excess of $5,000,000.
(iv) The aggregate Liability of the Parent Indemnifying Parties, as a group, for Losses under this Article VII and under the Related Agreements shall not exceed $50,000,001 in the aggregate. The aggregate Liability of the Company Indemnifying Parties, as a group, for Losses under this Article VII and under the Related Agreements shall not exceed $50,000,001 in the aggregate; provided, further, that no Contributing Equityholder shall have liability for any Losses in excess of the actual dollar amount and number of shares of Parent Common Stock included in such Contributing Equityholder’s Pro Rata Portion of the Aggregate Merger Consideration. Parent acknowledges that the liability of the Contributing Equityholders under this Agreement is several and not joint (except with respect to amounts in the Indemnity Escrow Fund, Special Indemnification Escrow Fund and Purchase Price Adjustment Escrow Fund).
(c) The amount of any Losses recoverable by any Indemnified Party against any Indemnifying Party under Section 7.2 shall be calculated net of any insurance proceeds actually received by, and/or any indemnification or contribution payments actually paid by any third party to, such Indemnified Party in respect of such Losses in, each case net of all costs directly incurred in such recovery; provided that the Parent Indemnified Party shall be required to seek to obtain such proceeds with respect to the R&W Insurance Policy (to the extent available and to the extent there is insufficient Indemnity Escrow Fund) and shall use its commercially reasonable efforts to seek or obtain any other such insurance proceeds and; provided, further that the Indemnified Parties shall have no liability obligations to seek any third party indemnification or contribution. In the event that an insurance recovery is received by any Indemnified Party with respect to any Losses for claims made under Section 10.01 until which any such Person has been indemnified and which Losses such Person had received from the Indemnifying Parties hereunder, then a refund equal to the aggregate amount of the Losses recovery (net of reasonable costs and expenses incurred by a in recovering such amounts) shall be promptly made to the Paying Agent for distribution to the Company Indemnifying Parties in accordance with their Escrow Pro Rata Portions or to the Parent for distribution to the Equityholder Indemnified Parties, as applicable. Each Indemnified Party shall use commercially reasonable efforts within their control (including incurring such reasonable costs or Parent Indemnified Parties exceeds Five Million Dollars expenses) to mitigate any Loss or potential Loss upon acquiring actual knowledge of any event or occurrence that would reasonably be expected to, or that in fact does, give rise to such Loss.
($5,000,000d) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent No Indemnified Party shall be entitled to recovery pursuant indemnification for punitive damages, unless such damages are actually paid to Section 10.01. No Company Stockholder shall have a third party in respect of a Third Party Claim for which such Indemnified Party is entitled to indemnification under this Article VII.
(e) Notwithstanding any liability for any claims made under Section 10.01 (to the extent not capable other provision of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by this Agreement, the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Indemnifying Parties shall not have any limitation on its liability or indemnification obligation for any Taxes of the Company resulting from any election made under this Article 10Section 338 of the Code with respect to the Mergers.
(bf) The Parent liability for all claims made under Other than the limitations set forth in Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”7.3(b)(iv), provided that if such Parent Threshold is exceeded, nothing in this Agreement shall limit the Parent shall be liable for all Losses starting from the first dollar liability of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result an Indemnifying Party in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsconnection with a claim based on Fraud.
(cg) This Agreement shall not permit duplicative indemnifications in respect of the same Loss or any component thereof if more than one provision of this Agreement gives rise to an indemnification obligation with respect to the same Loss.
(h) In the no event of a breach by a shall any Parent Indemnified Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover or make a claim for any amount included in the calculation of the Net Working Capital as finally determined pursuant to Section 1.9. The amount of Losses to which a Parent Indemnified Party is entitled in respect of a particular matter will be reduced by the amount of any reserve established specifically for such matter which reserve is reflected on the Company’s books and records and in the Estimated Closing Statement as of the Closing Date, but only to the extent such reserve is actually taken into account in the calculation of the Net Working Capital as finally determined pursuant to Section 1.9 (or Closing Indebtedness).
(i) The limitations set forth above in this Article 10 VII and Section 7.3 are cumulative such that one or more of such limitations may apply to a claim by an Indemnified Party for indemnification under this Article VII (and the application of fact that certain provisions in this Article VII reference the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount cumulative nature of such Loss limitations and others shall be determined without limitation by such Material Adverse Effect or materiality qualificationsnot in any way limit the generality of this Section 7.3).
Appears in 1 contract
Sources: Merger Agreement (Crexendo, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made Except in the case of Fraud, the Indemnified Parties, as a group, may not recover any Losses pursuant to a claim under Section 10.01 shall be subject 8.2(a)(i) or a claim under Section 8.2(a)(ix) solely to the following limitations: extent the underlying claim would have been asserted under Section 8.2(a)(i) had there actually been a breach of the relevant representation or warranty in question (a “General Unproven Third Party Claim”), (i) unless and until the Representative Indemnified Parties, as a group, shall have no liability for claims made under Section 10.01 until paid, incurred, suffered or sustained at least $850,000 in Losses in the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “ThresholdBasket Amount”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating Indemnified Parties shall be entitled to recover all Losses, including the Basket Amount, paid, incurred, suffered or sustained by the Indemnified Parties as a group, and (ii) unless such claim or series of related claims exceeds $25,000 (the “Per Claim Threshold”), in which case the fraud Indemnified Parties shall be entitled to recover all Losses (subject to the other applicable limitations set forth herein), including the Per Claim Threshold, paid, incurred, suffered or sustained by the Indemnified Parties with respect to such claim or series of related claims. For the avoidance of doubt, the limitations set forth in this Section 8.3(a) shall not have any limitation on its liability apply to claims under this Article 10clauses (ii) through (viii) of Section 8.2(a), inclusive, or Section 8.2(a)(ix) to the extent not for a General Unproven Third Party Claim.
(b) The Parent liability Subject to Section 8.3(j), the Indemnified Parties sole and exclusive source of recovery for all claims made under Section 10.02 8.2(a)(i) or Section 8.2(a)(ix) solely to the extent with respect to a General Unproven Third Party Claim shall be subject recourse against the cash held in the Indemnity Escrow Fund; provided, however, that (A) to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder extent that an Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting recovers any amount from the first dollar Indemnity Escrow Fund in satisfaction of such Losses and a claim under any of clauses (ii) the Parent’s aggregate liability for all through (viii) of Section 8.2(a), inclusive, such claims recovered amount shall not exceed $35,000,000; except reduce the amount that Losses resulting the Indemnified Parties may recover with respect to claims under Section 8.2(a)(i) and the Indemnified Parties shall be permitted to recover such amount directly from the Indemnifying Parties for claims under Section 8.2(a)(i), and (B) the limitations set forth in this Section 8.3(b) shall not apply to claims under clauses (ii) through (viii) of Section 8.2(a), inclusive, or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable Section 8.2(a)(ix) to the Stockholder Indemnified extent not for a General Unproven Third Party or Stockholder Claim, and, and, subject to Section 8.3(c), the Indemnified Parties shall be permitted to recover directly from the Indemnifying Parties for claims under any of clauses (ii) through (viii) of Section 8.2(a), inclusive, or Section 8.2(a)(ix) to the full extent of the Stockholder Indemnified not for a General Unproven Third Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsClaim.
(c) In Subject to Section 8.3(j), the event maximum liability of each Indemnifying Party for indemnification claims recoverable directly from an Indemnifying Party under Section 8.2(a) and under his, her, or its Joinder Agreement (excluding, for the avoidance of doubt, claims recovered from the Indemnity Escrow Fund) shall be limited, in the aggregate, to a breach by a dollar amount equal to the aggregate portion of the Total Consideration paid or payable to such Indemnifying Party (or his, her, or its designee, assignee, transferee, or successor in interest) pursuant to this Agreement (inclusive of any representation and all amounts deducted or warranty given withheld in respect of Taxes or made any Loan Repayment Amount and the aggregate amount of such Indemnifying Party’s Per Share Expense Fund Consideration).
(d) Subject to Section 8.3(j), the Indemnified Parties shall not be permitted to assert claims under Section 8.2(a)(viii) against any Indemnifying Party other than the Indemnifying Party that committed or alleged to have committed the breach in question.
(e) Except in the case of claims for Fraud, no Indemnified Party shall be required to show reliance on any representation, warranty, certificate or other agreement in order for such Indemnified Party to be entitled to indemnification, compensation or reimbursement hereunder.
(f) The amount of any Loss payable under this Article VIII by an Indemnifying Party shall be net of any amounts actually recovered by the Indemnified Party from insurance policies, net of the following: (i) costs and expenses (including Taxes) incurred by such Indemnified Party or its Affiliates and its and their respective Representatives in procuring such recovery; (ii) any increases in premiums or premium adjustments to the extent attributable to such recovery (applicable to any past, present or future premiums); and (iii) deductibles and other amounts incurred in connection with such recovery; provided, however that, other than with respect to the Indemnity Insurance Policy, the Indemnified Parties shall have no obligation to seek recovery under any insurance policies or to maintain any insurance policies for any period of time.
(g) The Indemnified Parties shall, to the extent required by applicable Law, use commercially reasonable efforts to mitigate Losses indemnifiable under this Article VIII; provided, however, that, notwithstanding the foregoing or anything else herein to the contrary, other than with respect to the Indemnity Insurance Policy, in no event shall any of the Indemnified Parties be required to assert any claim or otherwise seek recourse any against -61- any insurers, insurance policies, customers, suppliers, resellers, vendors, partners, or other Representatives of any of the Indemnified Parties or their respective Affiliates.
(h) If and solely to the extent that an amount of Losses in connection with an indemnifiable matter was already specifically taken into account in the calculation of the Final Net Working Capital pursuant to Section 7.11, the same amount of such Losses may not be recovered under this Article VIII.
(i) No Indemnifying Party shall be liable for any Losses relating to the amount or availability of any net operating loss, tax credit, or other tax attribute of the Company following the Closing.
(j) Notwithstanding anything herein to the contrary, nothing in this Agreement that is qualified so as shall limit (i) the liability of an Indemnifying Party, or the rights of any Indemnified Party against an Indemnifying Party, for Fraud committed by such Indemnifying Party or of which such Indemnifying Party had actual knowledge on or prior to only the Closing Date, or (ii) the right of Acquiror or any other Indemnified Party to pursue remedies under any Related Agreement against the parties thereto. Notwithstanding anything herein to the contrary, this Article VIII shall not be deemed breached applicable, and nothing in this Article VIII shall limit the liability of any party hereto for any breach of any representation, warranty, covenant or agreement contained in this Agreement, any Related Agreement or any certificates or other instruments executed and delivered by any party in connection with the transactions contemplated by this Agreement, if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and Merger does not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsclose.
Appears in 1 contract
Sources: Merger Agreement (Pluralsight, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made Buyer Indemnitees shall not be entitled to recover under Section 10.01 SECTION 12.01 unless a claim has been asserted by written notice, specifying the details of the matter giving rise to the indemnity claim to HGHC on or prior to the two (2) year anniversary of the Closing Date; provided, however that there shall be subject no limitation on the time for submitting a claim for or arising out of or related to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party Merger Lawsuits, or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) an allegation of breach of the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars representations in the first two sentences of SECTION 2.02, clause ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)a) of the Company Disclosure Schedules shall constitute fourth sentence in SECTION 2.02 and SECTION 2.03; provided, further, that the indemnity claim made pursuant to SECTION 2.09 must be asserted within sixty (60) days of the end of the applicable statute of limitations period, after giving effect to any extensions thereof (and including any applicable statute of limitations for a Loss taxable year of the Surviving Corporation for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any breach of SECTION 2.09(a) could result in an increased liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any Taxes of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Surviving Corporation).
(b) The Parent liability for all claims made Buyer Indemnitees shall not be entitled to recover under Section 10.02 shall be subject to the following limitationsSECTION 12.01: (i) to the Parent shall have no liability for such claims until extent the aggregate amount claims for Indemnity Losses of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars (Buyer Indemnitees are less then $5,000,000) 1,000,000 (the “Parent Threshold”"Basket") or exceed $13,950,000 (whether such amounts have been paid directly by HGHC or out of the Indemnification Escrow, collectively, the "Cap"), except as otherwise provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000in SECTION 12.08; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached PROVIDED THAT if the representation would have a Material Adverse Effect on a Party aggregate of all claims for Indemnity Losses equals or is otherwise qualified as to “materiality” or “in any material respect,” exceeds the Basket, then for purposes of determining the amount of Loss for which a Party Buyers shall be entitled to recover for all such Indemnity Losses subject to the limitations in this SECTION 12.06(b) or (ii) to the extent the subject matter of the claim is covered by insurance (including title insurance) and such insurance is collected by 50 the Buyer Indemnitees; or (iii) to the extent that the matter in question, taken together with all similar matters, does not exceed the amount of any reserves with respect to such matters which are reflected in the Financial Statements; or (iv) to the extent the matter in question was taken into account in the computation of the Merger Consideration pursuant to this Article 10 (ARTICLE I. To the extent the subject matter of a claim is covered by a reserve reflected in the Financial Statements, the value of such claim shall not be included in determining whether the aggregate Indemnity Losses equal or exceed the Basket. If HGHC pays Buyer Indemnitees for a claim and subsequently insurance in respect of such claim is collected by the Buyer Indemnitees then Buyer Indemnitees shall remit the money back to HGHC. In addition, if HGHC pays Buyer Indemnitees for a claim and subsequently the Buyer Indemnitees or their shareholders realize a net Tax benefit as a result of any expense, payment or other item giving rise to such indemnification payment, the Buyers shall pay to HGHC the aggregate amount of such net Tax benefit as soon as practicable following the realization of such benefit. The guidelines for determining the amount and timing of the realization, and the application provision for subsequent adjustments, of the Threshold and the Parent Thresholdnet Tax benefits set forth in SECTION 11.02(b) and not shall apply for purposes of determining whether a breach this SECTION 12.06(b). HGHC and the Buyers agree to treat any payments in respect of Indemnity Losses as adjustments to the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsMerger Consideration.
Appears in 1 contract
Sources: Merger Agreement (Argosy Gaming Co)
Limitations on Indemnification. Notwithstanding anything in Section 7.2 to the contrary:
(a) The Representative’s liability Stockholder Indemnifying Parties shall not be liable for all claims made under Section 10.01 shall be subject to the following limitations: Losses (i) the Representative shall have no liability for in respect of claims made under Section 10.01 until the aggregate amount of the Losses incurred by a any Parent Indemnified Party or for indemnification under Section 7.2(a)(i) unless the total of all Losses in respect of claims made by the Parent Indemnified Parties for indemnification exceeds Five Million Dollars ($5,000,000) 500,000 (the “Threshold”)) in the aggregate, provided that if whereupon the total amount of all such Threshold is exceeded, the Representative shall be liable for all Losses starting incurred by Parent Indemnified Parties from the first dollar of such Losses, without regard to the Threshold shall be recoverable by Parent Indemnified Parties in accordance with the terms hereof or (ii) once the Representative’s aggregate liability for total of all claims under Section 10.01 such Losses exceeds the Threshold in the aggregate, in respect of any individual matter thereafter unless and until the amount of Losses with respect to such matter exceeds $25,000; provided, however, that the foregoing shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating apply to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) any breaches of the Fundamental Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated Representations or in the making event of fraudulent misrepresentations fraud or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10willful misconduct.
(b) The Parent liability shall not be liable for all claims made under Section 10.02 shall be subject to the following limitations: Losses (i) in respect of claims made by any Company Indemnified Party for indemnification under Section 7.2(b)(i) unless the Parent total of all Losses in respect of claims made by the Company Indemnified Parties for indemnification shall have no liability for such claims until exceed the aggregate Threshold in the aggregate, whereupon the total amount of the all such Losses incurred by a Stockholder Indemnified Party or Stockholder the Company Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and without regard to the Threshold shall be recoverable by the Company Indemnified Parties in accordance with the terms hereof or (ii) once the Parent’s aggregate liability for total of all such claims Losses exceeds the Threshold in the aggregate, in respect of any individual matter thereafter unless and until the amount of Losses with respect to such matter exceeds $25,000; provided, however, that the limitations set forth in this Section 7.3(b) shall not exceed $35,000,000; except that Losses resulting from apply to any breaches of Fundamental Parent Representations or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party event of fraud or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionswillful misconduct.
(c) In The maximum aggregate amount for which the Stockholder Indemnifying Parties shall be liable to all Parent Indemnified Parties for Losses in respect of claims made by any Parent Indemnified Party for indemnification under Section 7.2(a)(i) shall not exceed $4,812,717.55; provided, however, that the foregoing shall not apply to any breaches of Fundamental Company Representations or in the event of fraud or willful misconduct.
(d) The maximum aggregate amount for which Parent shall be liable to all Company Indemnified Parties, taken together, for Losses under this Section 7.2(b)(i) shall not exceed $4,812,717.55; provided, however, that the foregoing shall not apply to any breaches of Fundamental Parent Representations or in the event of fraud or willful misconduct.
(e) The parties hereto agree that the Escrow Consideration (exclusive of the PPA Escrow Amount) shall, subject to the terms and conditions of the Escrow Agreement, be the sole source of recovery for claims for indemnification pursuant to Section 7.2(a)(i); provided, however, that nothing in this Section 7.3(e) shall limit (i) the remedies available to any party hereto (A) for any breaches of Fundamental Company Representations or (B) for fraud or willful misconduct or (ii) the indemnification or other obligation or liability of any Company Stockholder under any Support Agreement, Letter of Transmittal or other agreement contemplated by this Agreement. Except for breaches involving fraud or willful misconduct, the maximum aggregate amount for which the Stockholder Indemnifying Parties shall be liable to all Parent Indemnified Parties for Losses in respect of breaches of Fundamental Company Representations and/or Special Tax Provisions shall not exceed the amount actually received by such Stockholder Indemnifying Party received hereunder. To the extent that the Parent Indemnified Parties are entitled to indemnification pursuant hereto for any Losses, the Parent Indemnified Parties shall be required to first submit such claim related to such Losses, and any dispute with respect to such claim related to such Losses shall be resolved, in accordance with the terms of the Escrow Agreement prior to any such Parent Indemnified Parties seeking payment directly from any Stockholder Indemnifying Parties with respect to such Losses to the extent there are sufficient available Escrow Consideration to indemnify the Parent Indemnified Parties for the full amount of the indemnifiable portion of such Losses; provided, however, that if there is insufficient available Escrow Consideration to indemnify the Parent Indemnified Parties for the full amount of the indemnifiable portion of such Losses, such Parent Indemnified Parties shall be permitted to seek indemnification directly from the Stockholder Indemnifying Parties to the extent of any shortfall, subject to the limitations set forth in this Section 7. For the avoidance of doubt, the obligations of Parent Indemnified Parties set forth in the foregoing sentence shall not apply to any indemnification or other obligation or liability of any Stockholder Indemnifying Party under any Support Agreement, Letter of Transmittal or other agreement contemplated by this Agreement.
(f) For purposes of this Section 7 (including, without limitation, for purposes of (i) determining whether or not there has been a breach by of a Party of any representation or warranty given by the Company or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining Parent and (ii) calculating the amount of Losses incurred arising out of or relating to any such breach), all representations and warranties of the Company in Section 2 and of the Parent and Merger Sub in Section 3 and all covenants in Section 4 shall be construed as if the word “material” and any reference to “Company Material Adverse Effect” (and variations thereof) were omitted from such representation or covenant, as the case may be.
(g) The amount of any Loss for which a indemnification is provided under this Section 7 shall be net of (i) any amounts actually recovered by the relevant Parent Indemnified Party or Company Indemnified Party, as applicable, pursuant to any indemnification by or indemnification agreement with any third party and (ii) any insurance proceeds actually recovered, or other sources of reimbursement actually recovered, as an offset against such Loss (and no right of subrogation shall accrue to any insurer or third party indemnitor hereunder to the extent permitted under the relevant agreement with such insurer or indemnitor). If the amount to be netted pursuant to this Section 7.3(g) against any indemnification payment required pursuant to Section 7.2(a) or 7.2(b) is determined after such indemnification payment is made (whether from the Escrow Consideration or otherwise), then the relevant Parent Indemnified Party or Company Indemnified Party, as applicable, shall repay to the relevant Stockholder Indemnifying Parties (or, if applicable, restore Escrow Consideration) or Parent, as applicable, promptly after such determination, any amount that would not have been paid to such Parent Indemnified Party or Company Indemnified Party, as applicable (including, if applicable, from the Escrow Consideration), pursuant to this Section 7(g) had such determination been made at the time of such payment. The Parties agree that the relevant Parent Indemnified Party or Company Indemnified Party, as applicable, shall (A) not have any obligation to pursue the recovery of amounts referred to in clause (i) of this Section 7(g) and (B) be obligated to pursue the recovery of amounts referred to in clause (ii) only if such pursuit is reasonable, taking into account the effort necessary to pursue such recovery and any adverse consequences resulting, or reasonably expected to result, from such pursuit to such party.
(h) Notwithstanding anything contained herein to the contrary and in furtherance of and without limiting the foregoing, none of the Parent Indemnified Parties or Company Indemnified Parties shall be entitled to recover indemnification pursuant to this Article 10 Section 7 for its own exemplary, punitive or other similar damages; provided, however, that, subject in each case to the other limitations contained in this Section 7, nothing herein shall prevent any such party from being indemnified pursuant to this Section 7 for (and i) all components of awards against them in Third Party Claims for which indemnification is provided pursuant to Section 7 or (ii) its own reasonably foreseeable consequential damages, including, without limitation, claims for diminution of value with respect to the application of the Threshold and the Parent ThresholdCompany, provided that any such indemnification in accordance with (ii) and not for purposes of determining whether a breach of the representation has occurred, above shall be limited to the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsthen-remaining in the Escrow Fund (as defined in the Escrow Agreement).
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability To the extent that the KM Indemnified Parties are entitled to indemnification for all claims made under Liabilities pursuant to Section 10.01 10.1, the Parent Parties shall be subject to the following limitations: not have any Liability (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars (any individual indemnifiable item which does not exceed $5,000,000) 100,000 (the “Individual Indemnity Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, and (ii) in respect of those individual indemnifiable items that exceed the Representative’s Individual Indemnity Threshold, unless the aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item Liabilities relating to Taxes all such individual indemnifiable items exceed in the aggregate, one percent (1%) of an amount equal to the Purchase Price minus the Proportionate Debt Amount (the “Deductible Amount”), and then only to the extent of any such excess; provided that is referenced in Schedule 4.10 (x) any materiality or material adverse effect qualifier to any representation or warranty (other than Schedule 4.10(b)Excluded Materiality Matters) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party subject to indemnification shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 disregarded and (y) to the extent not capable provided in Section 6.7, the Post-Signing Schedule Updates shall be effective with respect to the representations and warranties, in each case, for purposes of being paid by determining whether the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations Individual Indemnity Threshold or the taking Deductible Amount shall have been exceeded. In no event shall the Parent Parties’ aggregate liability to the KM Indemnified Parties exceed twenty percent (20%) of fraudulent actions by an amount equal to the Company or any of Purchase Price minus the parties referred to in Proportionate Debt Amount (the definition of Knowledge of “Ceiling Amount”). Notwithstanding the Companyforegoing, in which case the Company Stockholder directly participating in the fraud this Section 10.9(a) shall not have apply to indemnification for Liabilities relating to HS Fundamental Representations or to any limitation on its liability indemnification obligation under this Article 10Section 10.1(b), (c) or (d).
(b) The In the event a KM Indemnified Party makes any claim pursuant to Section 10.1(a) relating to a breach of Sections 11.1 or 11.2 with respect to rights-of-way, easements and servitudes (an “Easement Claim”), the Parent liability for all claims made under Section 10.02 Parties shall be subject to elect one of the following limitationsremedies: (i) pay the KM Indemnified Parties liquidated damages in an amount equal to $500 per rod multiplied by the greater of (x) the number of rods affected by such breach or (y) the number of rods required to circumvent such breach or (ii) assume all of the Liabilities associated with such breach in which event such claim shall be deemed to be an Indemnity Claim for purposes of Sections 10.6 through 10.8, in each case, subject to the limitations set forth in Sections 10.9(a), (c) and (d). The Parent Parties shall make such election by written notice to the KM Indemnified Party within twenty (20) days following receipt of notice of the Easement Claim. The failure to make such election within such twenty (20) day period shall be deemed an election by the Parent Parties to assume the Liabilities under clause (ii) above. The payment of liquidated damages pursuant to this Section 10.9(b) with respect to an Easement Claim shall have no liability for such claims until not affect the aggregate amount right of the Losses incurred by a Stockholder Indemnified Party or Stockholder JV Indemnified Parties exceeds Five Million Dollars to assert a subsequent claim associated with a subsequent Indemnity Claim based on the same underlying breach. The foregoing provisions of this Section 10.9(b) shall not apply to an Indemnity Claim relating to a breach of Sections 11.1 or 11.2 nor to any Easement Claim that could adversely affect the operation of the Eagle Ford Business in a material respect ($5,000,000) (collectively, the “Parent ThresholdOther Title Claims”). With respect to any Other Title Claim, provided that if such Parent Threshold is exceededthe KM Indemnified Parties shall be entitled to exercise the rights to indemnity pursuant to Section 10.1, subject to the limitations set forth in Section 10.9(a), (c) and (d). Notwithstanding the foregoing but without affecting the rights of KM Indemnified Parties, the Parent Parties shall have the non-exclusive right, at their expense, to seek to cure title defects underling any Other Title Claim. Any indemnity obligation payment by any Parent Parties to any KM Indemnified Party (other than Newco) with respect to Liabilities relating to Easement Claims shall be liable for all Losses starting from the first dollar of reduced by 75% if such Losses indemnity obligation arises under Section 11.1 and (ii) the Parent’s aggregate liability for all 50% if such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsindemnity obligation arises under Section 11.2.
(c) In the event of a breach calculating any amount to be paid by a an Indemnifying Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application reason of the Threshold and the Parent Threshold) and not for purposes provisions of determining whether a breach of the representation has occurredthis 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 Loss shall proceeds.
(d) None of the Parent Parties, the KM Parties, Newco or KinderHawk will be determined without limitation liable as an indemnitor under this Agreement for any punitive, exemplary, speculative, or special damages suffered or incurred by the Indemnified Party or Parties, except to the extent such Material Adverse Effect or materiality qualificationsdamages result pursuant to Indemnity Claims (excluding the Parties hereto and their Affiliates, including Newco).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Petrohawk Energy Corp)
Limitations on Indemnification. Notwithstanding any other provision of this Agreement:
(a) The Representative’s liability for all claims made NO CLAIMS OR CAUSES OF ACTION ARISING UNDER OR RESULTING FROM THIS AGREEMENT OR ANY OF THE TRANSACTIONS MAY BE ASSERTED BY ANY PERSON FOR PUNITIVE, SPECIAL, EXEMPLARY, CONTINGENT, INCIDENTAL, SPECULATIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR REVENUE), EXCEPT TO THE EXTENT SUCH DAMAGES WERE REASONABLY FORESEEABLE.
(b) Except in the case of Fraud, Seller shall not be required to indemnify any Purchaser Indemnified Party under Section 10.01 8.2(a)(i) or Section 8.2(b) for any Loss unless the amount of such Loss with respect to any individual matter, or group of matters arising out of the same or a substantially similar set of facts, circumstances or events, exceeds $10,000, and any individual Losses disregarded pursuant to this Section 8.5(b) shall not be subject applied toward the determination of the maximum liability under Section 8.5(j).
(c) The Seller shall not be liable to the following limitations: Purchaser Indemnified Parties for indemnification under this Article VIII for any Losses arising under (i) the Representative shall have no liability for claims made under Section 10.01 8.2(a)(ii) until the aggregate amount of the such Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) 100,000 (the “ThresholdDeductible”), provided that if such Threshold is exceeded, at which point the Representative Purchaser Indemnified Parties shall be liable for entitled to all recoverable Losses starting from only in excess of the first dollar of such LossesDeductible, (ii) Section 8.2(f) until the Representativeaggregate amount of such Losses exceeds $250,000 (the “Specified Litigation Deductible”), at which point the Purchaser Indemnified Parties shall be entitled to all recoverable Losses only in excess of the Specified Litigation Deductible, or (iii) Section 8.2(g) until the aggregate amount of such Losses exceeds the deductible applicable to the Specified Employee Claims pursuant to the Seller’s insurance policy covering such Specified Employee Claims (the “Specified Employee Claims Deductible”), at which point the Purchaser Indemnified Parties shall be entitled to all recoverable Losses only in excess of the Specified Employee Claims Deductible.
(d) The aggregate liability amount of all Losses for all claims under which the Seller shall be liable pursuant to (i) Section 10.01 8.2(a)(i), Section 8.2(b), Section 8.2(c), Section 8.2(d), Section 8.2(e), Section 8.2(f), Section 8.2(g) and Section 8.2(h) shall not exceed Fifty Million Dollars ($50,000,000) the aggregate amount of the Purchase Price and (iiiii) no item relating to Taxes that is referenced in Schedule 4.10 Section 8.2(a)(ii) shall not exceed $4,000,000 (other than Schedule 4.10(bthe “Indemnification Cap”).
(e) The aggregate amount of the Company Disclosure Schedules shall constitute a Loss all Losses for which a Parent the Purchaser shall be liable under Section 8.3 shall not exceed the Indemnification Cap.
(f) The amount an Indemnified Party shall be entitled to receive from the Indemnifying Party with respect to any Loss shall be reduced by and net of any recovery pursuant payable to Section 10.01such Indemnified Party from any other Person with respect to such Loss (including insurance proceeds, indemnification rights, counterclaims, warranties, subrogation actions and the like). No Purchaser shall, and shall cause the Company Stockholder shall have and each applicable Company Subsidiary to, use commercially reasonable efforts to seek recovery under all insurance policies covering any liability for any claims made under Section 10.01 (Losses to the same extent as they would if such Losses were not capable of being paid subject to indemnification hereunder. In the event that an insurance or other third party recovery is made by Purchaser, the Representative) unless that Company, a Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company Subsidiary or any of their Affiliates with respect to any Losses for which any Purchaser Indemnified Party has been indemnified by the parties referred Seller hereunder, then a refund equal to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent recovery shall promptly be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable made to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsSeller.
(cg) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a No Purchaser Indemnified Party shall be entitled to recover receive indemnification for any Losses to the extent such Losses or the matters giving rise thereto were taken into account in the determination of the Closing Date Net Working Capital or in any component of the Closing Date Debt or Company Transaction Expenses (it being the intention of the Parties that the procedures set forth in Section 2.4 shall constitute the sole and exclusive remedies for such claims).
(h) After becoming aware of any event or occurrence that could reasonably be expected to give rise to an indemnification right hereunder, each Person entitled to indemnification shall take all commercially reasonable steps to mitigate Losses arising therefrom.
(i) The Seller shall not be required to indemnify any Purchaser Indemnified Party to the extent of any Losses caused by or resulting from the gross negligence or willful misconduct of Purchaser.
(j) In no event shall the cumulative indemnification obligations of the Seller under Section 8.2(a)(i) or Purchaser under Section 8.3 exceed the Purchase Price (as adjusted pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredSection 2.4); provided, however, the amount of such Loss foregoing limitations shall not apply to or otherwise limit any claims relating to Fraud.
(k) Any indemnification obligation under this Agreement shall be determined without limitation duplication of recovery by reason of the state of facts giving rise to such Material Adverse Effect obligation constituting a breach of more than one representation, warranty, covenant or materiality qualificationsagreement hereunder.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary set forth in this Agreement:
(i) the Representative maximum aggregate amount of indemnifiable Losses that may be recovered from the Seller Parties by the Purchaser Indemnified Parties pursuant to Section 6.3(a) (other than with respect to claims for inaccuracy or breach of Fundamental Reps or fraud) shall have be Five Million Two Hundred Fifty Thousand and 00/100 Dollars ($5,250,000.00);
(ii) other than in the case of fraud, in no liability event shall the aggregate amount of Losses for claims made which the Seller Parties are obligated to indemnify the Purchaser Indemnified Parties under Section 10.01 6.3 exceed the Purchase Price;
(iii) the maximum aggregate amount of indemnifiable Losses that may be recovered from the Purchaser Parties by the Seller Indemnified Parties pursuant to Section 6.2(a) (other than with respect to claims for inaccuracy or breach of Purchaser Fundamental Reps or fraud) shall be shall be Five Million Two Hundred Fifty Thousand and 00/100 Dollars ($5,250,000.00);
(iv) other than in the case of fraud, in no event shall the aggregate amount of Losses for which the Purchaser Parties are obligated to indemnify the Seller Indemnified Parties under Section 6.2 exceed the Purchase Price;
(v) the Seller Parties shall not be liable to any Purchaser Indemnified Party for any claim for indemnification pursuant to Section 6.3(a) (other than with respect to claims for inaccuracies in or breaches of the Fundamental Reps, fraud or a claim for indemnity for the failure described in Section 6.3(d)) unless and until the aggregate amount of indemnifiable Losses that may be recovered from the Losses incurred by a Parent Indemnified Party Seller Parties equals or Parent Indemnified Parties exceeds Two Hundred Twenty-Five Million Thousand and 00/100 Dollars ($5,000,000225,000.00) (the “ThresholdBasket Amount”), provided that if such Threshold is exceeded, in which case the Representative Seller Parties shall be liable for all indemnifiable Losses starting from in excess of the first dollar of such Losses, Basket Amount;
(iivi) the Representative’s aggregate liability for all claims under Section 10.01 Purchaser Parties shall not exceed Fifty Million Dollars ($50,000,000be liable to any Seller Indemnified Party for any claim for indemnification pursuant to Section 6.2(a) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)with respect to claims for inaccuracies in or breaches of Purchaser Fundamental Reps or fraud) unless and until the aggregate amount of indemnifiable Losses that may be recovered from the Purchaser Parties equals or exceeds the Basket Amount, in which case the Purchaser Parties shall be liable for all indemnifiable Losses in excess of the Company Disclosure Schedules shall constitute a Loss for which a Parent Basket Amount;
(vii) no Indemnified Party shall be entitled to recovery pursuant recover any amount relating to Section 10.01. No Company Stockholder shall have any liability for any claims made matter arising under Section 10.01 (one provision of this Agreement to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party (or Stockholder other Purchaser Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by Purchaser Indemnified Party, or other Seller Indemnified Parties in the event of a Party Seller Indemnified Party) has already recovered such amount with respect to such matter pursuant to that or other provisions of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Agreement;
(viii) no Indemnified Party shall be entitled to recover any Loss to the extent that the Loss comprising a claim (or part thereof) with respect to such matter has been included in the calculation of the Closing Net Working Capital Adjustment;
(ix) Seller Parties shall not be liable to any Purchaser Indemnified Party for any claim for indemnification under this Article VI for any Losses based upon or arising out of any inaccuracy in or breach of any of the representations or warranties of the Seller Parties contained in this Agreement if any of the Purchaser Parties had Knowledge of such inaccuracy or breach prior to the Closing; and
(b) in no event shall an Indemnifying Party have liability to the Indemnified Party for any consequential, special, incidental, punitive or exemplary damages, except if and to the extent any such damages are recovered against an Indemnified Party pursuant to a Third Party Claim. The parties acknowledge and agree that, following the Closing, their sole and exclusive remedy with respect to any and all claims relating to this Article 10 (Agreement and the application transactions contemplated hereby (other than claims arising from fraud or intentional or willful misconduct) shall be pursuant to the indemnification provisions set forth in this ARTICLE VI. In furtherance of the Threshold foregoing, each party hereby waives on its own behalf and (in the Parent Threshold) and not for purposes of determining whether a breach case of the representation has occurredPurchaser Parties, on behalf of the amount Purchaser Indemnified Parties and in the case of such Loss the Seller Parties, on behalf of the Seller Indemnified Parties) to the fullest extent permitted under Law, any and all claims it may have against any of the other parties or their Affiliates arising under or based upon this Agreement, any document or certificate delivered in connection herewith, any Law or otherwise, except pursuant to the indemnification provisions set forth in this ARTICLE VI. Nothing in this Section 6.4(b) shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be determined without limitation by such Material Adverse Effect entitled or materiality qualificationsto seek any remedy on account of any Person’s fraudulent, intentional or willful misconduct.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability No claim may be made or asserted nor may any Action be commenced pursuant to Sections 8.2 or 8.3 against any Party for all claims made under Section 10.01 shall be subject breach of any representation, warranty or covenant contained herein, unless written notice of such claim or Action has been given by the Indemnified Party to the following limitations: Indemnifying Party, describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or Action, on or prior to the date on which the representation or warranty on which such claim or Action is based ceases to survive as set forth in Section 8.1.
(b) Notwithstanding anything to the contrary contained in this Agreement:
(i) the Representative other than with respect to any breach or inaccuracy of any Designated Representation, Sellers shall have no liability not be liable for claims made under any claim for indemnification pursuant to Section 10.01 8.2(a), unless and until the aggregate amount of indemnifiable Losses that may be recovered from Sellers pursuant to Section 8.2(a) equals or exceeds one percent (1%) of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) Purchase Price (the “ThresholdDeductible Amount”), provided that if such Threshold is exceeded, the Representative at which point Sellers shall be liable for all the amount of those Losses starting from indemnifiable pursuant to Section 8.2(a) in excess of the first dollar of such Losses, Deductible Amount;
(ii) the Representative’s aggregate liability for all claims other than with respect to any breach or inaccuracy of any Designated Representation, no Losses may be claimed under Section 10.01 8.2(a) by any Indemnified Party, nor shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced any Losses be reimbursable or included in Schedule 4.10 (other than Schedule 4.10(b)) of calculating the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated aggregate indemnifiable Losses set forth in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: clause (i) the Parent shall have no liability for such claims until the aggregate amount of the this Section 8.4(b), other than Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars in excess of one hundred thousand dollars ($5,000,000100,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from any single claim or aggregated claims arising out of any fraudulent misrepresentations related facts, events or fraudulent action by the Parent shall result in the Parent being liable circumstances; provided that, subject to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties this Section 8.4(b), after such amount is reached, all such Losses resulting from such fraudulent misrepresentations single claim or fraudulent actionsaggregated claims arising out of related facts, events or circumstances may be claimed under Section 8.2(a) by an Indemnified Party;
(iii) except as otherwise provided in Section 8.4(b)(iv), the maximum amount of indemnifiable Losses that may be recovered from Sellers for any amounts due under Section 8.2(a) for breach or inaccuracy of any 64 representation or warranty in this Agreement (other than for any Designated Representations) shall be an amount equal to twelve and one-half percent (12.5%) of the Purchase Price (the “Cap”); provided, however, that any indemnification Losses with respect to the Designated Representations shall not be taken into account in determining whether the Cap has been exceeded;
(iv) notwithstanding anything to the contrary in this Agreement, and without limiting the forgoing (including the Cap), the maximum amount of indemnifiable Losses that may be recovered from Sellers for any amounts due under Section 5.14(i) or Section 8.2, except for amounts due under Section 8.2(c), shall be an amount equal to one hundred percent (100%) of the Purchase Price; and
(v) no Party shall have any Liability pursuant to Sections 8.2 or 8.3 for any special, indirect, consequential or punitive damages relating to a breach or alleged breach of this Agreement, provided, however, that any amounts payable to third parties pursuant to a Third Party Claim shall not be deemed special, indirect, consequential or punitive damages.
(c) In the event of a breach by a Party of any representation or warranty given or All representations, warranties, covenants and agreements made by that the Indemnifying Party in this Agreement, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by any investigation made by or on behalf of the Indemnified Party (whether before, on or after the date of this Agreement that is qualified so or before, on or after the Closing Date), or knowledge obtained (or capable of being obtained) as to only a result of such investigation or otherwise; provided that, notwithstanding the foregoing, no Losses may be deemed breached if claimed under Section 8.2(a) by any Indemnified Party arising out of, or relating to, any inaccuracy or breach of the representation would have a Material Adverse Effect on a Party and warranty in Section 3.21(c), to the extent that Purchaser had Knowledge of such breach or is otherwise qualified inaccuracy as to “materiality” or “in any material respect,” then of the date hereof.
(d) The Materiality Scrape shall apply both for purposes of determining the amount of Loss for which a Party shall be entitled Losses subject to recover pursuant to any indemnification claim under this Article 10 (VIII and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach or not any breaches of the representation has any representations or warranties contained in this Agreement have occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be provisions of this Article IX are subject to the following limitations: :
(ia) the Representative The Shareholders shall have no liability not be obligated to pay any indemnification amounts for claims made under Damages pursuant to Section 10.01 9.2 until the aggregate amount of all Damages pursuant thereto exceeds an amount equal to $200,000, whereupon the Losses incurred by a Parent Indemnified Party or Parent Purchaser Indemnified Parties exceeds Five shall be entitled to indemnification under Section 9.2 for all such Damages in excess of such amount, subject to paragraph (b) below.
(b) The maximum amount that all Purchaser Indemnified Parties shall be entitled to recover under Section 9.2 shall in the aggregate not exceed an amount equal to Seven Million Dollars ($5,000,0007,000,000).
(c) (the “Threshold”), provided that if such Threshold is exceeded, the Representative No party shall be liable under this Article IX for all Losses starting any Damages resulting from or relating to any misrepresentation, inaccuracy in or Breach of any representation or warranty in this Agreement, any certificate delivered pursuant to this Agreement or any Breach of any covenant or agreement in this Agreement if the first dollar party seeking indemnification for such Damages had Knowledge of such LossesBreach prior to the Closing.
(d) As recourse for any claim by a Purchaser Indemnified Party pursuant to this Article IX, (ii) the Representative’s aggregate liability for all claims under Section 10.01 such Purchaser Indemnified Party shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) first seek payment out of the Company Disclosure Schedules Escrow Amount pursuant to and in the manner set forth in the Escrow Agreement prior to exercising its rights under this Agreement including, without limitation, its rights of offset as set forth in Section 9.8.
(e) Any amounts recoverable by any Indemnified Party pursuant to this Article IX with respect to any Damages shall constitute be limited to the actual damages or losses suffered by the Indemnified Party (i.e., reduced by any insurance proceeds or other payment or recoupment received, realized or retained by the Indemnified Party as a Loss result of the events giving rise to the claim for which a Parent indemnification net of any expenses related to the receipt of such proceeds, payment or recoupment, including retrospective premium adjustments, if any), and no Indemnified Party shall be entitled to recovery pursuant recover from any other party hereto any amount in respect to exemplary, punitive, special, indirect, consequential, remote or speculative damages, including lost profits except: (i) in the case of fraud; or (ii) if the Indemnified Party is liable for such damages as a result of a Third-Party Claim. Notwithstanding anything to the contrary elsewhere in this Agreement, no Indemnified Party or its Affiliates shall in any event be liable to any Indemnifying Party or its Affiliates for loss of future revenue or income, cost of capital, or loss of business reputation or opportunity except in the event that the Indemnified Party is liable for such items as a result of a Third-Party Claim. Upon the request of the Indemnifying Party, the Indemnified Party shall provide the Indemnifying Party with information sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section 10.019.6. No Company Stockholder An Indemnified Party shall take all reasonable steps to mitigate damages in respect of any claim for which it is seeking indemnification and shall use commercially reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof. Purchaser shall use commercially reasonable efforts to pursue any available insurance coverage or other rights of indemnity or reimbursement from third parties with respect to any Liability. Each of the parties hereto further agrees that it shall not seek, and shall not be entitled to, punitive damages, except: (i) in the case of fraud; or (ii) in the event that a party is liable for punitive damages as a result of a Third-Party Claim, as to any matter relating to this Agreement or the transactions contemplated hereby.
(f) All references to GAAP contained in this Agreement refer to GAAP as in effect as of the Closing Date and the Shareholders will have any no liability (for indemnification or otherwise) for any claims made under Section 10.01 Damages arising out of any changes in GAAP to the extent that such changes occur after the Closing Date. All references to Legal Requirements contained in this Agreement refer to the applicable Legal Requirements, and the interpretations thereof as in effect as of the Closing Date, and Shareholders will have no liability (for indemnification or otherwise) for any Damages arising out of any changes in Legal Requirements, or the interpretations thereof, to the extent that such changes occur after such date.
(g) Each of the Shareholders and Purchaser will, and will cause each of the Shareholder Indemnified Parties (to the extent not capable of being paid controlled by the Representativesuch Shareholder) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or Purchaser Indemnified Parties, as applicable, to, use its commercially reasonable best efforts to mitigate any of the parties referred Damages with respect to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under it may be entitled to seek indemnification pursuant to this Article 10Agreement.
(bh) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding the foregoing, the limitations in Sections 9.6(a) and 9.6(b) will not apply to: (w) the failure or refusal of the Shareholders to deliver good title to the following limitations: Stock; (x) claims or losses arising from actual fraud committed by the Shareholders or the Company upon Purchaser; (y) any Breach of the Core Representations or any Breach of the representations set forth in Sections 3.4 (Consents and Approvals), 3.5 (No Violation), 3.13 (Taxes), 3.28 (Title to Assets), and 4.4 (Consents and Approvals; No Violations); and (z) any Indebtedness of the Company which is not included in the calculation of Working Capital or otherwise paid at or prior to the Closing. Notwithstanding the foregoing, the limitations in Section 9.6(a) will not apply to any Breach of the representations set forth in Section 3.26 (Accounts Receivable).
(i) Notwithstanding anything to the Parent shall have no liability for such claims until contrary set forth in Article IX, the aggregate maximum amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder that all Purchaser Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant in connection with a Breach by the Company of any of its representations or warranties in this Agreement related to this Article 10 (and the application of Subsidiaries shall be only the Threshold and Damages related to such Breach which is attributable to the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount Company resulting from its percentage ownership of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsSubsidiary.
(j) This Section 9.6 is in no way intended to affect the obligation of Purchaser to deliver the Purchase Price in accordance with the terms of this Agreement.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability Any claims for all claims indemnification made under Section 10.01 shall by an Indemnified Party pursuant to this Article IX will be subject paid only to the following limitations: extent that individual claims or series of related claims exceed (i) the Representative shall have no liability for claims made under Section 10.01 until euro)30,000 and the aggregate amount of the Losses incurred all such claims by a Parent such Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) euro)5 million (the “Threshold”"Deductible"), provided that if such Threshold is exceeded, at which point the Representative Indemnifying Party shall be liable for all Losses starting from the first dollar portion in excess of such Losses, (ii) the Representative’s Deductible. The aggregate liability for all claims of any Indemnifying Party (without duplication between Parent and Seller) under Section 10.01 this Agreement shall not exceed Fifty Million Dollars an amount equal to 15% of the Purchase Price ($50,000,000the "Cap"), except for claims relating to breaches of the representations contained in Section 3.03, which shall have no such limitation. The limitations contained in this Section 9.05(a) will not apply to the indemnification undertaking set forth in Sections 9.01(a)(ii), (iii) and (v) and 9.02(a)(ii) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 Payments by an Indemnifying Party pursuant to this Article IX shall be subject limited to the following limitations: amount of any Losses that remain after deducting:
(i) the Parent shall have no liability for such claims until the aggregate amount of any Tax benefit actually realized by the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar as a result of such Losses in the year such Losses are incurred, as conclusively determined and certified by such Indemnified Party's independent auditor, such determination to be conclusive in the absence of manifest error;
(ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out amount of any fraudulent misrepresentations or fraudulent action insurance proceeds actually recovered by the Parent shall Indemnified Party, using commercially reasonable efforts but without the necessity of litigation, from its insurer or insurers under any policy of insurance as a result of such Losses;
(iii) the amount of any indemnity, contribution or other similar payment actually recovered by the Indemnified Party, using commercially reasonable efforts but without the necessity of litigation, from any third party as a result of such Losses;
(iv) the amount of any reserve set forth in the Parent being liable December 31, 2002 Financial Statements specifically relating to such Losses, as such reserves are set forth in Section 9.05 of the Seller Disclosure Schedule; and
(v) the amount of any indemnity payment or reimbursement received by any of the counterparties to the Stockholder Indemnified Party or Stockholder Indemnified Parties litigations set forth in Sections 9.01 (a)(iv), (v) and (vi) to the full extent of it relates to acts, facts, events or circumstances related to the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsperiod prior to Closing Date.
(c) In Notwithstanding anything to the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached contrary contained herein, if the representation would have Indemnifying Party indemnifies the Indemnified Party for a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a the Indemnifying Party shall believes the Indemnified Party may be entitled to recover pursuant insurance proceeds or indemnity, contribution or similar payment from any third party but which the Indemnified Party was not able to this Article 10 (so recover using commercially reasonable efforts, the Indemnifying Party shall be entitled, but shall not be obligated, to conduct and control in good faith, through counsel of its own choosing, any action on behalf of the Indemnified Party to recover such insurance proceeds or any indemnity, contribution or similar payment from any third party and the application of Indemnified Party shall, at the Threshold Indemnifying Party's sole cost and expense, cooperate with the Parent ThresholdIndemnifying Party in regard to all matters relating to such claim.
(d) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss No Indemnifying Party hereto shall be determined without limitation by such Material Adverse Effect responsible or materiality qualificationsliable to any Indemnified Party for punitive, indirect or consequential damages (except if the Loss is a result of punitive, indirect or consequential damages awarded in a Third Party Claim).
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made Notwithstanding anything herein to the contrary, the obligation of Seller and Purchaser to indemnify the other under this Section 10.01 8.2 shall be subject to the following limitations: :
(i) Seller and Purchaser shall not be obligated to indemnify the Representative shall have no liability for claims made under Section 10.01 other until the aggregate amount of all indemnifiable Losses pursuant to Section 8.2(a) or Section 8.2(b), as the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties case may be, exceeds Five Million Dollars ($5,000,000) 20,000 (the “Indemnification Threshold”), provided that if in which event such indemnities shall apply only to claims in excess of the Indemnification Threshold. The Indemnification Threshold is exceededshall not apply to any action based on fraud, the Representative shall be liable for all Losses starting from the first dollar of such Losses, intentional misrepresentation or omission or intentional misconduct.
(ii) the Representative’s aggregate liability for all claims The indemnification obligations of Seller to Purchaser under Section 10.01 8.2(a) or Purchaser to Seller under Section 8.2(b) shall not in the aggregate exceed Fifty Million Dollars $112,500 ($50,000,000) and the “Indemnification Cap”); provided, however, that the foregoing Indemnification Cap shall not apply to breaches of Fundamental Representations, for which the cap shall be an amount equal to the Purchase Price.
(iii) In no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules event shall constitute a Loss for which a Parent any Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover or make a claim for any amounts in respect of any punitive damages (except to the extent awarded in a Third-Party Claim).
(iv) Each Indemnified Party hereby waives any subrogation rights that its insurer may have with respect to any indemnifiable Losses. After any indemnification payment is made to any Indemnified Party pursuant to this Article 10 Section 8.2, the Indemnifying Party shall, to the extent of such payment, be subrogated to all rights (and the application if any) of the Threshold and Indemnified Party against any third party in connection with the Parent Threshold) and not for purposes of determining whether a breach Losses to which such payment relates. Without limiting the generality of the representation has occurredpreceding sentence, any Indemnified Party receiving an indemnification payment pursuant to the amount preceding sentence shall execute, upon the written request of the Indemnifying Party, any instrument reasonably necessary to evidence such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationssubrogation rights.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary (ii)(A) an Indemnifying Party shall not be liable for any claim for indemnification, and no claim for indemnification may be made, pursuant to Section 8.2(a)(i) or Section 8.3(a) with respect to any individual claim unless such claim exceeds $[***] (the Representative “R&W Claim Threshold”), and (B) an Indemnifying Party shall have no liability not be liable for claims made under any claim for indemnification pursuant to Section 10.01 8.2(a)(i) or Section 8.3(a) unless and until the aggregate amount of indemnifiable Losses relating to claims that meet the Losses incurred by a Parent Indemnified R&W Claim Threshold equals or exceeds $[***], after which the Indemnifying Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all such Losses starting from the first dollar of such Losses(solely with respect to claims that equal or exceed the R&W Claim Threshold), and (iiii)(A) the Representative’s aggregate liability for all claims under Section 10.01 an Indemnifying Party shall not exceed Fifty Million Dollars be liable for any claim for indemnification, and no claim for indemnification may be made, pursuant to Section 8.2(a)(ii) or Section 8.3(b) with respect to any individual claim unless such claim exceeds $[***] ($50,000,000) the “Covenant Claim Threshold”), and (iiiB) no item an Indemnifying Party shall not be liable for any claim for indemnification pursuant to Section 8.2(a)(ii) or Section 8.3(b) unless and until the aggregate amount of indemnifiable Losses relating to Taxes claims that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of meet the Company Disclosure Schedules shall constitute a Loss for Covenant Claim Threshold equals or exceeds $[***], after which a Parent Indemnified the Indemnifying Party shall be entitled liable for all such Losses from the first dollar (solely with respect to recovery pursuant claims that equal or exceed the Covenant Claim Threshold); provided that this Section 8.6(a) shall not apply to Section 10.01. No Company Stockholder shall have any liability for any claims made Loss claimed under Section 10.01 (to the extent not capable of being paid by the Representative8.2(a)(iii) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Section 8.3(c).
(b) The Parent In no event shall the aggregate liability of (i) Sellers in respect of claims for indemnification under Section 8.2(a)(i), or (ii) Buyer in respect of claims for indemnification under Section 8.3(a), exceed the Escrow Amount until the first (1st) anniversary of the Trigger Date, and [***] of the Escrow Amount thereafter until the [***] anniversary of the Trigger Date (the “R&W Cap”). In no event shall the aggregate liability of (i) Sellers in respect of claims for indemnification under Section 8.2(a)(ii), or (ii) Buyer in respect of claims for indemnification under Section 8.3(b), exceed [***] of the Combined Purchase Price (the “Covenant Cap”). In no event shall the aggregate liability of Sellers or Buyer in respect of any and all claims made for indemnification under Section 10.02 this Article VIII exceed [***] of the Combined Purchase Price (the “Cap”), inclusive of the R&W Cap and the Covenant Cap. Notwithstanding anything to the contrary contained herein, Buyer’s obligation to pay the Closing Cash Payment due at each Applicable Closing shall not be subject to any set-off, counterclaim or recoupment claimed by Buyer to be owed by the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”)Sellers to Buyer, provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out including in respect of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable indemnification claims made pursuant to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsthis Article VIII.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a An Indemnified Party shall not be entitled to recover pursuant double recovery for any Losses. In calculating amounts payable to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredan Indemnified Party hereunder, the amount of such any indemnified Loss shall be determined without duplication of any other Loss for which an indemnification claim has been made under any other covenant or agreement.
(d) Notwithstanding anything to the contrary, each Party shall, and shall cause its respective Affiliates and Representatives including the applicable Indemnified Party to take all commercially reasonable steps to mitigate their respective Losses upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any Losses that are indemnifiable hereunder.
(e) The amount of any Losses for which indemnification is provided under this Article VIII shall be net of any amounts actually recovered by the Indemnified Party under insurance policies or otherwise with respect to such Losses (net of any Tax or expenses incurred in connection with such recovery). Each Party shall use its commercially reasonable efforts to recover under insurance policies for any Losses prior to seeking indemnification under this Agreement.
(f) Notwithstanding anything to the contrary elsewhere in this Agreement or any Related Agreement, no Party shall, in any event, be liable to any other Person for any consequential, incidental, indirect, special or punitive damages of such Person, including loss of revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement or any Related Agreement (provided, that such limitation with respect to lost profits shall not limit any Party’s right to recover (i) contract damages in connection with another Party’s failure to close in violation of this Agreement or any Related Agreement) or (ii) damages paid by such Material Adverse Effect a Party in connection with or materiality qualificationspursuant to a Third Party Claim.
Appears in 1 contract
Sources: Asset Purchase Agreement (Southeastern Grocers, Inc.)
Limitations on Indemnification. (a) The Representative’s liability a. No claim for all claims made indemnification under Section 10.01 shall 8.2 or Section 8.3 may be subject asserted nor may any Action be commenced against an Indemnifying Party in respect of such claim unless written notice of such claim or Action is received by such Indemnifying Party describing in reasonable detail the facts and circumstances with respect to the following limitations: subject matter of such claim or Action (itaking into account the information then available to the Indemnified Party) on or prior to the Representative 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 8.1.
b. Notwithstanding anything to the contrary contained in this Agreement, the Seller shall have no liability not be liable for claims made under any Losses pursuant to Section 10.01 8.2(a) and the Purchaser shall not be liable for any Losses pursuant to Section 8.3(a), in each case, unless and until the aggregate amount of the indemnifiable Losses incurred by a Parent Indemnified which may be recovered from such Indemnifying Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) 8,625,000 (the “ThresholdBasket”), provided that if such Threshold is exceeded, whereupon the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery indemnification for the amount of such Losses in excess of such amount; the Seller shall not be liable for any Losses pursuant to Section 10.01. No Company Stockholder 8.2(a) and the Purchaser shall not be liable for any Losses pursuant to Section 8.3(a), in each case, relating to an individual claim resulting in Losses in the amount of $15,000 or less (a “De Minimis Claim”), regardless of whether or not aggregate Losses have exceeded the Basket; nor shall the amount of any such De Minimis Claims be taken into account in determining whether the Basket has been reached; the maximum amount of indemnifiable Losses which may be recovered from any Indemnifying Party arising out of, or resulting from, the causes set forth in Section 8.2(a) or Section 8.3(a) shall be an amount equal to $57,500,000; provided that the foregoing limitations set forth in clauses (i), (ii) and (iii) shall not apply to claims in respect of the Seller Fundamental Representations, the Purchaser Fundamental Representations or fraud and provided, further, that the maximum amount of indemnifiable Losses which may be recovered from the Seller under this Agreement shall be the Aggregate Transaction Value; and the parties hereto acknowledge and agree that no Indemnifying Party shall have any liability Liability under this Article VIII for any claims made Loss, if a court of competent jurisdiction determines that such Loss is caused solely by (A) any action or inaction of the Indemnified Party or any of its Representatives; (B) any action or inaction of the Indemnifying Party or any of its Representatives at the written request, at the written direction, or with the written consent, of the Indemnified Party or any of its Representatives; or (C) any action, that the Indemnifying Party or any of its Representatives was expressly required to take or not to take pursuant to the terms of this Agreement, any Transaction Document or, that the Indemnifying Party or any of its Representatives was required to take under Section 10.01 (applicable Law.
c. Notwithstanding anything to the contrary contained in this Agreement, after the Closing, except to the extent not capable (i) arising out of being Third-Party Claims or (ii) reasonably foreseeable as a result of a breach or alleged breach of this Agreement or any certificate delivered pursuant to this Agreement or any other mater giving rise to a claim for indemnification under this Article VIII, none of the parties hereto and none of their respective Affiliates shall have any Liability under any provision of this Agreement or any other Transaction Document for any punitive, incidental, consequential, special or indirect damages, loss of future profits, revenue or income, diminution in value or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement or any other Transaction Document.
d. For all purposes of this Article VIII, “Losses” shall be calculated net of any recovery or benefit (including insurance and indemnification, but net of all costs and expenses incurred in obtaining such recovery or benefit, including premium increases) actually paid by to the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company Indemnified Party or any of its Affiliates in connection with the parties referred facts giving rise to the right of indemnification and, if the Indemnified Party or any of its Affiliates receive such recovery or benefit after receipt of payment from the Indemnifying Party, then the lesser of (x) the amount of such recovery or benefit, net of all costs and expenses incurred in obtaining such recovery or benefit, including premium increases, and (y) the definition amount previously recovered from the Indemnifying Party shall be paid to the Indemnifying Party. Any Losses shall be determined without duplication of Knowledge recovery by reason of the Companystate of facts giving rise to such Losses (A) constituting a breach of more than one representation, warranty, covenant or agreement or otherwise being indemnifiable under multiple provisions of this Article VIII or (B) being taken into account in which case determining any adjustment to the Company Stockholder directly participating in the fraud Purchase Price under Section 2.10 or Section 2.11.
e. Each party hereto shall, and shall cause its respective Affiliates to, use commercially reasonable efforts to mitigate its Losses upon and after becoming aware of any event that would reasonably be expected to give rise to any Losses, and indemnification shall not have be available with respect to any limitation on Loss to the extent such Loss is determined by a court of competent jurisdiction to be attributable to a failure by a party to use commercially reasonable efforts to take (or cause its liability Representatives to take) reasonable steps to mitigate such Loss; provided, that an Indemnified Party shall not be required to seek recovery from an insurance carrier or other Person with respect to any matter that is the subject of a claim for indemnification under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 VIII. No party hereto shall be subject entitled to any payment, adjustment or indemnification more than once with respect to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable same Loss. Notwithstanding anything to the Stockholder Indemnified Party or Stockholder Indemnified Parties contrary contained in this Agreement, to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of that a breach by a Party of any representation or warranty given or made by that Party Loss was taken into account in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Aggregate Transaction Value, no Indemnified Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not any indemnification or any other payment for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsLoss.
Appears in 1 contract
Sources: Sale, Purchase and Contribution Agreement (W R Grace & Co)
Limitations on Indemnification. (a) The Representative’s Notwithstanding any provisions of this Agreement to the contrary, other than with respect to the Fundamental Representations and the Specified IP Representations, the Indemnifying Parties shall not have any liability for all claims made or obligation under Section 10.01 shall be subject to 8.1(a)(i) unless the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid Losses suffered by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the CompanyIndemnified Parties thereunder exceeds $300,000, in which case the Company Stockholder directly participating in Indemnified Parties shall be entitled to recover all Losses (subject to the fraud shall not have any limitation on its liability under this Article 10other limitations herein).
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding any provisions in this Agreement to the following limitations: contrary, other than as provided for in clause (ii) of the proviso in Section 8.2(d), (i) the Parent Indemnifying Parties’ aggregate liability and obligations under Section 8.1(a)(i), other than with respect to any inaccuracy or breach of a Fundamental Representation or the Specified IP Representations (such matters described in this clause (i) are referred to collectively as the “General Indemnification Matters”), shall be limited to recovery by the Indemnified Parties against the amount then available in the General Escrow Fund plus, to the extent claims for Fundamental Indemnification Matters that have no liability been satisfied in accordance with this Agreement by reducing the General Escrow Fund on or prior to the Final Escrow Release Date (such reduction in the aggregate, the “Fundamental Matter Escrow Amount”), an additional amount equal to the Fundamental Matter Escrow Amount (it being understood, for such the avoidance of doubt, that (x) all indemnification claims until for General Indemnification Matters that are satisfied outside the General Escrow Fund (whether directly by the Equityholders or pursuant to the setoff rights in Section 8.6) shall be counted towards and reduce the Fundamental Matter Escrow Amount, and (y) claims for General Indemnification Matters shall still be subject, when viewed in the aggregate, to a cap equal to the aggregate amount of General Escrow Property placed in the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (General Escrow Fund prior to the “Parent Threshold”)expiration of the Final Escrow Period and prior to any reduction thereof, provided that if such Parent Threshold is exceeded, valuing the Parent shall be liable for all Losses starting from Shares at the first dollar of such Losses Parent Stock Price) and (ii) the Parenteach Indemnifying Party’s aggregate liability for all such claims and obligations under this Article VIII shall not exceed $35,000,000; except that Losses resulting the portion of the Merger Consideration actually received by such Indemnifying Party (in addition to the forfeiture of the portion of the Merger Consideration paid to the Indemnified Parties from the General Escrow Fund, the Designated Escrow Fund or arising out through the exercise of any fraudulent misrepresentations or fraudulent action by the setoff rights set forth in Section 8.6) (with the Parent shall result in Shares being valued at the Parent being liable Stock Price). All indemnification obligations under Section 8.1(a) that are not General Indemnification Matters or Specified IP Matters are referred to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so herein as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (Fundamental Indemnification Matters”. The Specified IP Matters and the application of Fundamental Indemnification Matters are collectively referred to herein as the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications“Designated Indemnification Matters.”
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 Sapphire and Emerald shall not be subject required to the following limitations: indemnify any Buyer Indemnitee pursuant to (i) Section 9.02(a) and Section 9.02(g) with respect to Losses incurred by Buyer Indemnitees unless such claim or series of related claims involve Losses in excess of $200,000 (the Representative shall have no liability for claims made under “De Minimis Amount”) or (ii) Section 10.01 9.02(a) with respect to Losses incurred by Buyer Indemnitees until the aggregate amount of such Losses exceeds $ 13,387,500 (the “Deductible”), after which Sapphire and Emerald shall be obligated for all of the Buyer Indemnitees’ Losses incurred under this clause (ii) to the extent in excess of the Deductible, subject to the Cap. Subject to Section 9.04(c) above, in no event shall the aggregate amount required to be paid by Sapphire and Emerald pursuant to Section 9.02(a) exceed $13,387,500 (the “Cap”); provided further that none of the De Minimis Amount, the Deductible or the Cap shall apply to any claim involving Losses arising out of or relating to a Parent Indemnified Party breach or Parent Indemnified Parties exceeds Five Million inaccuracy of any of the Fundamental Representations or the representations and warranties in Section 3.13 (Tax Matters). In no event shall the aggregate amount required to be paid by Sapphire and Emerald pursuant to Section 9.02(g) exceed six hundred fifty seven million Dollars ($5,000,000657,000,000) (the “ThresholdE&O Cap Amount”) less the amount actually recovered by the Buyer Indemnitees with respect to Pre-Closing E&O Liabilities pursuant to the R&W Insurance Policy. Notwithstanding anything herein to the contrary (including the Cap described above), Sapphire and Emerald shall, jointly and severally, indemnify the Buyer Indemnitees with respect to one half of all Losses subject to indemnification hereunder for breaches or inaccuracies of Indemnity Basket Representations that are incurred by the Buyer Indemnitees in excess of both (1) the Cap and (2) all available coverage under the R&W Insurance Policy; provided that if such Threshold is exceeded, the Representative total obligations of Sapphire and Emerald pursuant to this sentence shall not exceed one hundred million Dollars ($100,000,000) in the aggregate.
(b) Sapphire and Emerald shall not be liable for all required to indemnify any Buyer Indemnitee pursuant to Section 9.02(f) with respect to Losses starting from incurred by Buyer Indemnitees until the first dollar aggregate amount of such Losses, when taken together with all other Losses subject to indemnification pursuant to Section 9.02(a), Section 9.02(c) and Section 9.02(g) exceeds $26,775,000 (the “Retention”), after which Sapphire and Emerald shall be obligated for all of the Buyer Indemnitees’ Losses under Section 9.02(f) to the extent in excess of the Retention, subject to the Policy Limit. In no event shall the aggregate amount required to be paid by Sapphire and Emerald pursuant to Section 9.02(f) plus the aggregate amount required to be paid by Sapphire and Emerald as a result of the Cap being increased pursuant to the last sentence of Section 9.04(c) exceed an amount equal to (x) three hundred fifty seven million dollars ($357,000,000) less (y) the total amount actually recovered by the Buyer Indemnitees pursuant to the R&W Insurance Policy (the “Policy Limit”). With respect to the matters subject to indemnification pursuant to Section 9.02(f), Emerald and Sapphire shall, mutatis mutandis, have the same rights as the R&W Insurers have with respect to breaches and inaccuracies of the representations and warranties covered by the R&W Insurance Policy, including, without limitation, rights to subrogation and rights to receive information relating to any claim. To the extent the sum of (i) all amounts actually recovered by Buyer Indemnitees pursuant to the R&W Insurance Policy with respect to Losses subject to indemnification pursuant to Section 9.02(a) (other than with respect to Fundamental Representations and the representations and warranties in Section 3.13 (Tax Matters) plus (ii) the Representative’s aggregate liability all amounts paid to Buyer Indemnitees for all indemnification claims under Section 10.01 9.02(f), taken together, exceeds three hundred fifty seven million dollars ($357,000,000), Buyer shall promptly (and in any event within ten (10) Business Days) reimburse Emerald and Sapphire the amount of such excess. The Parties acknowledge and agree that nothing in this Section 9.05(b) shall limit or waive any obligations under Section 9.04(c) to use reasonable best efforts to seek recovery under the R&W Insurance Policy for matters covered thereby (and that, for the avoidance of doubt, Buyer shall still be required to seek recovery under the R&W Policy without regard to its obligations to deliver any or all proceeds to Emerald).
(c) Notwithstanding anything to the contrary contained in this Agreement, (i) Sellers shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (otherwise indemnifiable Loss to the extent not capable the Buyer Indemnitees have been actually recovered or been compensated in respect of being paid by such Loss through the Representative) unless that Company Stockholder directly participated in adjustment to the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made Purchase Price under Section 10.02 shall be subject 2.10 or Section 2.11 (it being acknowledged that the intent of this provision is to avoid “double counting”) or for Losses to the following limitations: extent attributable to any breach by Buyer of any covenant or agreement pursuant to Section 2.12 or Article VI and (iii) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all any Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent excess of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsPurchase Price.
(cd) In the event of a breach by a Party of any representation Nothing in this Section 9.05 or warranty given or made by that Party elsewhere in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in shall limit any material respect,” then for purposes claims of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsFraud.
Appears in 1 contract
Sources: Security and Asset Purchase Agreement (Willis Towers Watson PLC)
Limitations on Indemnification. (a) The Representative’s liability indemnification provided for all claims made under in Section 10.01 8.1 shall be subject to the following limitations: :
(i) the Representative Seller shall have no liability not be obligated to pay any amounts for claims made indemnification under Section 10.01 until 8.1(a) except to the extent that the aggregate amount of the Losses theretofore claimed as indemnifiable Losses pursuant to Section 8.1(a) and actually incurred by a Parent Indemnified Party or Parent Indemnified Parties Purchaser (net of insurance recoveries thereunder) exceeds Five Million Dollars ($5,000,000) 2,500,000 (the “ThresholdSeller Basket Amount”), provided subject to the limits set forth in clauses (ii), (iii) and (iv) below (it is understood and agreed that if such Threshold is exceeded, any amounts credited to the Representative Seller Basket Amount under the Terrace Bay Asset Purchase Agreement shall be liable for all Losses starting from also count as amounts credited to the first dollar of such Losses, Seller Basket Amount under this Agreement and vice versa);
(ii) the Representative’s Seller shall not be obligated to pay an aggregate liability amount for all claims indemnification under Section 10.01 8.1(a) in excess of $5,000,000 (the “Seller Cap Amount”) (it is understood and agreed that any amounts paid toward the Seller Cap Amount under the Terrace Bay Asset Purchase Agreement shall not exceed Fifty Million Dollars ($50,000,000) count as amounts paid to the Seller Cap Amount under this Agreement and vice versa); and
(iii) no item Seller shall not be obligated to pay any amount for indemnification under Section 8.1(a) if:
1. the Loss associated with the individual claim does not exceed $100,000.00; or
2. the aggregate of the Loss associated with claims by more than one Employee relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) the same or similar type of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent right, entitlement or payment does not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10exceed $100,000.00.
(b) The Parent liability indemnification provided for all claims made under in Section 10.02 8.2 shall be subject to the following limitations: :
(i) Purchaser and Purchaser Indemnitors shall not be obligated to pay any amounts for indemnification under Section 8.2(a) except to the Parent shall have no liability for such claims until extent that the aggregate amount of the Losses theretofore claimed as indemnifiable Losses pursuant to Section 8.2(a) and actually incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties Seller (net of insurance recoveries thereunder) exceeds Five Million Dollars ($5,000,000) 2,500,000 (the “Parent Threshold“ Purchaser Basket Amount”), provided that if such Parent Threshold is exceeded, subject to the Parent shall be liable for all Losses starting from the first dollar of such Losses and limits set forth in clauses (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except and (iv) below (it is understood and agreed that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable amounts credited to the Stockholder Indemnified Party or Stockholder Indemnified Parties Purchaser Basket Amount under the Terrace Bay Asset Purchase Agreement shall count as amounts credited to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in Purchaser Basket Amount under this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.vice versa);
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability Subject to Section 8.6(b), an Indemnified Party may not recover Losses from Buyer or Sellers, as applicable, in respect of any claim for all claims made indemnification under Section 10.01 shall 8.2 or Section 8.3, as applicable, unless and until Losses have been incurred, paid or properly accrued by the applicable Indemnified Parties in an aggregate amount greater than $125,000 (the “Indemnification Threshold”), and once such Indemnification Threshold has been exceeded, the Indemnified Party will be entitled to recover for such Losses in excess of the Indemnification Threshold, provided, that, for the avoidance of doubt, the Indemnification Threshold will not apply to a claim by a Buyer Indemnified Party for recovery from the R&W Insurance Policy.
(b) Subject to the other terms of this Section 8.6, recovery by an Indemnified Party of its Losses in the aggregate will be subject to the following limitations: :
(i1) With respect to Losses claimed under Sections 8.2(a) through 8.2(f), a Buyer Indemnified Party will recover all of its Losses as follows:
(A) first, from the Representative shall have no liability for claims made under Section 10.01 until R&W Insurance Policy;
(B) second, to the aggregate extent such Losses exceed the amount recovered from (including by operation of the retention or the limits thereunder), or are not covered, or are denied coverage under, the R&W Insurance Policy, directly from the Sellers on a several but not joint basis (in accordance with each Seller’s Pro Rata Share);
(2) With respect to Losses incurred by a Parent Indemnified Party or Parent claimed under Sections 8.2(a) through 8.2(f), the Buyer Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall will not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have recover against any liability Seller (A) in excess of the proceeds received by such Seller or (B) for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations inaccuracy in, or the taking of fraudulent actions by the Company or breach of, any of the parties referred Fundamental Representations of any other Seller, or any breach of, or the failure of any other Seller to perform or comply with any of its covenants or obligations contained in the definition this Agreement, any Related Agreement or any certificate or instrument delivered pursuant to this Agreement;
(3) With respect to Losses claimed under Sections 8.3, a Seller Indemnified Party will recover all of Knowledge its Losses directly from Buyer; and
(4) With respect to Losses claimed under Sections 8.3, no Seller Indemnified Party will be entitled to recover against Buyer in excess of such Seller’s Pro Rata Share of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsInitial Purchase Price.
(c) In Any entitlement of the event of Indemnified Parties to make a breach by a claim against the Indemnifying Party of any representation or warranty given or made by that Party in under this Agreement that is qualified so as to only will be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes determined without duplication of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application recovery by reason of the Threshold and the Parent Threshold) and not for purposes same state of determining whether facts giving rise to such claim constituting a breach of more than one representation, warranty, covenant or agreement and/or an adjustment to the representation has occurredpurchase price in accordance with Section 1.4.
(d) Notwithstanding any other provision of this Agreement, no party hereto or any of its Affiliates shall have liability for any indirect, exemplary or punitive damages, and Losses indemnifiable hereunder shall not include such damages, except to the amount extent, if any, such Losses are incurred due to Fraud of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsa party hereto.
Appears in 1 contract
Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement:
(a) The Representative’s liability for all claims made Any claim under Section 10.01 8.2 or Section 8.3 or Article IX required to be made on or prior to the expiration of the applicable survival period set forth in Section 8.1 and not made on or prior to such expiration in accordance with Section 8.1 shall be subject irrevocably and unconditionally released and waived by the party seeking indemnification with respect thereto. It is the express intent of the Parties that, if the applicable period for an item as contemplated by Section 8.1 and this Section 8.5 is shorter than the statute of limitations that would otherwise have been applicable to such item, then, by contract, the applicable statute of limitations with respect to such item shall be reduced to the following limitations: shortened survival period contemplated hereby. The Parties further acknowledge that the time periods set forth in Section 8.1 for the assertion of claims under this Agreement are the result of arm’s-length negotiation among the Parties and that they intend for the time periods to be enforced as agreed by the Parties.
(i) The Seller Indemnitees shall not be entitled to recover from any Seller for any claim pursuant to Section 8.2(a), Section 8.2(b) or Article IX unless such claim individually or a series of related claims involves Losses in excess of $25,000 (the Representative “De Minimis Threshold”), it being understood that if such Losses do not exceed the De Minimis Threshold, such Losses shall have no liability not be applied to or considered for claims made purposes of calculating the aggregate amount of Seller Indemnitee’s indemnifiable Losses under Section 10.01 8.2(a), Section 8.2(b) or Article IX; (ii) the Seller Indemnitees shall not be entitled to recover from any Seller for any claims pursuant to Section 8.2(a)(ii) or Section 8.2(b)(ii) until the aggregate amount of the Seller Indemnitees indemnifiable Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties under Section 8.2(a)(ii) and Section 8.2(b)(ii) exceeds Five Million Dollars ($5,000,000) 4,500,000 (the “ThresholdDeductible”), provided it being understood that if such Threshold is exceededLosses exceed the Deductible, the Representative Seller Indemnitees shall only be liable entitled to indemnification for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,0008.2(a)(ii) and or Section 8.2(b)(ii) in excess of the amount of the Deductible; (iii) the maximum amount of indemnifiable Losses for which a Seller may be liable pursuant to Section 8.2(a)(ii) and Section 8.2(b)(ii) shall be an amount equal to such Seller’s proportion (determined in accordance with the Seller Proportions) of $34,000,000; and (iv) the maximum amount of indemnifiable Losses for which a Seller may be liable pursuant to Section 8.2 and Article IX shall be an amount equal to such Seller’s proportion (determined in accordance with the Seller Proportions) of the Total Seller Payment.
(c) Sellers shall not be required to indemnify or hold harmless any Seller Indemnitees against any Losses or Taxes to the extent the related liabilities were reflected in, reserved for or taken into account in the determination of Working Capital as of immediately prior to the Closing and reduced the Aggregate Common Equity Price accordingly, or Closing Date Indebtedness.
(d) The amount of any Losses or Taxes for which indemnification is provided under this Article VIII or Article IX shall be net of any amounts recovered by the Indemnified Party under insurance policies, indemnity or contribution agreements, Contracts or otherwise with respect to such Losses (in each case, with a third party), as applicable (it being agreed that if any such amounts are recovered by the Indemnified Party in respect of any such Losses subsequent to the Indemnifying Party’s making of an indemnification payment in satisfaction of its applicable indemnification obligation, such amounts shall be promptly remitted to the Indemnifying Party to the extent of the indemnification payment made), and the Indemnified Parties shall use, and cause their Affiliates to use, commercially reasonable efforts to seek recovery under all provisions covering such Losses to the same extent as it would if such Losses were not subject to indemnification hereunder. Any amount of Losses or Taxes for which reimbursement or indemnification is provided under this Agreement shall be determined net of any Tax Benefit actually realized by the Indemnified Party arising from the incurrence or payment of any such Loss or Tax. Claims for Taxes shall be made solely pursuant to Article IX, and no item relating claims therefor shall be made under this Article VIII, in each case subject to Taxes that is referenced the provisions of this Section 8.5. In the event of any conflict between this Article VIII and Article IX, the provisions of Article IX shall govern, in Schedule 4.10 each case subject to the provisions of this Section 8.5.
(e) Except to the extent of Losses payable by an Indemnified Party to a third party in respect thereof, no Indemnifying Party shall, in any event, be liable hereunder to any Indemnified Party for any consequential, incidental, indirect, special or punitive damages, loss of revenue, income or profits, diminution of value or loss of business reputation or opportunity.
(f) For purposes of determining the amount of Losses subject to indemnification pursuant to this Article VIII for a breach of representation or warranty (but not, for the avoidance of doubt, for determining whether a breach exists), any limitations or qualifications as to materiality (including the word “material”), Material Adverse Effect or other similar limitation or qualification contained in or otherwise applicable to such representation or warranty shall be disregarded (other than Schedule 4.10(bin Section 4.4(a), Section 4.5(b) or in the definitions of the Company Disclosure Schedules shall constitute a Loss for which a Parent Material Adverse Effect, Material Contract and Material IP).
(g) No Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (indemnification hereunder to the extent not capable of being paid by that such indemnification would constitute a duplicative payment for the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10same Loss.
(bh) The Parent liability for all claims made under Except as set forth in Section 10.02 shall be subject to 8.5(h) of the following limitations: Company Disclosure Schedule, (i) the Parent shall have no liability for such claims until the aggregate amount each of the Losses incurred by a Stockholder Indemnified Party or Stockholder Parties and the Indemnified Parties exceeds Five Million Dollars shall use its commercially reasonable efforts to mitigate its respective Losses upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any Losses that are indemnifiable hereunder, and ($5,000,000ii) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent no Indemnifying Party shall be liable for all any Losses starting to the extent they arise out of or result from the first dollar of Indemnified Party’s failure to use commercially reasonable efforts to mitigate such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsLosses.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims representations and warranties made under Section 10.01 in this Agreement shall be subject to terminate upon the following limitations: twelve (i12) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount month anniversary of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars Closing Date, except for the Fundamental Representations, which shall survive as follows: the representations and warranties in Section 3.10 ($5,000,000) (the “Threshold”Tax Matters), provided that if such Threshold is exceededand Section 3.11 (Environmental Matters) shall survive until sixty (60) days following the expiration of the statute of limitations applicable thereto (giving effect to any waiver, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000mitigation or extension thereof) and (iii) no item relating to Taxes that is referenced all other Fundamental Representations shall survive in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10perpetuity.
(b) The Parent Subject to Section 6.3(d), PHMD’s maximum aggregate liability to Purchaser Indemnified Persons for all claims made indemnification (including costs incurred in the defense of such claim) under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000Section 6.1(a)(i) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent other than with respect to Fundamental Representations) shall be liable for all Losses starting from the first dollar of such Losses not exceed $500,000; and (ii) Section 6.1 and Section 7.2, in the Parent’s aggregate liability for all such claims aggregate, shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result Purchase Price. Subject to Section 6.3(d), Purchaser’s maximum aggregate liability to Seller Indemnified Persons for indemnification (including costs incurred in the Parent being liable to defense of such claim) under Section 6.1 shall not exceed the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsPurchase Price.
(c) In No Purchaser Indemnified Person shall be entitled to indemnification pursuant to Section 6.1(a)(i) (other than with respect to Fundamental Representations which shall not be subject to the event limitations of this Section 6.3(c)) unless and until the aggregate Losses incurred by all Purchaser Indemnified Persons in respect of all claims under Section 6.1(a)(i) (other than with respect to Fundamental Representations) collectively exceeds $250,000 whereupon Purchaser Indemnified Persons shall only be entitled to indemnification hereunder (subject to the other provisions of this Article VI) from PHMD for all such Losses incurred by Purchaser Indemnified Persons in excess of such $250,000 threshold.
(d) The amount of any Losses for which indemnification is provided under this Agreement shall be reduced by (i) any amounts realized by the Indemnified Person as a result of any indemnification, contribution or other payment by any third party, (ii) any insurance proceeds actually recovered by any Indemnified Person (which amount shall be reduced by the amount by which insurance premiums for the Indemnified Person are increased as a direct result of the Losses for which such insurance proceeds were received by the Indemnified Person) or any amounts actually recovered by any Indemnified Person pursuant to any indemnification agreement with any Person and (iii) any Tax savings actually realized by the Indemnified Person (or its Affiliate) in the taxable year in which the Loss is incurred. The Indemnified Persons shall use their commercially reasonable efforts to pursue any claims for insurance, Tax benefits, indemnification, contribution and/or other payments available from third parties with respect to Losses for which it will seek, or has sought, indemnification hereunder.
(e) Notwithstanding anything to the contrary in this Agreement, the limitations, thresholds and qualifications set forth in this Article VI: (i) shall not apply in the case of fraud or willful breach, or (ii) in any manner preclude an Indemnified Person from seeking any non-monetary equitable remedy, including specific performance or a preliminary or permanent injunction.
(f) No claim for indemnification may be made by a Purchaser Indemnified Person and no indemnification shall be required to the extent that the Losses sustained or incurred by such Purchaser Indemnified Person for which indemnification is sought were treated and taken into account as a liability in the Working Capital.
(g) Subject to Section 6.3(f), the indemnification provided in this Article VI and in Section 7.2 (including all limitations contained herein) shall be the sole and exclusive remedy for all matters relating to this Agreement, the transactions contemplated hereby, and for the breach of any representation, warranty, covenant or agreement contained herein, and Purchaser and PHMD each expressly waive any and all claims which it may have with respect to the foregoing, other than any Indemnification Claims to the extent provided for in this Article VI and in Section 7.2.
(h) The representations, warranties, covenants and obligations of a Party and the rights and remedies that may be exercised by the Indemnified Persons based on such representations, warranties, covenants and obligations, will survive and not be limited or affected by any investigation conducted by any Indemnified Person with respect to, or any knowledge acquired (or capable of being acquired) by such Indemnified Person at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of, or compliance with or performance of, any such representation, warranty, covenant or obligation, and no Indemnified Person shall be required to show that it relied on any such representation, warranty, covenant or obligation of a Party in order to be entitled to indemnification pursuant to this Article VI.
(i) Solely for the purpose of calculating Losses arising under this Article VI in respect of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if (but, for the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes avoidance of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and doubt, not for purposes the purpose of determining whether a any such breach of the occurred), any Material Adverse Effect, materiality, material or similar limitation set forth in such representation has occurred, the amount of such Loss or warranty shall be determined without limitation by such Material Adverse Effect or materiality qualificationsdisregarded.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made Except in the case of fraud, intentional misrepresentation or intentional breach, the Indemnified Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 10.01 shall be subject to the following limitations: 9.2(a)(i) or Section 9.2(a)(ii) unless and until (i) the Representative shall have no liability with respect to any given claim for claims made under Section 10.01 until the aggregate amount Losses, such claim is individually in excess of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) 25,000 (the “ThresholdIndividual Basket Amount”) (it being understood that the Indemnified Parties may recover for the full amount of such Losses once the claim exceeds such Individual Basket Amount), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, and (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute Indemnified Parties, as a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder group, shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated actually paid, incurred, suffered or sustained at least $1,000,000 in Losses in the making of fraudulent misrepresentations or aggregate (the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company“Basket Amount”), in which case the Company Stockholder directly participating Indemnified Parties shall be entitled to recover all Losses, including the Basket Amount, paid, incurred, suffered or sustained by the Indemnified Parties as a group. For the avoidance of doubt, the limitations set forth in the fraud this Section 9.3(a) shall not have any limitation on its liability apply to indemnification claims under this Article 10clauses (iii) – (x) of Section 9.2(a), inclusive.
(b) The Parent liability Except in the case of fraud, intentional misrepresentation or intentional breach, the Indemnified Parties sole and exclusive source of recovery for all indemnification claims made under Section 10.02 9.2(a) shall be subject recourse against the cash held in the Escrow Fund, and the liability of each Indemnifying Party for indemnification claims under Section 7.2(a) shall be limited, in the aggregate, to the following limitations: (i) the Parent shall have no liability for a dollar amount equal to such claims until the aggregate amount Indemnifying Party’s Pro Rata Portion of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsEscrow Amount.
(c) In the event of a breach by a Party of any representation fraud, intentional misrepresentation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if intentional breach, the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party Indemnified Parties shall be entitled to bring indemnification claims directly against the Indemnifying Parties; provided, however, that (i) the Indemnified Parties shall only be permitted to recover pursuant to this Article 10 (Losses from the Indemnifying parties in respect of such fraud, intentional misrepresentation or intentional breach if and the application extent that the Escrow Fund is no longer available, and (ii) in no event shall the liability of any Indemnifying Party for any fraud, intentional breach or intentional misrepresentation exceed the Merger Consideration otherwise receivable by such Indemnifying Party hereunder (but for such fraud, intentional breach or intentional misrepresentation), unless any such Indemnifying Party either committed or had actual knowledge of such fraud, intentional misrepresentation or intentional breach (in which event there shall be no limitation on the liability of such Indemnifying Party hereunder or under applicable Law except to the extent imposed under applicable Law).
(d) Nothing in this Agreement shall limit the liability of an Indemnifying Party in connection with a claim based on fraud, intentional misrepresentation or intentional breach committed by such Indemnifying Party or with the actual knowledge of such Indemnifying Party at the time of its commission.
(e) Notwithstanding any provision of this Agreement to the contrary, no Indemnifying Party shall have any indemnification obligations to any Indemnified Party with respect to Losses incurred by reason of or arising out of any reduction in the amount of any U.S. federal, state, local and non-U.S. net operating loss carryover, Tax credit carryover or similar Tax attribute of the Threshold and Company or any Subsidiary arising in any Pre-Closing Tax Period below the Parent Threshold) and not for purposes of determining amount set forth on the applicable Tax Return with respect to such period (each, a “Tax Attribute”), whether a breach such reduction occurs by reason of the representation has occurredcarryback or other utilization of such Tax Attribute by the Company, any Subsidiary or the Surviving Corporation, the filing of any amended Tax Return for the Company or any Subsidiary, the redetermination of the amount of such Loss Tax Attribute by any Governmental Entity or otherwise; provided, however, that nothing in this Section 9.3(e) shall be determined without limitation by such Material Adverse Effect or materiality qualificationsaffect the Indemnifying Parties’ indemnification obligations for Pre-Closing Taxes pursuant to Article IX.
Appears in 1 contract
Sources: Merger Agreement (Acxiom Corp)
Limitations on Indemnification. (a) The Representative’s liability To the extent that the JVP Indemnified Parties are entitled to indemnification for all claims made under Liabilities pursuant to Section 10.01 10.1, the Parent Parties shall be subject to the following limitations: not have any Liability (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars (any individual indemnifiable item which does not exceed $5,000,000) 100,000 (the “Individual Indemnity Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, and (ii) in respect of those individual indemnifiable items that exceed the Representative’s Individual Indemnity Threshold, unless the aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item Liabilities relating to Taxes all such individual indemnifiable items exceed in the aggregate, an amount equal to one percent (1%) of the Closing Cash Contribution (the “Deductible Amount”), and then only to the extent of any such excess; provided that is referenced in Schedule 4.10 (x) any materiality or material adverse effect qualifier to any representation or warranty (other than Excluded Materiality Matters) subject to indemnification shall be disregarded and (y) to the extent provided in Section 6.9, the Post-Signing Schedule 4.10(b)Updates shall be effective with respect to the representations and warranties, in each case, for purposes of determining whether the Individual Indemnity Threshold or the Deductible Amount shall have been exceeded. In no event shall the Parent Parties’ aggregate liability to the JVP Indemnified Parties exceed amount equal to twenty percent (20%) of the Company Disclosure Schedules Closing Cash Contribution (the “Ceiling Amount”). Notwithstanding the foregoing, this Section 10.9(a) shall constitute a Loss not apply to indemnification for which a Parent Indemnified Party shall be entitled Liabilities relating to recovery pursuant HS Fundamental Representations or to Section 10.01. No Company Stockholder shall have any liability for any claims made indemnification obligation under Section 10.01 10.1(b), (to the extent not capable of being paid by the Representativec) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10(d).
(b) The In the event a JVP Indemnified Party makes any claim pursuant to Section 10.1(a) relating to a breach of Section 11.1 with respect to rights-of-way, easements and servitudes (an “Easement Claim”), the Parent liability for all claims made under Section 10.02 Parties shall be subject to elect one of the following limitationsremedies: (i) pay the JVP Indemnified Parties liquidated damages in an amount equal to $500 per rod multiplied by the greater of (x) the number of rods affected by such breach or (y) the number of rods required to circumvent such breach or (ii) assume all of the Liabilities associated with such breach in which event such claim shall be deemed to be an Indemnity Claim for purposes of Sections 10.6 through 10.8, in each case, subject to the limitations set forth in Sections 10.9(a), (c) and (d). The Parent Parties shall make such election by written notice to the JVP Indemnified Party within twenty (20) days following receipt of notice of the Easement Claim. The failure to make such election within such twenty (20) day period shall be deemed an election by the Parent Parties to assume the Liabilities under clause (ii) above. The payment of liquidated damages pursuant to this Section 10.9(b) with respect to an Easement Claim shall have no liability for such claims until not affect the aggregate amount right of the Losses incurred by a Stockholder Indemnified Party or Stockholder JV Indemnified Parties exceeds Five Million Dollars to assert a subsequent claim associated with a subsequent Indemnity Claim based on the same underlying breach. The foregoing provisions of this Section 10.9(b) shall not apply to an Indemnity Claim relating to a breach of Section 11.1 nor to any Easement Claim that could adversely affect the operation of the Haynesville Business in a material respect ($5,000,000) (collectively, the “Parent ThresholdOther Title Claims”). With respect to any Other Title Claim, provided that if such Parent Threshold is exceededthe JVP Indemnified Parties shall be entitled to exercise the rights to indemnity pursuant to Section 10.1, subject to the limitations set forth in Section 10.9(a), (c) and (d). Notwithstanding the foregoing but without affecting the rights of JVP Indemnified Parties, the Parent Parties shall have the non-exclusive right, at their expense, to seek to cure title defects underling any Other Title Claim. Any indemnity obligation payment by any Parent Parties to any JVP Indemnified Party (other than Newco) with respect to Liabilities relating to Easement Claims shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action reduced by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions50%.
(c) In the event of a breach calculating any amount to be paid by a an Indemnifying Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application reason of the Threshold and the Parent Threshold) and not for purposes provisions of determining whether a breach of the representation has occurredthis 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 Loss shall proceeds.
(d) None of the Parent Parties or JVP will be determined without limitation liable as an indemnitor under this Agreement for any punitive or exemplary damages suffered or incurred by the Indemnified Party or Parties, except to the extent such Material Adverse Effect or materiality qualificationsdamages result pursuant to Indemnity Claims (excluding the Parties hereto and their Affiliates, including Newco).
Appears in 1 contract
Sources: Formation and Contribution Agreement (Petrohawk Energy Corp)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to Other than in the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until case of fraud, the aggregate amount Liability of the Losses incurred by a Parent Indemnified Party or Parent Seller required to provide indemnification under this ARTICLE VIII in respect of any Loss for which the Seller shall indemnify the Purchaser Indemnified Parties exceeds Five Million Dollars ($5,000,000under this ARTICLE VIII pursuant to Section 8.2(a)(i) (the “Threshold”or Section 8.2(a)(iii), provided that if such Threshold is exceededas the case may be, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating the Holdback Amount; provided, however, such limitation shall not apply to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) any Loss suffered by the Purchaser Indemnified Parties with respect to breaches of the Company Disclosure Schedules shall constitute a Loss Excluded Representations, for which a Parent the maximum amount recoverable by the Purchaser Indemnified Party Parties shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (an amount equal to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Base Purchase Price.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent Seller shall have no liability Liability in respect of any Loss for which the Seller shall indemnify the Purchaser pursuant to Section 8.2(a)(i) or Section 8.2(a)(iii), as the case may be, unless and until the amount that would otherwise be recoverable from the Seller in respect of any such claims until Loss, when aggregated with any other amounts so recoverable from the Seller pursuant to this ARTICLE VIII, exceeds $150,000 (the “Deductible Amount”), and in the event the aggregate amount of any such Loss exceeds the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceededDeductible Amount, the Parent Seller shall only be liable for all Losses starting from the first dollar amount of any such Losses and (ii) Loss in excess over the Parent’s aggregate liability for all Deductible Amount; provided, however, such claims limitation shall not exceed $35,000,000; except that Losses resulting from or arising out of apply to any fraudulent misrepresentations or fraudulent action Loss suffered by the Parent shall result in the Parent being liable to the Stockholder a Purchaser Indemnified Party or Stockholder Indemnified Parties with respect to the full extent breaches of the Stockholder Indemnified Party Excluded Representations or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsfraud.
(c) In For purposes of calculating the event amount of any Loss related to a breach by a Party of any representation or warranty given or made by that Party contained in this Agreement, the representations and warranties contained in this Agreement that is qualified so as shall be considered without regard to only be deemed breached if the representation would have a any “material,” “Material Adverse Effect on a Party or is otherwise qualified as to “materialityEffect” or “in any material respect,” then similar qualifications contained therein. In addition, for the purposes of determining this ARTICLE VIII, in calculating the amount of Loss for which a Party any Loss, the amount of each claim shall be entitled deemed to recover be an amount (i) net of any Tax benefit actually realized by Purchaser in the year the Loss occurred, the Company or any Affiliate as a result of such Loss and (ii) net of any insurance proceeds and any indemnity, contribution or other similar payment recovered by Purchaser, the Company or any Affiliate of either from any third Person with respect thereto in the year the Loss occurred.
(d) In no event shall the Seller be liable for punitive, exemplary or special Losses (including, but not limited to, lost profits) pursuant to this Article 10 ARTICLE VIII unless such Losses are payable to a third party.
(e) Notwithstanding anything to the contrary contained herein, and the application subject to Section 8.5:
(i) any obligation of the Threshold Seller for indemnification for Losses pursuant to Section 8.2(a)(i) or Section 8.2(a)(iii) shall be satisfied solely by an offset against the Holdback Shares and the Parent Threshold) and not for purposes of determining whether a breach any other obligation of the representation has occurredSeller for indemnification for Losses pursuant to Section 8.2(a)(i) shall be satisfied solely by, an offset against the Holdback Shares, in each case equal to the quotient obtained by dividing (i) the amount of such Loss by (ii) the Per Share Price; provided, however, that this Section 8.4(e) shall be determined without limitation not limit any obligation of the Seller for indemnification for Losses pursuant to Section 8.2(a)(i) for Excluded Representations or pursuant to Section 8.2(a)(iv) in the event that all of the Holdback Shares have been offset for Losses in accordance with this ARTICLE VIII; and
(ii) in the event the Seller is required to indemnify a Purchaser Indemnified Party for Losses pursuant to this ARTICLE VIII following the complete offset of the Holdback Shares, the Seller may satisfy all or some of such obligations through the surrender of shares of Parent Stock then held by the Seller and issued pursuant to this Agreement equal to the quotient obtained by dividing (i) the amount of such Material Adverse Effect Loss by (ii) the Per Share Price.
(f) Notwithstanding anything to contrary contained herein, and subject to Section 8.4 and Section 8.5, if a Purchaser Indemnified Party makes an indemnification claim pursuant to Section 8.2(a)(i) arising out of or materiality qualificationsrelating to the Company Subsidiary with respect to which the Company has a claim for indemnification under the terms of the Company Subsidiary Acquisition Agreement, then the Purchaser shall either (i) first use commercially reasonable efforts to pursue such claim under the Company Subsidiary Acquisition Agreement directly and forego all claims for indemnification with respect to the same subject matter hereunder to the extent the Purchaser recovers all applicable Losses with respect thereto, or (ii) pursue such claim hereunder and take all actions and execute all documents reasonably necessary to assign such claim or other legal right under the Company Subsidiary Acquisition Agreement to Seller so Seller may pursue such claim or legal right.
Appears in 1 contract
Sources: Stock Purchase Agreement (Clean Energy Fuels Corp.)
Limitations on Indemnification. Notwithstanding anything to the contrary set forth herein, from and after the Closing:
(a) The Representative’s liability for all claims made under Section 10.01 No Indemnified Party shall be subject entitled to indemnification pursuant to this Article 13 unless a valid Notice of Claim is duly delivered by such Indemnified Party to the following limitations: Indemnifying Party prior to the expiration of the applicable Survival Period.
(b) No Buyer Indemnified Party shall be entitled to indemnification pursuant to Section 13.2(a)(ii) (i) unless and until the Representative amount of Losses arising from any single event in respect of which such Buyer Indemnified Party is otherwise entitled to indemnification pursuant to Section 13.2(a)(ii) exceeds an amount equal to $47,000 (the “Single Claim Limit”) (it being understood and agreed that any such Losses below the Single Claim Limit shall have no liability for claims made under Section 10.01 not be counted towards the determination of the Threshold, unless and until the aggregate amount of all such Losses exceeds the amount of the Threshold), and (ii) subject to the preceding clause (i), unless and until the aggregate amount of all Losses incurred by a Parent Indemnified Party or Parent in respect of which the Buyer Indemnified Parties are otherwise entitled to indemnification pursuant to Section 13.2(a)(ii) exceeds Five Million Dollars (an amount equal to $5,000,000) 705,000 (the “Threshold”), provided that if such Threshold is exceeded, whereupon the Representative Buyer Indemnified Parties shall be liable entitled to indemnification for all Losses starting from the first dollar amount of such LossesLosses for which the Purchaser Indemnified Parties would, (iibut for this Section 13.3(b), be liable, and not just amounts in excess of the Threshold; provided, however, that the foregoing limitations in this Section 13.3(b) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars apply to claims for indemnification pursuant to Section 13.2(a)(ii) for breaches of or inaccuracies in any Fundamental Seller Representations or the representations and warranties of Seller set forth in Section 4.10(g).
($50,000,000c) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent No Seller Indemnified Party shall be entitled to recovery indemnification pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative13.2(b)(ii) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) unless and until the Parent amount of Losses arising from any single event in respect of which such Seller Indemnified Party is otherwise entitled to indemnification pursuant to Section 13.2(b)(ii) exceeds an amount equal to the Single Claim Limit (it being understood and agreed that any such Losses below the Single Claim Limit shall have no liability for such claims not be counted towards the determination of the Threshold, unless and until the aggregate amount of all such Losses exceeds the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (amount of the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) subject to the Parent’s preceding clause (i), unless and until the aggregate liability amount of all Losses in respect of which the Seller Indemnified Parties are otherwise entitled to indemnification pursuant to Section 13.2(b)(ii) exceeds an amount equal to the Threshold, whereupon the Seller Indemnified Parties shall be entitled to indemnification for all the amount of such claims Losses for which the Seller Indemnified Parties would, but for this Section 13.3(c), be liable; provided, however, that the foregoing limitations in this Section 13.3(c) shall not exceed $35,000,000; except that Losses resulting from apply to claims for indemnification pursuant to Section 13.2(b)(ii) for breaches of or arising out of inaccuracies in any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsFundamental Buyer Representations.
(cd) In no event shall the cumulative indemnification obligations of Seller pursuant to Section 13.2(a)(ii) (i) in respect of breaches of or inaccuracies in the representations and warranties made by Seller in this Agreement (other than the representations and warranties of Seller set forth in Section 4.10(g) or any Fundamental Seller Representations) in the aggregate exceed $5,875,000, (ii) in respect of breaches of or inaccuracies in the representations and warranties of Seller set forth in Section 4.10(g) in the aggregate exceed an amount equal to (A) $23,500,000 minus (B) the indemnification obligations of Seller pursuant to Section 13.2(a)(ii) in respect of breaches of or inaccuracies in the representations and warranties described in clauses (i) and (iii) of this Section 13.3(d), and (iii) in respect of breaches of or inaccuracies in the Fundamental Seller Representations in the aggregate exceed an amount equal to (A) the Cash Purchase Price minus (B) the indemnification obligations of Seller pursuant to Section 13.2(a)(ii) in respect of breaches of or inaccuracies in the representations and warranties described in clauses (i) and (ii) of this Section 13.3(d).
(e) In no event shall the cumulative indemnification obligations of Buyer pursuant to Section 13.2(b)(ii) (i) in respect of breaches of or inaccuracies in the representations and warranties made by Buyer in this Agreement (other than any Fundamental Buyer Representations) in the aggregate exceed $5,875,000 and (ii) in respect of breaches of or inaccuracies in the Fundamental Buyer Representations, together with those breaches and inaccuracies described in clause (i) of this Section 13.3(e), in the aggregate exceed the Cash Purchase Price.
(f) In the event that a particular matter entitles an Indemnified Party to indemnification pursuant to more than one clause of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Article 13, such Indemnified Party shall be entitled to recover pursuant to a particular dollar of Losses associated with such matter only once under this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications13.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent A Purchaser Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery may assert an Indemnification Claim pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (9.2(a)(i) with respect to representations and warranties of the Seller only to the extent the Purchaser Indemnified Party gives notice of the Indemnification Claim pursuant to Section 9.4(a) before the expiration of the applicable time period set forth in Section 9.1 for such representation and warranty. Any Indemnification Claim not capable of being paid made in accordance with Section 9.4(a) by the Representative) unless that Company Stockholder directly participated Purchaser Indemnified Parties on or before the applicable date set forth in the making of fraudulent misrepresentations or the taking of fraudulent actions Section 9.1, and Seller’s indemnification obligations with respect thereto, will be irrevocably and unconditionally released and waived by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Purchaser Indemnified Parties.
(b) The Parent liability Notwithstanding the provisions of this Article IX, Seller shall not have any indemnification obligations for all claims made Losses under Section 10.02 shall be subject to the following limitations: 9.2, (i) for any individual item where the Parent shall have no liability for such claims until Loss relating thereto is less than $100,000 and (ii) in respect of each individual item where the Loss relating thereto is equal to or greater than $100,000, unless the aggregate amount of all such Losses exceeds three (3%) percent of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (Purchase Price, and then only to the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar extent of such excess. In no event shall the aggregate amount of Losses and to be paid by Seller under Section 9.2 exceed ten (ii10%) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent percent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsPurchase Price.
(c) In No representation or warranty of Seller contained herein shall be deemed untrue or incorrect, and Seller shall not be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event of a which (i) is disclosed in response to another representation or warranty contained in this Agreement or (ii) Purchaser is aware as of the Closing Date.
(d) The amount of any Losses for which indemnification is provided under this Article IX shall be net of any amounts actually recovered or recoverable by the indemnified party under insurance policies or otherwise, and net of any Tax benefit realized by Purchaser with respect to such Losses.
(e) For purposes of calculating the amount of any Losses for which indemnification for any breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to provided under this Article 10 IX (and the application of the Threshold and the Parent Threshold) and but not for purposes of determining whether a breach of the any particular representation or warranty contained herein has occurredbeen breached), the amount of such Loss shall be determined without limitation by such any materiality or Material Adverse Effect qualifications in the applicable representations or materiality qualificationswarranties shall be ignored.
(f) Notwithstanding anything contained in this Agreement to the contrary, Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges and agrees that, except for the representations and warranties contained in Article V (as modified by the Schedules hereto), neither Seller nor any other Person is making any express or implied representation or warranty with respect to Seller, the Business, the Purchased Assets, the Excluded Assets, the Assumed Liabilities, the Retained Liabilities, Seller’s Affiliates or the transactions contemplated by this Agreement, and Seller disclaims any representations or warranties, whether made by Seller or its Affiliates, officers, directors, employees, agents or representatives. Any claims a Purchaser Indemnified Party may have for breach of representation or warranty shall be based solely on the representations and warranties of Seller set forth in Article V (as modified by the Schedules hereto as supplemented or amended). In furtherance of the foregoing, except for the representations and warranties contained in Article V (as modified by the Schedules hereto), Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges and agrees that none of Seller, any of its Affiliates or any other Person will have or be subject to any liability to a Purchaser Indemnified Party or any other Person for, and Seller hereby disclaims all liability and responsibility for, any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Purchaser or its Affiliates or representatives, including any confidential memoranda distributed on behalf of Seller relating to the Business or the Purchased Assets or other publications or data room information provided to Purchaser or its Affiliates or representatives, or any other document or information in any form provided to Purchaser or its Affiliates or representatives in connection with the sale of the Purchased Assets and the transactions contemplated hereby (including any opinion, information, projection, or advice that may have been or may be provided to Purchaser or its Affiliates or representatives by any director, officer, employee, agent, consultant, or representative of Seller or any of its Affiliates) or for Purchaser’s use of any such information.
(g) Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges that it has conducted to its satisfaction, its own independent investigation of the condition, operations and business of the Business and the Purchased Assets (including all activated and deactivated pipelines) and, in making its determination to proceed with the transactions contemplated by this Agreement, each of the Purchaser Indemnified Parties has relied on the results of Purchaser’s independent investigation. The disclosure of any matter or item in any schedule hereto shall not be deemed to constitute an acknowledgment that any such matter is required to be disclosed.
(h) Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges that the properties of the Business have asbestos-containing materials. Seller hereby disclaims all liability and responsibility with respect to any claims or Liabilities arising therefrom or related thereto, and Purchaser, on behalf of itself and each of the other Purchaser Indemnified Parties, acknowledges that it shall have no claims against Seller with respect thereto.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: (i) the Representative shall have contrary in this Agreement, no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Purchaser Indemnified Party shall be entitled to recovery indemnification pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to 14.2(a)(i) until the extent not capable aggregate amount of being paid all Damages incurred by the RepresentativePurchaser Indemnified Parties exceeds $775,000 (the “Deductible”), in which event the Purchaser Indemnified Party may assert its right to indemnification hereunder only for such Damages in excess of the Deductible; provided that in no event shall the aggregate indemnification for all claims of the Purchaser Indemnified Parties pursuant to Section 14.2(a) unless exceed the sum of (i) the Cash Escrow Deposit and (ii) the maximum amount of the Contingent Consideration earned under this Agreement; provided, further, that Company Stockholder directly participated the Deductible shall not apply in the making respect of fraudulent misrepresentations or the taking intentional breaches of fraudulent actions by the Company representations and warranties or to any Damages resulting from, arising out of, or incurred in connection with any failure of the parties referred to any representation or warranty contained in the definition of Knowledge Section 6.1 (Organization of the Company), in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Section 6.2 (Power and Authority; Effect of Agreement), Section 6.5 (Subsidiaries), Section 6.7 (Capitalization), Section 6.20 (Taxes) and Section 6.26 (No Brokers).
(b) The Parent liability for all claims made under Section 10.02 Notwithstanding anything to the contrary in this Agreement, no Purchaser Indemnified Party shall be subject entitled to indemnification pursuant to Section 14.2(a)(iv) with respect to any matter that should have been, but was not, included in the following limitations: (i) the Parent shall have no liability for such claims calculation of Working Capital until the aggregate amount of the Losses all Damages incurred by a Stockholder Indemnified Party or Stockholder the Purchaser Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”)remaining balance of the Working Capital Deductible, provided that if such Parent Threshold is exceededany, not applied against any adjustment to the Parent shall be liable Closing Date Cash Consideration required by the Final Statement pursuant to Section 4.3, and then only for all Losses starting from the first dollar amounts in excess of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsremaining balance, if any.
(c) In No indemnified party shall be entitled to recover from an indemnifying party more than once in respect of the event same Damages or indemnification claim, it being understood that this sentence is intended to preclude a duplicate recovery by such indemnified party.
(d) Only the Securityholders’ Representative, on behalf of the Securityholder Indemnified Parties, may assert a breach by a Party of any representation or warranty given or made by that Party claim for indemnification against Purchaser pursuant to this Article XIV.
(e) Notwithstanding anything contained elsewhere in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Agreement, no Purchaser Indemnified Party shall be entitled to recover indemnification in respect of any Damages to the extent such Damaged consists of Liabilities included in (i) the Closing Date Indebtedness which reduced the Closing Date Cash Consideration pursuant to this Section 3.3(c), or (ii) the Working Capital as finally determined pursuant to Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsIV.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability Parent Indemnified Parties shall not be entitled to indemnification in respect of any Losses for all claims made which indemnity is claimed under Section 10.01 shall be subject to the following limitations: (i11.3(a) the Representative shall have no liability for claims made under Section 10.01 above, unless and until the aggregate amount of the all such Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Hundred Thousand Dollars ($5,000,000500,000) (the “ThresholdThreshold Amount”), provided provided, that if such the aggregate amount of Losses claimed exceeds the Threshold is exceededAmount, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which then a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by claim, and the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 Stockholders shall be subject obligated to indemnify such Parent Indemnified Party, for the following limitations: (i) the Parent shall have no liability for such claims until the aggregate total amount of all Losses including all amounts comprising the Threshold Amount. The maximum amount of Losses incurred by a Stockholder Indemnified Party or Stockholder that the Purchaser Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall will be entitled to recover pursuant to this Article 10 Section 11.3(a)(i) above is Eight Million Two Hundred Thousand Dollars ($8,200,000).
(i) The Parent shall not be required to indemnify the Stockholder Indemnified Parties in respect of any Losses for which indemnity is claimed under Section 11.3(b) above, unless and until the application aggregate amount of all such Losses exceeds the Threshold Amount, provided, that if the aggregate amount of Losses claimed exceeds the Threshold Amount, then a Stockholder Indemnified Party shall be entitled to claim, and the Parent Threshold) and not shall be obligated to indemnify such Stockholder Indemnified Party, for purposes of determining whether a breach of the representation has occurred, the total amount of such Loss shall all Losses including all amounts comprising the Threshold Amount. The maximum amount of Losses that the Stockholder Indemnified Parties will be determined without limitation by such Material Adverse Effect or materiality qualificationsentitled to recover pursuant to Section 11.3(b)(i) above is Eight Million Two Hundred Thousand Dollars ($8,200,000).
Appears in 1 contract
Limitations on Indemnification. (a) The Representative8.3.1 In no event shall Seller’s aggregate liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no 8.1.1 or Buyer’s aggregate liability for claims made under Section 10.01 until 8.1.2 (excluding with respect to Buyer’s obligation to pay the aggregate Purchase Price, which shall not count against the limitations provided herein), respectively, exceed the amount of the Losses incurred by a Parent Purchase Price.
8.3.2 No Party shall have any liability under this Article 8 for an otherwise indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (and is due and payable, so long as the “Threshold”)claim for such Loss was timely submitted pursuant to the provisions of this Article 8.
8.3.3 Except with respect to Losses arising from Excluded Taxes, provided that if such Threshold is exceeded, the Representative no Party shall be liable for all any Losses starting under this Article 8 to the extent the Buyer Indemnitees or the Seller Indemnitees, as applicable, failed to mitigate such Losses in accordance with applicable Laws. Each Party shall, and shall cause its respective Affiliates to, use commercially reasonable efforts to mitigate any Loss indemnifiable hereunder (except with respect to Losses arising from Excluded Taxes) upon and after becoming aware of any event that could reasonably be expected to give rise to any such Loss. For the first dollar avoidance of doubt, nothing in this Section 8.3.3 shall be interpreted as in any way limiting any Party’s rights or obligations under Section 5.13.
8.3.4 The amount of Losses recovered by an Indemnified Party under Section 8.1.1 or Section 8.1.2, as applicable, shall be reduced by (a) any amounts actually recovered by the Indemnified Party from a Third Party in connection with such Lossesclaim, (iib) the Representative’s aggregate liability for all claims amount of any insurance proceeds paid to the Indemnified Party relating to such claim (including under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000the R&W Policy) and (iiic) no item relating any Tax benefit arising from any Losses that are attributable to the Purchased Subsidiary, but only to the extent that (x) the related indemnification payment does not result in a reduction in the tax basis of any asset of Buyer or its Affiliates other than the Purchased Shares and (y) such Tax benefit is actually realized by the Indemnified Party in cash in the current year and taxable year immediately following in which such Losses are incurred (calculated on a “with and without” basis), net of any reasonable, documented, out of pocket costs and expenses or Taxes incurred by the Indemnified Party in connection with obtaining such recovery, proceeds or Tax benefit. An Indemnified Party shall use its commercially reasonable efforts to collect insurance proceeds for any Loss that is subject to indemnification by any Indemnifying Party under Section 8.1.1 or Section 8.1.2, as applicable. If any amounts referenced in Schedule 4.10 the preceding clauses (other than Schedule 4.10(b)a) and (b) are received after payment by the Indemnifying Party of the Company Disclosure Schedules full amount otherwise required to be paid to an Indemnified Party pursuant to this Article 8, the Indemnified Party shall constitute repay to the Indemnifying Party, promptly after such receipt, any amount that the Indemnifying Party would not have had to pay pursuant to this Article 8 had such amounts been received prior to such payment (net of any Taxes or other costs incurred by the Indemnified Party in connection with the collection or receipt of any such amounts).
8.3.5 In the event that an Indemnified Party has any rights against a Third Party with respect to any occurrence, claim or Loss for which that results in a Parent payment by an Indemnifying Party under this Article 8, such Indemnifying Party shall be subrogated to such rights to the extent of such payment. Without limiting the generality of any other provision hereof, each Indemnified Party shall duly execute upon request all instruments reasonably necessary to evidence and perfect the subrogation and subordination rights detailed herein, and otherwise cooperate in the prosecution of such claims.
8.3.6 For the avoidance of doubt, no Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have indemnification under this Article 8 in respect of any liability for any claims made under Section 10.01 (Loss to the extent not capable such Indemnified Party has been previously indemnified or reimbursed in respect of being paid by the Representative) unless that Company Stockholder directly participated in the making such Loss pursuant to any other provision of fraudulent misrepresentations or the taking of fraudulent actions by the Company this Agreement or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out provision of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Ancillary Agreement. No Party shall be entitled to recover pursuant any payment, adjustment or indemnification more than once with respect to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationssame matter.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Bausch & Lomb Corp)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 Any Indemnifiable Claim shall be subject limited to the following limitations: amount of actual damages sustained by the Indemnified Party by reason of a breach or nonperformance by the Indemnifying Party, less (i) any Tax benefits by the Representative shall have no liability for claims made under Section 10.01 until Indemnified Party based on the aggregate amount present value thereof, discounted at the Agreed Rate as of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar time of such Lossesclaim, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar reason of such Losses and (ii) the Parent’s aggregate liability for all dollar amount of any insurance proceeds paid to the Indemnified Party with respect to such claims Losses; provided, that payment of such Indemnifiable Claim shall not exceed $35,000,000be withheld pending resolution or final payment with respect to any such insurance proceeds; except and provided further, that any insurance proceeds paid to the Indemnified Party with respect to Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by for which the Parent Indemnified Party has previously received payment pursuant to this Article XII shall result be promptly delivered to the Indemnifying Party.
(b) Except in the Parent being liable case of breaches of the representations and warranties in Sections 4.1, 4.2(a), 4.4(a) and 4.4(c)(i), Koppers shall not be required to indemnify Buyer under Section 12.1 unless the amount of the claim for Losses exceeds $100,000 per individual claim or series of related claims arising from the same set of facts or circumstances (the “Per Claim Amount”) and unless the aggregate amount of all claims for which indemnity would otherwise be payable by Koppers to Buyer under Section 12.1 exceeds $1,000,000 (the “Deductible Amount”), and, in such event, Koppers shall be responsible only for the amount in excess of the Deductible Amount. Except in the case of breaches of the representations and warranties in Sections 4.2(b) and 4.4(b), CI shall not be required to indemnify Buyer under Section 12.2 unless the amount of the claim for Losses exceeds the Per Claim Amount and unless the aggregate amount of all claims for which indemnity would otherwise be payable by CI to Buyer under Section 12.2 exceeds the Deductible Amount, and, in such event, CI shall be responsible only for the amount in excess of the Deductible Amount. Notwithstanding any provision of this Agreement to the Stockholder Indemnified Party or Stockholder Indemnified Parties contrary, but subject only to Section 12.5(c) below, Koppers’ indemnity obligations under Section 12.1 shall be limited, in the full extent aggregate, to ten percent (10%) of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsKoppers Purchase Price.
(c) In With respect to any breaches or inaccuracies of the event representations and warranties in Sections 4.1, 4.2(a), 4.4(a), 4.4(c)(i) and 4.7(a), the maximum aggregate liability of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining Koppers will equal the amount of Loss for which a Party shall be entitled the Koppers Purchase Price and with respect to recover any indemnity obligation of Koppers pursuant to this Article 10 (Section 12.1(d), the Per Claim Amount, Deductible Amount and the application aggregate liability limitation set forth in Section 12.5(b) shall not apply. With respect to any breaches or inaccuracies of the Threshold representations and the Parent Thresholdwarranties in Sections 4.2(b), 4.4(b), 4.4(d) and not for purposes 4.7(b), the maximum aggregate liability of determining whether a breach of the representation has occurred, CI will equal the amount of the CI Purchase Price.
(d) Buyer shall not be required to indemnify Sellers under Section 12.3 unless with respect to any such Loss claim the amount thereof shall exceed the Per Claim Amount and the aggregate of all amounts for which indemnity would otherwise be payable by Buyer in respect of all such claims by Sellers exceeds the Deductible Amount, and in such event, Buyer shall be determined without limitation by such Material Adverse Effect responsible only for the amount in excess of the Deductible Amount.
(e) For the avoidance of doubt, the parties acknowledge and agree that the matters described Sections 4.9(d) and 4.11(b) of the Disclosure Schedule shall not give rise to or materiality qualificationsotherwise form a basis upon which Buyer may seek indemnification under this Agreement.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for maximum aggregate amount of indemnifiable Losses that may be recovered by the Buyer Indemnitees pursuant to Section 10.2(a) will be the Indemnity Escrow Amount (the “Cap”) and all claims made indemnifiable Losses pursuant to Section 10.2(a) will be satisfied solely and exclusively from the then remaining Indemnity Escrow Fund, except with respect to indemnifiable Losses in respect of the Specified Representations and any claim under Section 10.01 shall 10.2(a)(iii) to the extent provided in following sentences of this Section 10.3(a). With respect to any Losses in respect of Specified Representations and any claim under Section 10.2(a)(iii) that the R&W Insurer has not (i) excluded from the coverage provided under the R&W Policy and/or (ii) denied coverage under the R&W Insurance Policy for such claim, will be paid solely and exclusively as follows: (A) first, from the Indemnity Escrow Fund until the Indemnity Escrow Fund is exhausted, (B) second, from the R&W Insurance Policy, and (C) third, to the extent any such amounts are not recovered under clauses (A) and (B), the Buyer may recover the amount of such excess from the Seller and each Rollover Stockholder, on a several and not joint basis, in accordance with the Pro Rata Percentages and pursuant to the Rollover Agreements; provided, that, notwithstanding anything to the contrary in this Agreement, the maximum aggregate amount of indemnifiable Losses that may be recovered by the Buyer Indemnities pursuant to clause (C) of this Section 10.3(a) will be $7,590,000 (the “Overall Cap”); provided, further, that if the R&W Insurer denies any part of a claim for any reason, then solely with respect to the other parts of such claim in respect of which coverage is not denied, the Buyer will be entitled to recover the amount of such excess (subject to the Overall Cap) from the Seller and the Rollover Stockholders pursuant to clause (C) of this Section 10.3(a). For the avoidance of doubt, any Specified Representations that the R&W Insurer (x) excludes from the coverage provided under the R&W Policy and/or (y) denies (solely with respect to the part of any claim that is denied) coverage under the R&W Insurance Policy for a claim will be subject to the following limitations: Cap (i) and not the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”Overall Cap), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything in this Agreement to the following limitations: (i) contrary, no indemnification claims for Losses will be asserted by the Parent shall have no liability for such claims until Buyer Indemnitees under Article X unless the aggregate amount of Losses that would otherwise be payable under Section 10.2(a) exceeds an amount equal to 0.75% of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) Enterprise Value (the “Parent ThresholdDeductible”), provided that if such Parent Threshold is exceededwhereupon the Buyer Indemnitees will be entitled to receive only amounts for Losses in excess of the Deductible, in which case, the Parent shall Buyer Indemnitee will be liable entitled to indemnification for all Losses starting from the first dollar amount of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable up to the Stockholder Indemnified Party Cap or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsOverall Cap, if applicable.
(c) In Each Indemnitee under this Article X shall use its commercially reasonable efforts to mitigate any Losses which form the event basis of a breach an indemnification claim hereunder.
(d) No Party will be obligated to indemnify any other Person with respect to (i) any representation, warranty, covenant or condition specifically waived in writing by a the other Party on or prior to the Closing, (ii) any Losses actually included dollar for dollar in the Final Adjustment set forth in Section 2.3 (with the intent of this provision to merely be to avoid “double counting” and not to limit any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled right to recover pursuant to this Article 10 (and the application for Loss that arises out of the Threshold and the Parent Threshold) and not for purposes or results from any breach in excess of determining whether a breach of the representation has occurred, the amount of such Loss shall that adjusts the Purchase Price and is recovered pursuant to the Purchase Price adjustment set forth in Section 2.3), or (iii) for any Losses for which a Claims Notice was not duly delivered prior to the Cut-Off Date.
(e) Any Loss under this Agreement will be determined without limitation duplication of net amounts actually recovered dollar for dollar by reason of the state of facts giving rise to such Material Adverse Effect Losses constituting a breach of more than one representation, warranty, covenant or materiality qualificationsagreement (with the intent of this provision to merely be to avoid “double counting” and not to limit any right to recover for Loss that arises out of or results from any breach in excess of the amount of such Loss recovered pursuant to any other representation, warranty, covenant or agreement).
(f) The provisions of this Section 10.3 (including with respect to the Cap, the Overall Cap and the Deductible) are not applicable to, and will not in any way limit, claims under the R&W Insurance Policy, except as and to the extent expressly set forth in the R&W Insurance Policy.
Appears in 1 contract
Sources: Equity Purchase Agreement (Compass Group Diversified Holdings LLC)
Limitations on Indemnification. (a) The Representative’s liability With respect to Damages for all claims made any Warranty Breach by Seller under Section 10.01 shall be subject Section 10.02(a)(i) or by Buyer or Parent under Section 10.02(b) (in each case, other than for a Warranty Breach relating to any of the following limitations: Fundamental Representations):
(i) the Representative maximum aggregate liability of Seller for a Warranty Breach under Section 10.02(a)(i) and for Buyer and Parent for a Warranty Breach under Section 10.02(b), respectively, shall have no liability for claims made not exceed $4,150,000; and
(ii) neither Seller under Section 10.01 10.02(a)(i) , nor Buyer and Parent under Section 10.02(b), shall be required to indemnify the other party for Damages for a Warranty Breach (other than relating to the Fundamental Representations) under such Section until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties all such Damages exceeds Five Million Dollars ($5,000,000) 250,000 (the “ThresholdBasket”), provided that if such Threshold is exceededand then only for Damages in excess of the Basket.
(b) The aggregate liability of Seller, on the Representative shall be liable one hand, and of Buyer and Parent, on the other hand, for all Losses starting from the first dollar of such Lossesindemnification obligations hereunder, (ii) the Representative’s aggregate liability except for all claims indemnification obligations under Section 10.01 Section 10.02(a)(iii), shall not exceed Fifty Million Dollars $41,500,000.
($50,000,000c) and (iii) no item relating An Indemnified Party seeking indemnification hereunder shall use commercially reasonable efforts to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss mitigate Damages for which such indemnification is sought.
(d) The “Damages” for which indemnification is provided pursuant to this Article 10 shall not include any incidental, indirect, consequential, punitive, exemplary, or special damages, losses, liabilities or expenses, or any lost profits or diminution in value, unless in each such case such claims are brought by a Parent third party.
(e) The Buyer Indemnified Parties shall not be entitled to make any indemnification claim for Damages to the extent the item giving rise to such Damages was taken into account in the determination of, and included in, the Final Closing Adjustment Payment.
(f) No Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability indemnification under this Article 10 for any claims made under Section 10.01 (amount to the extent not capable such Indemnified Party or its Affiliate has been indemnified or otherwise compensated for such amount (including by receipt of being paid by the Representativeinsurance proceeds) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company pursuant to this Agreement or any of the parties referred to in the definition of Knowledge of the Companyother Contract; provided, in which case the Company Stockholder directly participating in the fraud that an Indemnified Party shall not have be required to file any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject claim with respect to the following limitations: any insurance coverage (i) in the Parent shall have no liability for event that such Indemnified Party has other claims until under such insurance policies that, when taken together with such Damages, would exceed the aggregate amount policy limits of the Losses incurred by a Stockholder Indemnified Party applicable insurance policies, or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all where such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party reasonably concludes that seeking insurance coverage for such Damages would materially and adversely affect such Indemnified Party’s claims history, insurance premium, or Stockholder Indemnified Parties ability to the full extent of the Stockholder renew or replace such insurance coverage on acceptable terms (determined without reference to any claims such Indemnified Party or Stockholder Indemnified Parties Losses resulting from has filed under such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by insurance coverage that Party in this Agreement that is qualified so as do not relate to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss matters for which a such Indemnified Party shall be is entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsindemnification hereunder).
Appears in 1 contract
Sources: Asset Purchase Agreement (Ultra Clean Holdings Inc)
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement, (a) The Representative’s UCB shall not have any liability under Section 9.01(a) hereof (other than for breaches of the Specified Representations) unless the aggregate liability for all claims made Losses suffered by the Purchaser Indemnitees thereunder exceeds [***], and then only to the extent of such excess; (b) UCB’s aggregate maximum liability under Section 10.01 shall be subject to the following limitations: 9.01(a) hereof (i) the Representative shall have no liability other than for claims made under Section 10.01 until the aggregate amount breaches of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000Specified Representations) shall not exceed [***] (the “ThresholdCap”), provided that if such Threshold is exceeded, the Representative ; (c) no party shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate have any liability for all claims under Section 10.01 9.01(a) or Section 9.02(a) hereof for any individual Loss of less than [***] and such individual Losses shall not exceed Fifty Million Dollars be aggregated for purposes of the preceding clauses ($50,000,000a) and (iiib); (d) UCB shall not have any liability for any otherwise indemnifiable Loss to the extent (x) the matter giving rise to such Loss had been specifically reserved or provided for in the Most Recent Balance Sheet or (y) taken into account in the Working Capital Statement; (e) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder party shall have any liability for any claims made under Section 10.01 (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 claim for such Loss was timely submitted pursuant to the extent not capable provisions of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
IX; and (bf) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent party shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or any otherwise indemnifiable Loss arising out of any fraudulent misrepresentations breach of any representation, warranty, covenant or fraudulent action agreement of such party unless a claim therefor is asserted with specificity and in writing by the Parent Indemnified Party timely in accordance with Section 9.08 hereof, failing which such claim shall result in the Parent being liable be waived and extinguished. The waiver of any condition to the Stockholder Indemnified Party or Stockholder Indemnified Parties to Closing based on the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party accuracy of any representation or warranty given or made by that Party on the performance of or compliance with any covenant or agreement shall be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or warranty, covenant, agreement or obligation. Purchaser’s aggregate maximum liability under Section 9.02(a) hereof (other than for breaches of the Purchaser Specified Representations) shall not exceed the Cap. Notwithstanding anything to the contrary contained in this Agreement that is qualified so as Agreement, UCB shall not have any liability under Section 9.01(d) hereof unless the aggregate liability for Losses suffered by the Purchaser Indemnitees thereunder exceeds $15,000,000, and then only to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount extent of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsexcess.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made right of Indemnified Parties to indemnification under Section 10.01 6.2 shall be subject to the following limitations: provisions:
(i) Indemnification with respect to Warranty Claims shall expire on the Representative earlier to occur of (A) a Qualified Public Offering or (B) thirty (30) days after receipt by the Company of the audited financial statements of the Company for the fiscal year ending December 31, 1996; provided, however, that the limitation of this clause (i) shall not apply to (x) Warranty Claims involving fraud, intentional misrepresentation or breach of Section 2.4 or 2.16, (y) Taxes, for which the period for making such claims shall expire on the date which is six (6) months after the termination of the applicable statute of limitations relating thereto and (z) claims arising from the defense or disposition of Data Dynamics, Inc. v. R&D Systems Company if such ------------------------------------------ lawsuit has not been finally adjudicated as of such date (in which event appropriate reserves for the estimated liabilities, losses and expenses arising from such lawsuit shall remain in escrow (which reserves will not, in any event exceed $650,000)). If prior to the relevant date of expiration a specific state of facts shall have no liability for claims made under become known which may constitute or give rise to any Warranty Claim as to which indemnity may be payable and an Indemnified Party shall have given notice of such facts to the Founders, then the right to indemnification with respect thereto shall remain in effect without regard to when such matter shall have been finally determined and disposed of, according to the date on which notice of the applicable claim is given.
(ii) No indemnification shall be payable with respect to Warranty Claims (other than those involving fraud, intentional misrepresentation, breach of Section 10.01 until 2.4 or 2.16 or Taxes) to Indemnified Parties unless the aggregate total of all Warranty Claims shall exceed $500,000 in the aggregate, whereupon only the amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative excess claims shall be liable for all Losses starting recoverable in accordance with the terms hereof; provided, however, that with respect to indemnification claims relating -------- ------- to Section 6.2(d) hereof, indemnification shall be available from the first dollar of such Lossesloss or claim, notwithstanding anything herein to the contrary.
(iiiii) the Representative’s aggregate liability for all claims under Section 10.01 The Founders shall not exceed be obligated to indemnify Indemnified Parties for Warranty Claims (other than any such claims involving fraud, intentional misrepresentations, or Taxes) after the cumulative amount of all amounts paid by the Founders to Indemnified Parties with respect thereto exceeds FOUR MILLION NINE HUNDRED THOUSAND DOLLARS ($4,900,000) and the sole remedy with respect to any such claim described in this Section 6.3(a)(iii) shall be as provided in the Escrow Agreement; provided, further, that the Founders -------- ------- shall not be obligated to indemnify Indemnified Parties for indemnification claims relating to Section 6.2(d) in an amount in excess of Six Hundred and Fifty Million Thousand Dollars ($50,000,000650,000).
(iv) and (iii) no item relating The limitations herein with respect to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) certain Warranty Claims shall not limit the rights of the Company Disclosure Schedules shall constitute a Loss for which a Parent any Indemnified Party shall be entitled with respect to recovery pursuant to any other claims arising under provisions of Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to 6.2 and the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Founders shall not have any limitation on its liability under this Article 10right of contribution from, or claims against, the Company with respect to their indemnification claims hereunder.
(b) The Parent liability In the event any claim for all claims made indemnification hereunder arises under more than one provision of Section 10.02 shall 6.2 and as such may be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover limitations pursuant to this Article 10 (and Section 6.3 if deemed to arise under a particular provision but not if deemed to arise under a different provision, then the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss claim shall be determined without limitation by such Material Adverse Effect deemed to arise under the provision to which no restrictions or materiality qualificationsthe least restrictive provisions apply.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary contained in this Agreement, (i) the Representative shall have no liability a NexVerse Indemnified Person may not make a claim for claims made under Section 10.01 Damages until the aggregate amount of claims by NexVerse Indemnified Persons exceeds five hundred thousand dollars ($500,000), at which time and thereafter the Losses NexVerse Indemnified Persons shall be entitled to recover all such Damages, and (ii) a Seller Indemnified Person may not make a claim for Damages (x) under Section 8.01(b)(i) until the aggregate amount of claims by Seller Indemnified Persons under Section 8.01(b)(i) exceeds five hundred thousand dollars ($500,000), and (y) under Section 8.01(b)(ii) until the aggregate amount of claims by Seller Indemnified Persons under Section 8.01(b)(ii) exceeds one hundred fifty thousand dollars ($150,000), at which time in each such instance and thereafter the Seller Indemnified Persons shall be entitled to recover all such Damages.
(b) Notwithstanding anything to the contrary contained in this Agreement, (i) the aggregate liability of the Sellers pursuant to this Article VIII shall not exceed seven million five hundred thousand dollars ($7,500,000) and (ii) the aggregate liability of NexVerse pursuant to this Article VIII shall not exceed seven million five hundred thousand dollars ($7,500,000).
(c) Notwithstanding anything to the contrary contained in this Agreement, the aggregate Damages incurred by the Sellers shall, for purposes of Section 8.01(b)(ii) above, equal, (i) with respect to Damages incurred by the Sellers, the Damages incurred by the Sellers arising out of, based on or resulting from such claims and (ii) with respect to Damages incurred by NexVerse, the product of (x) the Damages incurred by NexVerse arising out of, based on or resulting from such claims and (y) the percentage obtained by dividing the number of outstanding shares of NexVerse capital stock held by ECI and its affiliates immediately following the closing of the transactions contemplated by the Series C Financing Documents by the total number of outstanding shares of NexVerse capital stock immediately following such closing, in both cases in an as-converted to common basis.
(d) Notwithstanding anything to the contrary contained in this Agreement, the form of remedy with respect to Damages under Section 8.01(a) and 8.01(b) shall be as follows:
(i) In the case of a Parent claim or claims by NexVerse Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars Persons pursuant to Section 8.01(a) for aggregate Damages of up to three million five hundred thousand dollars ($5,000,0003,500,000) (the “"Cash Indemnity Threshold”"), provided that if the remedy for all such Threshold is exceededDamages shall be in the form of the cancellation of shares of NexVerse Common Stock issued to the Sellers ("Indemnity Shares") having a value equal to such Damages, based upon a price per share of $0.1716 (the "Stipulated Value").
(ii) In the case of a claim or claims by NexVerse Indemnified Persons pursuant to Section 8.01(a) for aggregate Damages in excess of the Cash Indemnity Threshold, the Representative shall be liable remedy for all Losses starting such Damages (from the first dollar of Damages) shall be the pursuit of all remedies at law for breach of this Agreement available to such LossesNexVerse Indemnified Person for the full amount of Damages, (ii) subject to the Representative’s limitations on aggregate liability for all claims under set forth in Section 10.01 shall not exceed Fifty Million Dollars ($50,000,0008.02(b) and above.
(iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) In the case of the Company Disclosure Schedules shall constitute a Loss for which a Parent claim or claims by Seller Indemnified Party shall be entitled to recovery Persons pursuant to Section 10.01. No Company Stockholder shall have any liability 8.01(b) for any claims made under Section 10.01 (aggregate Damages up to the extent not capable of being paid by Cash Indemnity Threshold, the Representative) unless that Company Stockholder directly participated remedy for all such Damages shall be in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any form of the parties referred issuance by NexVerse of Indemnity Shares having a value equal to in such Damages, based upon the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Stipulated Value.
(biv) The Parent liability In the case of a claim or claims by Seller Indemnified Persons pursuant to Section 8.01(b) for aggregate Damages in excess of the Cash Indemnity Threshold, the remedy for all claims made under Section 10.02 shall be subject to the following limitations: such Damages (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (iiDamages) shall be the Parent’s aggregate liability pursuit of all remedies at law for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out breach of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable this Agreement available to the Stockholder Seller Indemnified Party or Stockholder Indemnified Parties Persons for the full amount of Damages, subject to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionslimitations on liability set forth in Section 8.02(b) above.
(cv) In order to effectuate the event provisions of a breach by a Party this paragraph (d) relating to the form of any representation remedy, the NexVerse Indemnified Persons or warranty given or made by that Party in this Agreement that is qualified so the Seller Indemnified Persons, as to only be deemed breached if applicable, shall have until the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application first anniversary of the Threshold and Closing to initiate pursuit of their claims for indemnification under this Section 8.01, notwithstanding the Parent Threshold) and not for purposes requirement to comply with the notice provisions of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsSection 8.03 with respect to third party claims.
Appears in 1 contract
Limitations on Indemnification. Except for claims arising out of fraud or intentional misrepresentation:
(a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: A (i) the Representative Seller Indemnified Party shall have no liability for claims made not be entitled recover any Losses under Section 10.01 13.2(b)(i) in respect of any breach or inaccuracy of any of the representations and warranties made by Buyer in the Transaction Agreements (other than any Buyer Fundamental Representation) and (ii) Buyer Indemnified Party shall not be entitled to recover any Losses under Section 13.2(a)(i) in respect of any breach or inaccuracy of any representations or warranties made by the Sellers in the Transaction Agreements (other than any Seller Fundamental Representation), in each case unless and until the aggregate amount of the all Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds is at least Five Million Hundred Thousand Dollars ($5,000,000500,000) (the “ThresholdBasket”), provided that if such Threshold is exceeded, after which the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent applicable Buyer Indemnified Party Parties shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to recover the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the all of such Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses without regard to the Basket.
(b) The maximum aggregate amount of Losses that the Buyer Indemnified Parties shall be entitled to recover:
(i) under Section 13.2(a)(i): (i) in respect of any breach of or inaccuracy in any representations or warranties made by the Sellers (other than any Seller Fundamental Representation) set forth in any Transaction Agreement shall be limited to the amount then available in the Escrow Fund, and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out in respect of any fraudulent misrepresentations breach of or fraudulent action inaccuracy in any Seller Fundamental Representation shall be limited to One Hundred Twenty Million Dollars ($120,000,000);
(ii) for fraud, intentional misrepresentation, or under Sections 13.2(a)(ii) through 13.2(a)(vi) shall be unlimited; and
(iii) under Section 13.2(a)(vii) shall be limited to the amount then available in the Escrow Fund plus the aggregate amounts actually paid by Buyer or Acquisition Sub under the Transition Services Agreement (provided, that notwithstanding anything in the Transition Services Agreement to the contrary, any amounts accrued but unpaid by Buyer owed to the Sellers will be forfeited by the Parent shall result in the Parent being liable Sellers to the Stockholder Indemnified Party or Stockholder Indemnified Parties extent necessary to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from satisfy such fraudulent misrepresentations or fraudulent actionsrecovery).
(c) In The maximum aggregate amount of Losses that the event of a breach by a Party Seller Indemnified Parties shall be entitled to recover:
(i) under Section 13.2(b)(i): (i) in respect of any representation breach of or warranty given inaccuracy in any representations or warranties made by that Party Buyer (other than any Buyer Fundamental Representation) set forth in this Agreement that is qualified so shall be limited to Twelve Million Dollars ($12,000,000) as reduced by any Losses recovered by the Seller Indemnified Parties, and (ii) in respect of any breach of or inaccuracy in any Buyer Fundamental Representation shall be limited to only One Hundred Sixteen Million Three Hundred Thousand Dollars ($116,300,000); and
(ii) for fraud, intentional misrepresentation or under Sections 13.2(b)(ii) through 13.2(b)(iii) shall be deemed breached unlimited.
(d) So long as the amount available in the Escrow Fund (calculated for all purpose as if the representation would value of a share of the Buyer Common Stock were equal to (i) the Closing Date Price, if there is no Additional Stock Consideration, or (ii) the Effective Date Price, if there is Additional Stock Consideration) exceeds the aggregate amount of all claims for indemnification, compensation or reimbursement that have a Material Adverse Effect on a been asserted but not resolved, the Buyer Indemnified Parties shall seek to recover amounts in respect of any claims for indemnification, compensation or reimbursement under Section 13.2(a) from the Escrow Fund prior to seeking to recover amounts in respect of such claims directly from the Sellers or Parent Holders; provided, however, that to the extent any amounts are released from the Escrow Fund to any Buyer Indemnified Party with respect to claims for indemnification that are not subject to the limitation set forth in Section 13.3(a), such recovered amounts shall not reduce the amount that the Buyer Indemnified Parties may recover with respect to claims for indemnification, compensation or is otherwise qualified as reimbursement that are subject to “materiality” or “the limitation contained in any material respect,” then for purposes of Section 13.3(a).
(e) In determining the amount of Loss Losses for which a the Indemnified Party is entitled to indemnification under this Article 13, the gross amount of the indemnification will be reduced by (i) any insurance proceeds actually received by the Indemnified Party (excluding any costs incurred by an Indemnified Party in recovering or seeking to recover any insurance proceeds), and (ii) all amounts actually recovered by the Indemnified Party under contractual indemnities from third Persons; provided, however, that unless required by applicable Law, no Indemnified Party shall be entitled have any obligation to seek recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect under any insurance policy or materiality qualificationsfrom any third party Persons.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative No Indemnifying Party hereto shall have no any liability for claims made with respect to, or obligation to indemnify for, Losses under Section 10.01 until Article XI hereof unless the cumulative aggregate amount of the Loss or Losses incurred by a Parent Indemnified from the Closing Date through the date of indemnification and for which such Indemnifying Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (would, but for the “Threshold”)provisions of this Section 11.05, provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from exceeds $500,000, but in such event the first dollar Indemnifying Party’s obligations under Article XI hereof will be the cumulative aggregate amount of such LossesLoss or Losses in excess of $500,000; provided, (ii) however, that the Representative’s aggregate liability for all claims under Section 10.01 deductible provided by this section shall not exceed Fifty Million Dollars ($50,000,000apply to any Loss or Losses related to a breach of a covenant in Sections 7.13, 7.16(b) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the RepresentativeInsurance Policy is actually issued) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10and 8.01.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything in this Agreement to the following limitations: contrary, (i) the Parent maximum aggregate indemnification liability of Sellers, on the one hand, and the Buyer, on the other hand, shall have no liability for not exceed $7,000,000, provided, however, that such claims until the aggregate amount cap shall not apply to any Loss or Losses related to a breach of the a representation in Sections 3.02, 3.05, 3.06 or any Loss or Losses incurred by related to a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000breach of a covenant in Sections 7.13, 7.16(b) (to the “Parent Threshold”)extent the Insurance Policy is actually issued) and 8.01, provided that if which in any such Parent Threshold is exceeded, the Parent case shall be liable for all Losses starting from limited to the first dollar of such Losses Purchase Price, and (ii) the Parent’s maximum aggregate indemnification liability of each Seller under this Article XI for all such claims any reason shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent portion of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from Purchase Price actually received by such fraudulent misrepresentations or fraudulent actionsSeller.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party Notwithstanding anything in this Agreement to the contrary, Sellers shall not provide any indemnification hereunder with respect to the representations and warranties set forth in Sections 3.21 and 3.24.
(d) Notwithstanding anything in this Agreement to the contrary, Sellers shall not provide any indemnification hereunder with respect to any Loss that is qualified so as to only be deemed breached if arises out of facts and circumstances that could form the representation would have basis of a Material Adverse Effect on a Party reasonable claim under the Insurance Policy, whether or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation has actually been covered by such Material Adverse Effect or materiality qualificationsthe Insurance Policy.
Appears in 1 contract
Limitations on Indemnification. (ai) The Representative’s liability Notwithstanding anything contained in this Agreement to the contrary, Gerszberg, ▇▇▇▇▇▇▇ and the Transferors, on the one hand, and Iconix, on the other hand, shall not be obligated to indemnify the other party unless and until a claim is asserted before the end of the relevant survival period specified in Section 4.11(a)(ii). In addition, notwithstanding anything contained in this Agreement to the contrary, Gerszberg, ▇▇▇▇▇▇▇ or the Transferors shall not be required to pay an aggregate amount in excess of Twenty Million Dollars ($20,000,000) (the “Cap”) in respect of all Losses incurred by the Iconix Indemnified Parties by reason of the breach of warranty or misrepresentation of Gerszberg, ▇▇▇▇▇▇▇ or the Transferors, and Iconix shall not be required to pay an aggregate amount in excess of the Cap in respect of all Losses incurred by the MEE Indemnified Parties by reason of the breach of warranty or misrepresentation of Iconix. No party to this Agreement shall have an obligation for all claims made indemnification under this Section 4.11 unless the aggregate Losses suffered by the MEE Indemnified Parties or Iconix Indemnified Parties, as the case may be, under Section 10.01 4.11(c) or 4.11(b), respectively, exceed Two Hundred Fifty Thousand Dollars ($250,000) (the “Basket”). Losses to which the Basket applies, as described in the preceding sentence, are hereinafter referred to as the “Basket Losses” At such time as their Basket Losses exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, the MEE Indemnified Parties or Iconix Indemnified Parties, as applicable, shall be entitled to be indemnified against the full amount of all such Basket Losses that have been incurred or suffered by such indemnitees for which they are entitled to be indemnified under this Agreement (and not merely the portion of such Basket Losses exceeding Two Hundred Fifty Thousand Dollars ($250,000), subject to the Cap). Notwithstanding anything to the contrary contained in this Section 4.11(f) the amount of indemnity payable (i) by Gerszberg, ▇▇▇▇▇▇▇ and the Transferors as a result of any Losses arising out of (A) a breach of the representations and warranties contained in Sections 3.1(a) (Organization, Power, Qualification), 3.1(b) (Authorization, Enforceability), 3.1(d) (The Assets), 3.1(j) (No Brokers or Finders), 3.1(l) (Taxes), 3.1(q) (Taxes), 3.1(v) (Ownership of the Trademarks), 3.3(a) (Organization, Power, Qualification), or 3.3(b) (Authorization, Enforceability) of this Agreement or (B) the Excluded Liabilities or the Excluded Assets shall not be subject to the following limitations: (i) Cap or the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, Basket; (ii) the Representative’s aggregate liability for all claims under Section 10.01 by Iconix as a result of any Losses arising out of Sections 3.2(a) (Organization, Power, Qualification), 3.2(b) (Authorization, Enforceability) and 3.1(j) (No Brokers or Finders) of this Agreement shall not exceed Fifty Million Dollars ($50,000,000) be subject to the Cap or the Basket and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (by either Iconix, on the one hand, or ▇▇▇▇▇▇▇, Gerszberg and the Transferors, on the other than Schedule 4.10(b)) hand, as a result of Losses arising out of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations covenants or the taking of fraudulent actions by the Company or any agreements of the parties referred contained in this Agreement that by their terms are to in be satisfied after the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Closing Date shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) Cap or the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and Basket.
(ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of In calculating any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover Losses recoverable pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredSection 4.11, the amount of such Loss Losses shall be determined without limitation reduced by any insurance proceeds actually received by the indemnified party relating to such Material Adverse Effect Loss (net of any costs of collection of such amounts, including, but not limited to, attorneys fees and expenses) and any recoveries actually received by the indemnified party from third parties pursuant to indemnification or materiality qualificationssimilar obligations and increased by the cost of enforcing such claim for indemnification (including, but not limited to, attorney’s fees and expenses). The parties agree to treat any indemnification payment pursuant to this Section 4.11 as an adjustment to the Purchase Price for tax purposes.
(iii) Notwithstanding anything contained herein, each indemnifying party shall be liable only for actual Losses and shall not be liable for special, incidental, indirect, consequential or punitive damages.
Appears in 1 contract
Sources: Contribution and Sale Agreement (Iconix Brand Group, Inc.)
Limitations on Indemnification. (a) The Representative’s liability A Party may assert a claim for all claims made under Section 10.01 shall be subject indemnification pursuant to this Article VI only to the following limitations: extent the Indemnified Party gives a notice to the Indemnifying Party specifying the factual basis of such claim in reasonable detail to the extent known to the notifying Party (i) the Representative shall have no liability for claims made under pursuant to Section 10.01 until 6.2(a)(i) or Section 6.2(b)(i), prior to the aggregate amount expiration of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, applicable time period set forth in Section 6.1; (ii) for claims pursuant to Section 6.2(a)(ii), Section 6.2(a)(iii), Section 6.2(b)(ii) or Section 6.2(b)(iii), by the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) first anniversary of the Closing Date; and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery claims pursuant to Section 10.016.2(a)(iv) or Section 6.2(b)(iv) by the expiration of the second anniversary of the Closing. No Company Stockholder shall have If any liability claim for any claims indemnification is not made under in accordance with Section 10.01 (6.5 and the foregoing sentence by a Party on or prior to the extent not capable of being paid by applicable date set forth in Section 6.1 or this Section 6.3(a), the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10other Party’s indemnification obligations with respect thereto will be irrevocably and unconditionally released and waived.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding any provision to the following limitations: (i) the Parent contrary contained in this Agreement, neither Party shall have no liability for such claims to the other Party pursuant to Section 6.2 unless and until the aggregate amount of such Losses, individually or in the aggregate, exceed two hundred fifty thousand dollars ($250,000) and then, only for the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided above that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsamount.
(c) In Notwithstanding anything to the event contrary contained in this Agreement, the maximum amount of the indemnification obligation of Idaho Power under Section 6.2(a) to PacifiCorp and its Affiliates and Representatives shall not exceed an amount equal to the PacifiCorp Purchase Price. Notwithstanding anything to the contrary contained in this Agreement, the maximum amount of the indemnification obligation of PacifiCorp under Section 6.2(b) to Idaho Power and its Affiliates and Representatives shall not exceed an amount equal to the Idaho Power Purchase Price.
(d) The Parties acknowledge and agree that if any Party has knowledge of a material failure of any condition set forth in Section 2.11 or of a material breach by a the other Party of any representation or warranty given or made by that Party covenant or agreement contained in this Agreement that is qualified so as Agreement, through disclosure by the other Party pursuant to only be deemed breached if the representation would have a Material Adverse Effect on a Section 4.6 or because any Party or is otherwise qualified as aware, to “materiality” Idaho Power’s Knowledge or “in to PacifiCorp’s Knowledge, respectively, of any such material respect,” then for purposes of determining failure or material breach by the amount of Loss for which a other Party, and such Party proceeds with the Closing, such Party shall be deemed to have waived such condition or breach (but then only to the extent of such Party’s knowledge at Closing) and such Party and its successors, assigns and Affiliates and Representatives shall not be entitled to recover be indemnified pursuant to this Article 10 VI, to s▇▇ for damages or to assert any other right or remedy for any Losses reasonably relating to such condition or breach and such Party’s knowledge thereof at Closing, notwithstanding anything to the contrary contained herein or in any Related Document.
(e) Notwithstanding anything contained in this Agreement to the contrary, except for the representations and warranties contained in this Agreement, neither Party nor its Affiliates, Representatives or any other Person is making any other express or implied representation or warranty with respect to the application PacifiCorp Acquired Assets, the Idaho Power Acquired Assets, the PacifiCorp Assumed Obligations, the Idaho Power Assumed Obligations or the Contemplated Transactions and each Party disclaims and negates, and expressly waives, 38 any other representations or warranties, express (whether made by the other Party or its Affiliates or Representatives) or implied, at common law, by statute or otherwise relating to the PacifiCorp Acquired Assets, the Idaho Power Acquired Assets, the PacifiCorp Assumed Obligations, the Idaho Power Assumed Obligations or the Contemplated Transactions, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY AND ANY IMPLIED WARRANTY OF FITNESS. Any claims a Party may have pursuant to Sections 6.2(a)(i) and 6.2(b)(i) for breach of representation or warranty must be based solely on the representations and warranties of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach other Party set forth in this Agreement. In furtherance of the representation has occurredforegoing, except for the representations and warranties contained in this Agreement, each Party acknowledges and agrees that neither the other Party nor any of its Affiliates or Representatives will have or be subject to any liability to it or any of its Affiliates or Representatives for, and each Party hereby disclaims all liability and responsibility for, any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the other Party or any of the other Party’s Affiliates or Representatives. EACH PARTY HEREBY ACKNOWLEDGES THAT, EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN ARTICLE III, THE PACIFICORP ACQUIRED ASSETS AND IDAHO POWER ACQUIRED ASSETS ARE BEING PURCHASED ON AN “AS IS, WHERE IS” BASIS.
(f) Notwithstanding anything in this Section 6.3 to the contrary, except as otherwise may be ordered by a court of competent jurisdiction, the amount of such Loss Indemnified Party shall be determined without limitation bear its own costs, including counsel fees and expenses, incurred in connection with Claims against the Indemnifying Party hereunder that are not based upon Claims asserted by such Material Adverse Effect or materiality qualificationsthird parties.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be rights of the Tecogen Indemnified Parties and the Aegis Indemnified Parties to indemnification pursuant to the provisions of this Article VI are subject to the following limitations: :
(ia) Notwithstanding anything to the Representative shall have no liability contrary contained herein, except for claims made under Section 10.01 until the aggregate amount in respect of the Losses incurred breach of any Fundamental Representation or for claims in respect of fraud by a Parent ▇▇▇▇▇, no claims for indemnification by any Tecogen Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000pursuant to Section 6.02(a) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Lossesso asserted, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Tecogen Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 recover Losses, (to the extent not capable of being paid by the Representative1) unless that Company Stockholder directly participated in any individual Loss or group or series of related Losses exceeds Twenty Thousand Dollars ($20,000) (the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
“Basket”) and (b2) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims 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 Losses incurred by Basket) that would otherwise be payable hereunder exceeds on a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars (cumulative basis an amount equal to $5,000,000) 75,000 (the “Parent ThresholdDeductible”), provided that if such Parent Threshold is exceeded, and to the Parent shall be liable for all Losses starting from the first dollar of extent such Losses and (ii) exceed the Parent’s aggregate liability for all Deductible, such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Tecogen Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover all such Losses in excess of the Deductible.
(b) Notwithstanding anything to the contrary contained herein, except for claims in respect of fraud by ▇▇▇▇▇▇▇, no claims for indemnification by the Aegis Indemnified Party pursuant to Section 6.04(a) shall be so asserted, and no Aegis Indemnified Party shall be entitled to recover Losses, (1) unless any individual Loss or group or series of related Losses exceeds the 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 Basket) 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 Aegis Indemnified Party shall be entitled to recover all such Losses in excess of the Deductible.
(c) Notwithstanding anything to the contrary contained herein, except in the case of fraud by ▇▇▇▇▇, in no event shall Aegis have any liability under this Agreement in excess of the sum of the Post- Closing Consideration received by Aegis pursuant to this Article 10 Agreement during the two-year period commencing on the Closing Date.
(and d) Notwithstanding anything to the application contrary contained herein, except in the case of fraud by ▇▇▇▇▇▇▇, in no event shall Tecogen have any liability under this Agreement in excess of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach sum of the representation has occurredPost- Closing Consideration paid by Tecogen pursuant to this Agreement during the two-year period commencing on the Closing Date.
(e) Notwithstanding anything to the contrary contained herein, the amount of such Loss any Losses subject to recovery under this Article VI by the Tecogen Indemnified Parties shall be determined without limitation calculated net of any amounts (A) actually received from any third party insurance policy of Tecogen 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 Tecogen or its Affiliates in connection with such Material Adverse Effect or materiality qualifications.recovery) and (B) any Tax benefits realized by the Tecogen Indemnified
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made Notwithstanding anything in this Agreement to the contrary, in no event shall (i) the cumulative indemnification obligations of the Sellers under Sections 11.2(a), on the one hand, or the Buyer under Section 10.01 11.2(b), on the other hand, in the aggregate exceed an amount equal to the then available Indemnification Escrow Fund (the “Cap”); provided, however, that any and all breaches constituting Unrestricted Claims shall not be subject to the following limitationsCap and (ii) the aggregate amount of Losses paid by any Seller (other than a Kohlberg Entity) under Section 11.2(a) and Section 12.1 exceed the amount of proceeds actually received by such Seller under this Agreement for the sale of such Seller’s Shares on the Closing Date, provided, further, that, with respect to each Kohlberg Entity in no event shall the aggregate amount of Losses paid by any Kohlberg Entity or all of the Kohlberg Entities under Section 11.2(a) and Section 12.1 exceed the amount of proceeds actually received by all of the Kohlberg Entities under this Agreement for the sale of Shares of the Kohlberg Entities on the Closing Date.
(b) Notwithstanding anything in this Agreement to the contrary, no indemnification claims for Losses shall be asserted by the Seller Indemnitees or the Buyer Indemnitees, respectively, under ARTICLE XI for breaches of representations and warranties unless (i) any individual Loss or group or series of related Losses exceed $50,000 (such Loss or group or series of related Losses that does not exceed $50,000, the “DeMinimis Losses”), and (ii) the aggregate amount of Losses that would otherwise be payable under Section 11.2(a) and Section 11.2(b), respectively (which shall not include for such purposes DeMinimis Losses), exceed an amount equal to $1,000,000 (the “Basket Amount”), whereupon the Seller Indemnitee or the Buyer Indemnitee, as the case may be, shall be entitled to receive only amounts for Losses (which shall include for such purposes any DeMinimis Losses) in excess of the Basket Amount up to the Cap; provided, however, that any and all breaches of the covenants and agreements set forth in this Agreement and the Specified Representations shall not be subject to the Basket Amount, but instead shall be recoverable from “dollar one.”
(c) The cumulative indemnification obligations of the Sellers under Section 11.2(a) (other than for Unrestricted Claims) shall be recoverable solely from the Indemnification Escrow Fund (as shall be reduced from time to time to reflect payments, if any, made from time to time from the Escrow Fund in accordance with the terms and conditions of the Escrow Agreement). Subject to the last sentence hereof, the Buyer agrees and acknowledges on behalf of itself and the Buyer Indemnitees, that: (1) a Buyer Indemnitee must first assert any claim for indemnification under ARTICLE XI against the then available Indemnification Escrow Fund in accordance with the terms of the Escrow Agreement and (2) if the amount recoverable by a Buyer Indemnitee in respect of a breach of a Seller Covenant or a Seller Representation, in each case with respect to any Unrestricted Claim of a Seller exceeds the amount of the then available Indemnification Escrow Fund or if the Escrow Agreement has terminated pursuant to its terms, then (x) a Buyer Indemnitee shall assert such claim solely against that Seller who is in breach of the Unrestricted Claim, and no other Seller shall have any liability with respect to such Unrestricted Claim, and (y) in the case of an Unrestricted Claim that is a Company Representation or a Company Covenant, against the Sellers on a several basis based on their respective Seller Payment Transaction Percentage (and not on a joint or joint and several basis), for the amount of Losses not recovered by such Buyer Indemnitee from the then available Indemnification Escrow Fund. Notwithstanding the foregoing, in the case of any such claim against a Kohlberg Entity, (i) the Representative shall have no liability Buyer Indemnitees may assert a claim against any Kohlberg Entity for claims made under Section 10.01 until the aggregate amount any breach by any other Kohlberg Entity of the Losses incurred by any Unrestricted Claim that is a Parent Indemnified Party breach of a Seller Representation or Parent Indemnified Parties exceeds Five Million Dollars Seller Covenant and ($5,000,000ii) (the “Threshold”), provided that if such Threshold is exceeded, the Representative each Kohlberg Entity shall be liable based upon the aggregate Seller Payment Transaction Percentage of all Kohlberg Entities for all the amount of Losses starting from not recovered by such Buyer Indemnitee for such Unrestricted Claims. Notwithstanding the first dollar foregoing, the Buyer agrees and acknowledges on behalf of itself and the Buyer Indemnitees that in no event shall the Buyer or any other Buyer Indemnitee have any recourse against the Indemnity Escrow Fund in respect of any claim against any Seller who has not contributed to the Indemnity Escrow Fund (each, a “Non-Contributing Seller”) for the breach of a Seller Representation or a Seller Covenant of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the CompanyNon-Contributing Seller, in which case the Company Stockholder Buyer shall proceed directly participating in the fraud shall not have any limitation on its liability under this Article 10and solely against such Non-Contributing Seller.
(bd) Under no circumstances shall any Indemnitee be entitled to be indemnified for special, consequential or punitive damages, including diminution in value, multiple of earnings or profits theory, business interruptions, or loss of business opportunity or reputation damages (except to the extent included in a Third Party Claim). The Parent liability for all claims made party seeking indemnification under Section 10.02 this ARTICLE XI shall use its commercially reasonable efforts to mitigate any Loss which forms the basis of an indemnification claim hereunder.
(e) No party hereto shall be subject obligated to the following limitations: indemnify any other Person with respect to (i) any representation, warranty, covenant or condition specifically waived in writing by the Parent shall have no liability for other party on or prior to the Closing, (ii) any Losses with respect to any matter if such claims until matter was included in the aggregate amount calculation of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars Final Purchase Price ($5,000,000) (to the “Parent Threshold”extent so included), provided including in the calculation of Final Working Capital and Final Assumed Indebtedness, (iii) for any Losses for which a Claims Notice was not duly delivered prior to the applicable Cut-Off Date, (iv) any Losses to the extent which there is a related amount expressly reserved against in the Financial Statements and where such reserve was taken into account by Current Liabilities in the definition of Final Working Capital and (v) any Losses to the extent that if such Parent Threshold is exceededthey are included in the Bad Debt Adjustment.
(f) Notwithstanding anything to the contrary contained herein, (i) none of the Parent limitations on the indemnification obligations of the parties hereto shall be liable for all Losses starting from the first dollar of such Losses apply to claims based on fraud or intentional breaches and (ii) the Parent’s aggregate liability for all such claims representations and warranties of the Company and the Sellers contained herein shall not exceed $35,000,000; except that Losses resulting from be affected by any investigation conducted for or arising out on behalf of, or any knowledge possessed or acquired at any time by, the Buyer or its Affiliates, employees, or representatives concerning any circumstance, action, omission or event relating to the accuracy or performance of any fraudulent misrepresentations representation, warranty, covenant or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsobligation with respect thereto.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Sources: Stock Purchase Agreement (MBF Healthcare Acquisition Corp.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 Seller Group shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating be obligated to Taxes that is referenced indemnify or hold harmless the Parent Indemnitees in Schedule 4.10 (other than Schedule 4.10(b)) respect of any Losses suffered, incurred or sustained by any or all the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable Indemnitees in excess of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Merger Consideration.
(b) The Parent liability for all Indemnitees shall not be entitled to seek any indemnification claims made under Section 10.02 shall be subject or other relief or remedy hereunder or otherwise with respect to the following limitations: (i) the Parent shall have no liability for such claims transactions contemplated hereby, unless and until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in Indemnitees exceeds $100,000. If the Parent being liable Indemnitees incur losses in excess of $100,000, they shall be entitled to recover (in accordance with the Stockholder Indemnified Party provisions of this Section 8) all of such Losses, including the first Dollar thereof. The limitations set forth in this Section 8.4(b) shall not apply to any Losses that may arise or Stockholder Indemnified Parties to that may be suffered in connection with or as a result of, or that may be related to, any breach by the full extent Sellers or the Principals of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsprovisions of Section 5.19 hereof.
(c) In The Seller Indemnitees shall not be entitled to seek any indemnification claims or other relief or remedy hereunder or otherwise with respect to the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if transactions contemplated hereby, unless and until the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the aggregate amount of Loss for which a Party Losses by the Seller Indemnitees exceeds $100,000. If the Seller Indemnitees incur losses in excess of $100,000, they shall be entitled to recover pursuant to (in accordance with the provisions of this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount Section 8) all of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsLosses, including the first Dollar thereof.
Appears in 1 contract
Sources: Merger Agreement (CKX, Inc.)
Limitations on Indemnification. With respect to indemnification claims brought against any Indemnifying Party pursuant to Section 6.2(a) or Section 6.2(b) hereof, as applicable:
(a) The Representative’s liability for all other than with respect to Fraud and claims made under Section 10.01 shall be subject to based upon the following limitations: Fundamental Representations, (i) the Representative Equityholder Indemnifying Parties shall have no liability not be liable to the Purchaser Indemnified Parties for any Losses with respect to indemnity claims made under Section 10.01 6.2(a)(i) until such time as the aggregate amount of all such Losses with respect to the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties matters contained in Section 6.2(a)(i) exceeds Five Million Dollars ($5,000,000) 540,000.00 (the “ThresholdDeductible”), provided that if such Threshold is exceeded, the Representative shall be liable and then only for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) excess of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the CompanyDeductible, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s maximum aggregate liability of all Equityholder Indemnifying Parties under Section 6.2(a)(i) shall be no greater than $540,000.00 (the “General Reps Cap”) (it being understood and agreed that (x) the Purchaser Indemnified Parties shall have no further right to indemnification from the Equityholder Indemnifying Parties for all such claims Losses, and thereafter, any recovery for such Losses in excess of the General Reps Cap shall not exceed $35,000,000; except that be limited solely and exclusively to recovery under the R&W Insurance Policy and (y) each Equityholder Indemnifying Party’s individual maximum liability for such Losses resulting from or arising out shall be such Equityholder Indemnifying Party’s Percentage of any fraudulent misrepresentations or fraudulent action by the Parent General Reps Cap);
(b) the maximum aggregate liability of the Purchaser Indemnifying Party under Section 6.2(b)(i) and/or Section 6.2(b)(ii) shall result in the Parent being liable be an amount equal to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsTotal Consideration.
(c) In notwithstanding anything to the event of a breach by a Party of any representation or warranty given or made by that Party contrary contained in this Agreement, without limiting the right of setoff against Deferred Consideration or the Earnout, other than with respect to Fraud as described in Section 6.4(d), in no event shall any Equityholder Indemnifying Party be liable for any indemnifiable Loss or Losses under this Agreement that is qualified so as to only be deemed breached if in excess of the representation would have a Material Adverse Effect on a total proceeds actually received by such Equityholder Indemnifying Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 Agreement;
(and d) the application maximum aggregate liability for the Equityholder Indemnifying Parties under Section 6.2(a)(vii) shall be no greater than $5,000,000;
(e) in the case of liability for the Threshold and the Parent ThresholdFraud of an Indemnifying Party or of which an Indemnifying Party had actual knowledge, such Indemnifying Party’s liability shall not be limited; and
(f) and not for purposes of determining whether a breach of the representation has occurredin calculating amounts payable to any Indemnified Party hereunder, the amount of such Loss any indemnified Losses shall be determined without limitation net of any amounts actually recovered by any Indemnified Party (or its Affiliates) under any insurance policy (other than the R&W Insurance Policy), to which or under which such Indemnified Party (or any of its Affiliates, including the Surviving Corporation) is a party or under any indemnification, contribution, reimbursement or other similar agreement or arrangement (net of any reasonable out-of-pocket costs or expenses actually incurred in obtaining such recovery). If an Indemnified Party, after having received any indemnification payment with respect to any Losses pursuant to this Agreement from an Indemnifying Party, subsequently receives any insurance proceeds (other than under the R&W Insurance Policy) or other payment from a third party of the type referred to in this Section 6.4(e), such Indemnified Party shall promptly reimburse the Indemnifying Party in an amount equal the relevant portion of the insurance or other proceeds in respect of such Loss (after deducting any reasonable out-of-pocket costs or expenses actually incurred in obtaining such recovery), but not in excess of the amount of indemnification payments previously paid by such Material Adverse Effect or materiality qualificationsIndemnifying Party to the Indemnified Party in respect of such Loss.
Appears in 1 contract
Sources: Merger Agreement (N-Able, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary contained in this Agreement:
(i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Purchaser Indemnified Party shall be entitled to recovery for any claim for indemnification pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative9.3(a) unless that Company Stockholder directly participated in and until the making aggregate amount of fraudulent misrepresentations indemnifiable Losses to be recovered pursuant to Section 9.3(a) equals or exceeds $425,000 (the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company“Deductible”), in which case the Company Stockholder directly participating Purchaser Indemnified Parties may seek recovery only for the Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to Losses arising out of, relating to or resulting from (A) any inaccuracy in or breach of the Fundamental Representations, or (B) the instances of fraud set forth in Section 9.4(a)(iv);
(ii) no Indemnified Party shall be entitled to recover any amount relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Purchaser Indemnified Parties in the event of a Purchaser Indemnified Party, or other the Seller Indemnified Parties in the event of a Seller Indemnified Party) has already recovered such amount with respect to such matter pursuant to such provision or any other provisions of this Agreement;
(iii) except with respect to instances of fraud set forth in Section 9.4(a)(iv), the total aggregate amount of liability of the Sellers for Losses of the Purchaser Indemnified Parties under this Agreement, including this Article IX, shall be limited to $850,000 and shall be satisfied solely from the Indemnity Escrow Account and the total aggregate amount of liability of the Sellers for Losses of the Purchaser Indemnified Parties with respect to the matters set forth in Schedule 9.3(h) shall be limited to $150,000 and shall be satisfied solely from the Indemnity Escrow Account;
(iv) with respect to instances of fraud by any Seller in connection with this Agreement, any indemnification obligation of the Sellers for Losses under this Agreement shall be satisfied first from the Indemnity Escrow Amount, and then directly from only the Seller(s) who actually committed such fraud in proportion to each Seller’s responsibility for such fraud (it being understood and agreed that the liability of any Seller that did not commit fraud shall not have be limited solely to the funds remaining in the Indemnity Escrow Account); and
(v) no party shall be liable for any limitation on its liability under punitive damages relating to the breach of this Article 10Agreement, other than punitive damages paid by an Indemnified Party to a third party.
(b) The Parent liability for all claims made under Section 10.02 shall be subject parties hereto acknowledge and agree that, except with respect to the following limitations: (i) the Parent instances of fraud set forth in Section 9.4(a)(iv), (ii) injunctive or other equitable relief (but not monetary damages or relief) against any party for such party’s breach of any post-closing covenant contained in this Agreement, (iii) adjustments governed by Section 1.8, or (iv) matters under any Non-competition Agreement or Non-solicitation Agreement or the IP Assignment Agreement, solely with respect to the party to such agreement, (A) the indemnification provisions of this Article IX shall be the sole and exclusive remedy of each party hereto and each Indemnified Party with respect to any Losses, claims, liabilities or obligations arising out of, related to, or in connection with this Agreement or any Related Document and the transactions contemplated hereby or thereby, including any Exhibit, Schedule (including any Disclosure Schedules), certificate or other document delivered hereunder or thereunder, and recovery against the funds then remaining in the Indemnity Escrow Account (in accordance with the terms of this Agreement and the Escrow Agreement) shall be the sole and exclusive means of recovery for any claim for indemnification made by a Purchaser Indemnified Party pursuant to this Agreement, in each case regardless of the legal theory under which such Loss, claim, liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise, and the parties hereby agree that the Purchaser Indemnified Parties shall have no liability for such claims until the aggregate amount remedy or recourse with respect to any of the Losses incurred foregoing other than pursuant to, and subject to the terms and conditions of, this Article IX and (B) the Purchaser hereby waives on its own behalf and on behalf of its Affiliates (including the Acquired Companies and the Operating Company following the Closing) to the fullest extent permitted under Law, any and all claims, other rights and remedies, it or they may have against the Sellers or any Affiliates of any Seller arising under or based upon this Agreement or any Related Document, any document or certificate delivered in connection herewith, any Law, in equity or otherwise (including with respect to any environmental, health or safety matters), except pursuant to the indemnification provisions set forth in this Article IX. The rights and claims waived by a Stockholder Indemnified Party the Purchaser, on behalf of itself and its Affiliates (including the Acquired Companies and the Operating Company following the Closing), include claims for contribution or Stockholder other rights of recovery arising out of or relating to any claims for breach of contract, breach of representation or warranty, negligent misrepresentation and all other claims for breach of duty. Furthermore, the Purchaser acknowledges and agrees that the Purchaser Indemnified Parties exceeds Five Million Dollars may not avoid such limitation on liability or remedies by ($5,000,000i) (the “Parent Threshold”)seeking damages for breach of contract, provided that if such Parent Threshold is exceededtort or pursuant to any other theory of liability, the Parent shall be liable for all Losses starting from the first dollar of such Losses and which are hereby waived or (ii) the Parent’s aggregate liability asserting or threatening any claim against any Person that is not a party hereto (or a successor to a party hereto) for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent breaches of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In representations, warranties and covenants contained in this Agreement. The parties hereto agree that the event of a breach by a Party of any representation or warranty given or made by that Party provisions in this Agreement that is qualified so as relating to only be deemed breached if indemnification, and the representation would have a Material Adverse Effect limits imposed on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant Purchaser’s and the Purchaser Indemnified Parties’ rights and remedies with respect to this Article 10 (Agreement and the application transactions contemplated hereby (including this Article IX) were specifically bargained for between sophisticated parties and were specifically taken into account in the determination of the Threshold and amounts to be paid to the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsSellers hereunder.
Appears in 1 contract
Sources: Membership Interest and Stock Purchase Agreement (Oxford Industries Inc)
Limitations on Indemnification. (a) The Representative’s liability Each of the Buyer Indemnified Parties and the Seller Indemnified Parties shall be entitled to indemnification for all claims made Claims under Section 10.01 shall be subject 8.2(a) and Section 8.4(a) only to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until extent that the aggregate amount Damages with respect to such matters exceed one-half of one percent (.5%) of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars Final Purchase Price ($5,000,000) (such amount, the “Threshold”), provided that if such Threshold is exceeded, in which event the Representative Buyer Indemnified Parties or the Seller Indemnified Parties shall be liable responsible for all Losses starting from the first dollar aggregate amount of such LossesDamages regardless of the Threshold. However, (iithis Section 8.6(a) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) apply to Claims for breaches of the Fundamental Representations or to any breach of any of a Seller’s or the Company’s representations and (iii) no item warranties of which such Seller had knowledge on the date on which such representation or warranty was made or any intentional breach by such Seller or the Company of any covenant or obligation contained herein, Claims arising out of or relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations Kingsway Dispute, or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation Claims based on its liability under this Article 10fraud.
(b) The Parent liability for all claims made aggregate amount the Buyer Indemnified Parties or the Seller Indemnified Parties may recover hereunder under Section 10.02 8.2(a) and Section 8.4(a) shall be subject limited to an amount equal to ten percent 10% of the following limitations: Final Purchase Price (i) the Parent “Aggregate Liability Cap”), except in respect of a Claim for Damages under Section 6.9 or Claims for breach of the Fundamental Representations, for which the maximum aggregate liability shall have no liability for such claims until be the aggregate amount of the Losses incurred by a Stockholder Indemnified Party Final Purchase Price, or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or Claims arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable relating to the Stockholder Indemnified Party Kingsway Dispute or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsClaims based on fraud, for which there shall be no maximum aggregate liability limitation.
(c) In Except for Damages payable to third parties (all of which third party damages shall be deemed foreseeable), no Indemnifying Party shall be responsible for any Damages that the event Indemnifying Party could not reasonably have foreseen at the time of execution of this Agreement.
(d) The aggregate amount that the Buyer Indemnified Parties may recover hereunder from each Seller, Other Seller Party and Trust Beneficiary shall be such party’s Pro Rata Share Cap, except for Claims based on fraud by such Seller, for which there shall be no maximum aggregate liability limitations and for Claims under the following sentence. As between the Sellers, with respect to Damages arising from a breach by a Seller of the representations and warranties found in Article IV for which the Buyer Indemnified Parties are entitled to indemnification hereunder, the breaching Seller shall be solely responsible for Damages arising therefrom and shall be responsible for one hundred percent (100%) of such Damages.
(e) If any Buyer Indemnified Party has a claim under this Article VIII, the Buyer Indemnified Parties shall be entitled to (a) demand from and ▇▇▇ to obtain relief from each Seller, Other Seller Party and Trust Beneficiary for its Pro Rata Share of such liability, (b) pursue and seek a judgment against each Seller, Other Seller Party and Trust Beneficiary (c) seek Damages and other remedies set forth herein from each Seller, Other Seller Party and Trust Beneficiary, provided, however if any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Seller, Other Seller Party or is otherwise qualified as Trust Beneficiary shall pay in full its Pro Rata Share of Damages, then the Buyer Indemnified Parties shall not be entitled to “materiality” obtain duplicate payment of those recovered amounts from any other Seller or “Other Seller Party or Trust Beneficiary. By way of example, if Buyer has a claim for $1 million under Article VIII hereof and Buyer obtains a judgment against each Seller, Other Seller Party and Trust Beneficiary in any material respect,” then for purposes of determining the total amount of Loss $1 million, then if Buyer receives payment from MNE Holdings, Inc. for which a Party its Pro Rata Share of the $1 million (equal to $58,800), then Buyer shall not be entitled to recover funds from KMK Enterprises LLC or G. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in respect of the $1 million, but Buyer shall be entitled to recover pursuant funds from each Seller and Other Seller for its Pro Rata Share of the remaining portion of the $1 million, provided that the aggregate dollar amount payable by MP Holdings LLC and its direct and indirect owners other than MNE Holdings, Inc., KMK Enterprises LLC, the G. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust and G. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in respect of the $1 million judgment will be reduced to reflect the payment of the $58,800. By way of further example, if Buyer has a claim for $1 million under Article VIII hereof and Buyer obtains a judgment against each Seller, Other Seller Party and Trust Beneficiary in the total amount of $1 million, then Buyer receives payment from MP Holdings LLC of its Pro Rata Share of the $1 million ($323,500), then Buyer shall not be entitled to further recover funds from any Other Seller Party or Trust Beneficiary which is a direct or indirect owner of MP Holdings LLC with respect to the $1 million judgment. Buyer shall be entitled to recover the remaining $676,500 of such judgment only from RM Ocean Harbor Holding, Inc. and its direct and indirect owners.
(f) If the Claiming Party receives money from any third party (including insurance carriers) with respect to a Claim as to which the Claiming Party has previously indemnified the Claiming Party, then the Claiming Party shall pay such recovery to the Indemnifying Party, less any expenses in obtaining such recovery, including reasonable attorney’s fees.
(g) The sole and exclusive remedy of a Claiming Party with respect to Claims under or otherwise relating to the transactions that are the subject of this Agreement shall be the indemnification rights set forth in this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a VIII, except with respect to any intentional breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect any covenant or materiality qualificationsobligation contained herein or Claims based on fraud.
Appears in 1 contract
Sources: Stock Purchase Agreement (Heritage Insurance Holdings, Inc.)
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."
(i) Parent Indemnified Parties shall not be entitled to indemnification under this Section 7.2 unless and until one or more claims for indemnification from the Escrow Contributors identifying Losses in excess of $100,000 in the aggregate (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 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 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, warranty or covenant of Company or a Shareholder contained in this Agreement) and for claims made by Parent and Merger Sub pursuant to the Special Escrow Claims provisions of Exhibit A attached hereto shall not exceed, in the aggregate: (a) The Representative’s liability $45,000,000 for all claims made under Section 10.01 shall be subject First Year Claims (as defined below) and (b) $33,750,000 less amounts received by Parent Indemnified Parties with respect to First Year Claims, for Second Year Claims (as defined below); provided, however, that to the following limitations: (i) the Representative shall have no liability for claims extent a Second Year Claim made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars would have been reduced by an Adjustment Amount ($5,000,000) (the “Threshold”as defined below), provided that if the later resolved First Year Claim giving rise to such Threshold is exceeded, the Representative Adjustment Amount shall be liable for all Losses starting from reduced by the first dollar of such Losses, Adjustment Amount.
(iiiv) the Representative’s Parent's and Surviving Corporation's aggregate liability for all claims under indemnifying the Shareholders pursuant to this Section 10.01 7.2 shall not exceed Fifty Million Dollars (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) $50,000,000) 45,000,000 for First Year Claims made by any Shareholders and (iiib) no item relating $33,750,000 less amounts received by the Shareholders for First Year Claims, for Second Year Claims; provided, however, that to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) the extent a Second Year Claim made by a Shareholder would have been reduced by an Adjustment Amount, the later resolved First Year Claim giving rise to such Adjustment Amount shall be reduced by the Adjustment Amount. The Shareholders shall not have any right of the contribution from Company Disclosure Schedules shall constitute a with respect to any Loss for which claimed by a Parent Indemnified Party shall be entitled after the Effective Time.
(v) Each Escrow Contributor's several liability with respect to recovery a claim for indemnification pursuant to Section 10.01. No Company Stockholder shall have 7.2(a) and with respect to any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in Special Escrow Claim which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability is payable under this Article 10.
VII (b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the after application of the Threshold and applicable limits on liability set forth in Section 7.2(c)) shall equal the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the total amount of such Loss shall be determined without limitation by payable liability times such Material Adverse Effect or materiality qualificationsEscrow Contributor's Allocable Share.
Appears in 1 contract
Sources: Merger Agreement (Realnetworks Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 indemnification obligations contained in this ARTICLE VIII shall be subject to the following limitations: :
(ia) 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 Representative shall have no liability for claims made under Section 10.01 until Tax Representation) or (y) in the aggregate event of fraud or intentional misrepresentation, unless the total amount of the 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 Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) DOH Denial Release (the “ThresholdBasket”), provided that if such Threshold is exceeded, the Representative whereupon indemnification shall be liable payable for the amount of all such Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) excess of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party Basket. For purposes of clarity, breaches of the Tax Representation shall be entitled subject to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated and included in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any calculation of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Basket.
(b) The Parent Sellers’ aggregate liability for all claims made Losses for indemnification under Section 10.02 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 following limitations: calculation of the Rep Cap.
(c) The Sellers’ aggregate liability for all indemnifiable Losses under Section 8.2 shall not exceed (i) the Parent 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 further action of the parties to the Aggregate Cash Amount (the “Aggregate Cap”). Notwithstanding anything herein to the contrary, no liability Seller shall be responsible for such claims until any Losses (including, without limitation, pursuant to Section 8.2 or Section 8.3) which exceed the aggregate amount of consideration actually received by such Seller in connection with the Losses incurred by Merger (which the parties acknowledge will decrease in the event of a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000DOH Denial Release) (the “Parent ThresholdAggregate Seller Cap”). Notwithstanding anything herein to the contrary, provided that (i) if the Aggregate Cap or the Aggregate Seller Cap is decreased as set forth in this Section 8.6(c) and a Seller has paid Losses in excess of the then current Aggregate Cap or such Parent Threshold is exceededSeller’s Aggregate Seller Cap, then the Parent shall be liable for all Losses starting from promptly return the first dollar 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 such claims 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 $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsRep Cap.
(cf) In The aggregate liability of Buyer and Parent for all Losses indemnifiable under Section 8.4 shall not exceed the event of a breach by a Party Aggregate Cap.
(g) Notwithstanding anything to the contrary in this Agreement, and without limiting the effect of any representation or warranty given or made by that Party other limitation contained in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then ARTICLE VIII, for purposes of determining computing the amount of Loss for which a any Losses incurred by any Indemnified Party shall be entitled to recover pursuant to under this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredARTICLE VIII, the amount of such Loss any Losses recoverable hereunder shall be determined without limitation reduced by an amount equal to the amount of any insurance proceeds that have been actually received by any Indemnified Party in connection with such Material Adverse Effect Losses which, had they been received prior to the recovery of Losses by the Indemnified Party from the Indemnifier would have reduced the amount of the indemnifiable Losses that would have been paid by the Indemnifier for such indemnification claim; provided, however, nothing herein shall require any Indemnified Party to seek recovery for Losses from its insurance policies (or materiality qualificationsto maintain any such insurance policies). To the extent any such insurance proceeds are received by the Indemnified Party or its applicable Affiliate or designee after any indemnification claim has been paid by the Indemnifier, the Indemnified Party shall, within 10 days following its receipt thereof, pay to the Indemnifier the applicable portion of such insurance proceeds, if any, received in connection with such indemnification claim (not to exceed the amount of Losses from such indemnification claim). Nothing in this Agreement in any way restricts or limits the 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 breach by an Indemnifier of any representation, warranty, covenant, agreement or obligation under this Agreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Ascend Wellness Holdings, Inc.)
Limitations on Indemnification. Notwithstanding anything to the contrary contained in this Agreement:
(a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative Indemnifying Parties shall have no liability for Indemnification Obligations with respect to claims made under pursuant to Section 10.01 9.2(a) until the aggregate amount of the Losses incurred by a Parent Indemnified Party Damages from such claim or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar series 505026976.1 of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) arising out of the Company Disclosure Schedules shall constitute a Loss for same or similar facts, events or circumstances exceeds $[***], at which a Parent point an Indemnified Party shall be entitled to recovery pursuant recover all Damages, subject to the other limitations in this Section 10.019.4. No Company Stockholder For the avoidance of doubt, the limitations set forth in this Section 9.4(a) shall have any liability for any not apply to claims made arising under Section 10.01 (to the extent not capable of being paid by the Representative9.2(b) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations through Section 9.2(k) or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10claims arising from Fraud.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent Indemnifying Parties shall have no liability for Indemnification Obligations with respect to claims pursuant to Section 9.2(a) until such time as the total amount of all Damages in respect of such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars (exceed $5,000,000) [***] (the “Parent ThresholdDeductible”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder aggregate, at which point an Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover all Damages above the Deductible. For the avoidance of doubt, the limitations set forth in this Section 9.4(b) shall not apply to claims arising under Section 9.2(b) through Section 9.2(k).
(c) The aggregate Indemnification Obligations of the Indemnifying Parties with respect to claims pursuant to Section 9.2(a) (in the aggregate) shall not exceed $[***]; provided, that the aggregate Indemnification Obligations with respect to any Indemnification Obligation in connection with the representations and warranties set forth in [***] shall not exceed [***] of the aggregate Merger Consideration actually paid by Buyer to all Securityholders and the COP Participants. The aggregate Indemnification Obligations of an Indemnifying Party with respect to any claim for indemnification under Section 9.2(b) through Section 9.2(k) (other than SectionSection 9.2(j)) shall not exceed the aggregate Merger Consideration actually paid by Buyer to such Indemnifying Party (it being understood that, for purposes of this Section 9.4(c), each share of Buyer Common Stock issued as Aggregate Closing Consideration or Earn-Out Consideration, as applicable, shall be valued at the Buyer Common Share Price; provided, that notwithstanding anything to the contrary herein, the above limitations shall not apply with respect to Fraud or intentional misrepresentation of a Securityholder or of the Company if a Securityholder had actual knowledge of, for which there will be no maximum liability. Except for Damages arising out of, resulting from, or in connection with Fraud, the aggregate liability of any particular Indemnifying Party for all indemnifiable claims pursuant to this Article 10 (and Agreement, including Fundamental Representations, shall be limited to such Indemnifying Party’s Stakeholder Sharing Percentage of such claim; provided, that in the application case of Fraud by or on behalf of such Indemnifying Party, or Fraud by or on behalf of the Threshold and Company for which such Indemnfying Party is responsible or has actual knowledge, such Indemnifying Party shall be responsible for the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the full amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsany Indemnification Claim related thereto.
Appears in 1 contract
Limitations on Indemnification. Except for claims arising out of Fraud, or for claims in respect of Assumed Liabilities or Excluded Liabilities:
(a) The Representative’s liability for all claims made Buyer Indemnified Parties shall not be entitled to recover any Losses under Section 10.01 shall be subject to 12.2(a)(ii) in respect of any breach of or inaccuracy in the following limitations: representations and warranties made by Seller set forth in Section 5.22(b) of this Agreement, (i) where the Representative Losses relating thereto arising from an individual breach or a series of related breaches arising out of the same facts and circumstances are less than $25,000 (each, a “Minor Claim”) and such Minor Claims shall have no liability be disregarded for claims made under Section 10.01 all purposes hereunder and (ii) until such time as the aggregate total amount of the all Losses suffered or incurred by a Parent any one or more of the Buyer Indemnified Party Parties, or Parent to which any one or more of the Buyer Indemnified Parties has or have otherwise become subject, exceeds Two Million Five Million Hundred Thousand US Dollars ($5,000,0002,500,000) (the “ThresholdDeductible”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating Buyer Indemnified Parties shall only be entitled to recover Losses exceeding the Deductible; provided, however, that the Deductible shall not apply to any breach of or inaccuracy in the fraud shall not have any limitation on its liability under representations and warranties made by Seller set forth in Section 5.1 of this Article 10Agreement.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the maximum aggregate amount of Losses that the Losses incurred by a Stockholder Indemnified Party or Stockholder Buyer Indemnified Parties exceeds shall be entitled to recover under Section 12.2(a)(ii) in respect of all breaches of or inaccuracies in the representations and warranties made by Seller set forth in Section 5.22(b) of this Agreement, collectively shall be limited to an aggregate amount of Twenty-Five Million US Dollars ($5,000,00025,000,000) (the “Parent ThresholdCap”); provided, provided however, that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (iilimitations contained in this Section 12.3(b) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from apply to any breach of or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result inaccuracy in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent representations and warranties made by Seller set forth in Section 5.1 of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsthis Agreement.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the The maximum aggregate amount of Loss for which a Party Losses that the Buyer Indemnified Parties, on the one hand, or the Seller Indemnified Parties, on the other hand, shall be entitled to recover pursuant to under this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss XII shall be determined without limitation limited to an amount equal to the Final Purchase Price. Notwithstanding anything to the contrary contained herein, (i) any Losses recoverable hereunder shall be reduced in amount by any insurance, indemnification payments, contribution payments or reimbursements actually received by any Indemnified Party in connection with such Material Adverse Effect Losses (in all such cases, net of fees, expenses, increases in insurance premiums or materiality qualifications.any other costs incurred by any Indemnified Party in order to receive any such benefits, proceeds, payments or
Appears in 1 contract
Sources: Asset Purchase Agreement (Greenbrier Companies Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made Notwithstanding Sections 9.2, 9.3, and 9.4, the rights and obligations under Section 10.01 shall be this Article IX of the JV Indemnitees, the AMD Indemnitees and the Fujitsu Indemnitees are subject to the following limitations: following:
(i) the Representative JV Indemnitees and the Fujitsu Indemnitees shall have no liability not be entitled to any recovery under Sections 9.2(a) or 9.4(a) unless the claim for claims indemnification is made within the time period of survival set forth in Section 9.1; provided, that if any claim for indemnification pursuant to this Agreement which relates to a representation or warranty is made prior to the time such representation or warranty terminates under Section 10.01 9.1, then such representation and warranty shall survive solely for purposes of such claim until such time as it has been finally resolved in accordance with the terms of this Agreement;
(ii) the JV Indemnitees shall not be entitled to any indemnification under Section 9.2(a) unless and until the aggregate amount Losses that the JV Indemnitees are entitled to be indemnified for under Section 9.2(a) of this Agreement and Section 10.2(a)(i) of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) Contribution Agreement exceed, in the aggregate, US$15 million (the “AMD Deductible”), in which event the JV Indemnitees shall be entitled to recover all such Losses, excluding Losses included in the determination of the AMD Deductible;
(iii) a Fujitsu Indemnitee shall not be entitled to any indemnification under Section 9.4 unless (A) the Loss is the result of a Third Party Claim made or threatened directly against such Fujitsu Indemnitee, or (B) if clause (A) is not applicable, Fujitsu determines in good faith that the Losses that the Fujitsu Indemnitees are entitled to be indemnified for under Section 9.4 of this Agreement and Section 10.6 of the Contribution Agreement exceed, in the aggregate, US$100 million (the “AMD Threshold”), provided that if such Threshold is exceeded, in which event the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party Fujitsu Indemnitees shall be entitled to recovery pursuant recover all such Losses, including Losses included in the determination of the AMD Threshold;
(iv) if, based upon a substantially identical underlying factual basis, (A) an arbitrator, court, tribunal or other judicial authority determines in an enforceable award, judgment or decision that AMD or an Affiliate of AMD shall make payments to, or on behalf of, the Joint Venture, and to Section 10.01. No Company Stockholder or on behalf of Fujitsu or an Affiliate of Fujitsu, in satisfaction of a breach of contract claim, indemnification claim, enforcement action or other legal or equitable claims of the Joint Venture and of Fujitsu or an Affiliate of Fujitsu (other than in each case for indemnification against a Third Party Claim), related to any Transaction Document or the transactions contemplated thereunder, and (B) AMD makes the payments in satisfaction of the claims of the Joint Venture, the amounts payable to, or on behalf of, Fujitsu or its Affiliate by AMD or its Affiliate shall have any be reduced by an amount equal to the product of (X) Fujitsu’s Membership Interest at the time of the claim of the Joint Venture multiplied by (Y) the aggregate amount paid by AMD to, or on behalf of, the Joint Venture, in satisfaction of the claim of the Joint Venture.
(v) the aggregate maximum liability of AMD to the JV Indemnitees and the Fujitsu Indemnitees, collectively, for any claims made Losses under Sections 9.2(a) and 9.4(a) of this Agreement together with Losses under Section 10.01 (to the extent not capable of being paid by the Representative10.2(a)(i) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any and 10.6(a) of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Contribution Agreement shall not have in any limitation on its liability under this Article 10event exceed US$400 million.
(b) The Parent liability parties shall make appropriate adjustments for all claims made insurance proceeds actually received (with respect to Losses) in calculating such Losses under Section 10.02 this Agreement. Any insurance proceeds actually recovered by an indemnified party to the extent relating to any Losses previously paid by an indemnifying party hereunder shall be subject paid over promptly to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent indemnifying party. All indemnification payments made pursuant to this Article IX shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsmade on an After Tax Basis.
(c) In Following the event of a breach by a Party of any representation or warranty given or made by that Party Closing, the indemnification provisions in this Agreement that is qualified so as to only be deemed breached if Article IX shall provide the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in exclusive remedy for any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredrepresentations and warranties set forth in this Agreement.
(d) Notwithstanding anything herein to the contrary, the amount limitations set forth in this Section 9.5 shall not apply to any claims arising out of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsfraud in the making of the representations and warranties set forth herein.
Appears in 1 contract
Sources: Asset Purchase Agreement (Advanced Micro Devices Inc)
Limitations on Indemnification. Notwithstanding anything in this Agreement to the contrary:
11.4.1. in no event shall Seller be liable for, or required to make any payment (aother than a Pre-Closing Expense Payment) The Representative’s liability 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 claims made under Section 10.01 such Seller Indemnifiable Damages exceeds One Million Two Hundred Fifty Thousand Dollars ($1,250,000) (such amount, the “Basket Amount”), and then only to the extent of such excess; provided, however the maximum aggregate indemnification available to the Purchaser Indemnified Parties in respect of all such breaches of representations or warranties by Seller contained herein shall be 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 Sections 5.1.1 and 5.1.12 shall not be subject to the following limitations: (i) Basket Amount or the Representative 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 have no liability Purchaser be liable for, or required to make any payment pursuant to Section 11.3.1 for claims made under Section 10.01 any Purchaser Indemnifiable Damages suffered by the Seller Indemnified Parties unless and until the aggregate dollar amount of all such Purchaser Indemnifiable Damages exceeds the Losses incurred by a Parent Indemnified Party or Parent Basket Amount, and then only to the extent of such excess; provided, however, that the maximum aggregate indemnification available to the Seller Indemnified Parties exceeds Five Million Dollars in respect of all such breaches of representations or warranties by Purchaser herein shall be a dollar amount equal to five percent ($5,000,0005%) of the Purchase Price (the “ThresholdPurchaser Cap Amount”); provided, provided further, that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar breach of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced or inaccuracy in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to representations and warranties of Purchaser set forth in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Sections 6.1 or 6.4 shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) Basket Amount or the Parent Purchaser Cap Amount.
11.4.3. Purchaser shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable look solely to the Stockholder Indemnified Party or Stockholder Indemnified Parties Escrow Fund with respect to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of any claim against Seller for a breach by a Party of or inaccuracy in any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover Seller pursuant to this Article 10 Section 11.2.1 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether other than with respect to a breach of or inaccuracy in any of the representations and warranties of Seller set forth in Sections 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 (or attempt to collect) 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 has occurredor 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 warranties of Seller set forth in Sections 5.1.1 and 5.1.12) by the delivery of a notice in the form of Exhibit Q (each such notice, a “Notice of Escrow Claim” and such claim, a “Noticed Claim”) prior to the amount Escrow Release Date. If Purchaser and Seller cannot mutually agree upon the settlement of such Loss Noticed Claim from amounts in the Escrow Fund, Purchaser shall be determined without limitation by deemed to have waived such Material Adverse Effect Noticed Claim (and any right to collect from the Escrow Fund with respect to such claim), unless Purchaser brings a court action with respect to such Noticed Claim on or materiality qualificationsprior to the date that is fifteen (15) months after the Closing Date. Nothing contained herein shall prohibit or restrict Purchaser from, or obligate Purchaser to, look to the Escrow Fund with respect to any Seller Indemnifiable Damages that does not arise from a breach or inaccuracy in any representation or warranty of Seller. In the event that Purchaser, in its sole discretion, elects to 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 inaccuracy in any representation or warranty of Seller, Purchaser and Seller shall follow the 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.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Digital Realty Trust, Inc.)
Limitations on Indemnification. (a) The Representative’s Seller shall have no liability for all claims made under Section 10.01 shall be subject 5.02(a), other than with respect to any Fundamental Representations or the following limitations: representations and warranties in Section 3.04, for any individual indemnification claim of Buyer until (i) the Representative amount of Damages under such individual indemnification claim exceeds One Hundred Thousand Dollars ($100,000), and (ii) the total amount of all Damages for all individual indemnification claims exceeding One Hundred Thousand Dollars ($100,000) indemnified thereunder exceeds a deductible (not a threshold) of one and twenty-five hundredths percent (1.25%) of the Purchase Price, and then Seller shall be liable for only the amount by which the total of such Damages exceeds such one and twenty- five hundredths percent (1.25%) deductible. Seller shall have no liability for claims made under any Damages pursuant to Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”5.02(a), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)with respect to the Fundamental Representations or the representations and warranties in Section 3.04, that exceed ten percent (10%) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Purchase Price.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything to the following limitations: (i) the Parent contrary hereunder, in no event shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the ParentSeller’s aggregate liability for all such claims shall not under this Agreement and otherwise in connection with the Contemplated Transactions exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent one hundred percent (100%) of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsPurchase Price.
(c) In The amount of any indemnification provided under Section 5.02 or 5.03 shall be net of any amounts actually recoverable by the event indemnified Person under insurance policies (net of a breach any collection costs).
(d) Notwithstanding anything stated herein to the contrary: neither Party will have any liability to the other Party or such other Party’s indemnified Persons under this Article 5 with respect to any item for which an adjustment has already been made to the Purchase Price under the terms of this Agreement.
(e) Any indemnity payments made by a Party pursuant to this Article 5 shall be treated as an adjustment to the Purchase Price for federal, state and local income tax purposes unless otherwise required by applicable Legal Requirements.
(f) To the extent of the indemnification obligations in this Agreement, Buyer and Seller hereby waive for themselves and their respective successors and assigns, including any insurers, any rights to subrogation for Damages for which such Party is liable or against which such Party indemnifies any other Person under this Agreement. If required by applicable insurance policies, each Party shall use commercially reasonable efforts to obtain a waiver of such subrogation from its insurers.
(g) Notwithstanding anything to the contrary contained in this Agreement, the Buyer Group and Seller Group shall be entitled to indemnification in accordance with this Agreement in respect of any breach of or inaccuracy in any representation or warranty given of the Seller (in the case of the Buyer Group) or the Buyer (in the case of Seller Group) notwithstanding that any member of the Buyer Group or Seller Group, as the case may be, had knowledge of such breach of or inaccuracy in such representation or warranty on or prior to the Closing Date or any investigation made by that Party in this Agreement that is qualified so such Buyer Group or Seller Group, as the case may be, prior to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsClosing Date.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability Except in the case of fraud, intentional misrepresentation or indemnification claims for all claims made breaches of or inaccuracies in the Fundamental Representations, IP Representations or Tax Representations, the Indemnified Parties may not recover any Losses pursuant to an indemnification claim under Section 10.01 shall be subject to the following limitations: (i9.2(a)(i) the Representative shall have no liability for claims made under Section 10.01 unless and until the aggregate amount of the indemnifiable Losses incurred by a Parent Indemnified Party thereunder exceeds $25,000 with respect to such individual claim or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) series of related claims, (the “Per Claim Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating Indemnified Parties shall be entitled to recover all Losses, including the Per Claim Threshold, paid, incurred, suffered or sustained by the Indemnified Parties. For the avoidance of doubt, the limitations set forth in the fraud this Section 9.3(a) shall not have any limitation on its liability apply to indemnification claims under this Article 10clauses (ii) – (ix) of Section 9.2(a), inclusive.
(b) The Parent Subject to Section 9.3(c), the Indemnifying Parties’ aggregate liability for all claims made under indemnification obligations set forth in Section 10.02 9.2(a) shall be subject to not exceed the following limitations: (i) Indemnity Escrow Amount and the Parent shall have no liability Indemnified Parties’ sole and exclusive source of recovery for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000under Section 9.2(a) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable recourse against the cash held in the Indemnity Escrow Fund; provided, however, that, for all Losses starting the avoidance of doubt, Buyer shall be permitted to recover any Negative Adjustment Amount from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable Adjustment Escrow Fund pursuant to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent terms of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsSection 1.4.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party Nothing in this Agreement shall limit the liability of, or the Indemnified Parties’ remedies against, any Person who perpetrates, or who has actual knowledge of, fraud in relation to the transactions contemplated hereby.
(d) Notwithstanding any other provision of this Agreement to the contrary, the indemnification rights set forth in this Article IX and recourse against the Indemnity Insurance Policy shall be the sole and exclusive remedy of the Indemnified Parties from and after the Effective Time for monetary damages in connection with the matters described in Section 9.2(a) (which means that is qualified so as the survival periods and liability limits set forth in this Article IX shall control notwithstanding any statutory or common law provisions or principles to only the contrary); provided, however, that nothing in this Agreement shall limit the Indemnified Parties’ ability to pursue (i) specific performance or injunctive relief or other non-monetary equitable remedies (excluding the doctrine of equitable indemnification), (ii) remedies under any Related Agreements (other than the certificates and documents to be deemed breached if delivered by the representation would have a Material Adverse Effect on a Party Company pursuant to Section 2.2(b)(xiv)) against the parties thereto, and (ii) remedies against any Person who perpetrates, or is otherwise qualified as who has actual knowledge of, fraud in relation to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party transactions contemplated hereby.
(e) The Indemnified Parties shall be entitled to recover indemnifiable Losses from the following sources and in the following order:
(i) first, from the amounts then remaining in the Indemnity Escrow Fund; and
(ii) second, from and under the Indemnity Insurance Policy.
(f) To the extent the Indemnified Parties are entitled to recover indemnifiable Losses in respect of amounts which are indemnifiable pursuant to Section 2.5 by a particular Person who had received amounts pursuant to this Agreement, Buyer shall first use reasonable best efforts to recover such indemnifiable Losses from such Person prior to seeking recourse against the Escrow Fund pursuant to the terms of this Article 10 IX.
(g) The amount of any Losses recoverable by any Indemnified Party under Section 9.2(a) shall be calculated net of any insurance proceeds actually received by, and/or any indemnification or contribution payments actually paid by any third party to, such Indemnified Party in respect of such Losses in, each case net all costs of recovery, including without limitation reasonably anticipated increases in insurance premiums; provided, however, that in no event shall any Indemnified Party be required to seek or obtain any such insurance proceeds or third party indemnification or contribution. If an Indemnified Party receives any amounts under applicable insurance policies or third party indemnification or contribution payments subsequent to its receipt of an indemnification payment by the Indemnifying Parties (including from the Indemnity Escrow Fund), then such Indemnified Party will, without duplication, promptly reimburse the Indemnifying Parties (including via replenishing the Indemnity Escrow Fund, if applicable) for any payment made by such Indemnifying Parties up to the amount received by the Indemnified Party; provided, that the aggregate amount of reimbursement payments to the Indemnifying Parties will not in any event exceed the aggregate indemnification payment received by the Indemnified Party from the Indemnifying Parties. For clarity, nothing in this Section 9.3(g) will be deemed to prejudice the ability of any Indemnified Party to seek recourse against the Indemnity Escrow Fund and/or Indemnity Insurance Policy at any time according to the other terms and conditions of this Article IX, but rather this Section 9.3(g) is intended solely to prevent multiple recoveries by any Indemnified Party for the application same Losses.
(h) Notwithstanding any other provision of this Agreement, the Indemnifying Parties shall not have any liability or indemnification obligation for any Taxes of the Threshold and Company or any Subsidiary (i) resulting from any action taken by the Parent Threshold) and not for purposes of determining whether a breach Company after the Closing on the Closing Date outside of the representation has occurredordinary course of business, or (ii) the ability of Buyer, the amount Surviving Corporation or any of their Affiliates to utilize any Tax asset or attribute (e.g., net operating loss carryforward or Tax credit carryforward) in any Tax period or portion thereof (including any Straddle Tax Period) beginning on or after the Closing Date.
(i) Any claim for indemnification under Article IX, and any offer to compromise or settle such Loss claim, must be made on a pro rata basis to all Indemnifying Parties (based on their respective Pro Rata Portions).
(j) Any liability for indemnification under this Article IX shall be determined without limitation duplication of recovery by reason of the state of facts giving rise to such Material Adverse Effect liability constituting a breach or materiality qualificationsother violation of more than one representation, warranty, covenant, agreement, certificate or certification. In addition, if and solely to the extent that an amount of Losses in connection with an indemnifiable matter was already taken into account in connection with calculation of the Final Total Closing Consideration, the same amount of such Losses may not be recovered under this Article IX.
(k) Notwithstanding any other provision of this Agreement, in no event will any Indemnifying Party be liable for any other Indemnifying Party’s breach of such other Indemnifying Party’s representations, warranties, covenants, or agreements contained in any Holdback Agreement, Joinder Agreement, Non-Competition and Non-Solicitation Agreements or other ancillary agreement hereto to which such other Indemnifying Party is a party.
Appears in 1 contract
Sources: Merger Agreement (F5 Networks Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made Indemnitors shall only be required to indemnify the OP Indemnified Parties under Section 10.01 shall be subject 2.2 with respect to OP Claims for which the OP Indemnified Parties have provided written notice to the following limitations: Indemnitors, setting forth therein in reasonable detail the basis for such OP Claims, on or prior to the one (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount 1)-year anniversary of the Losses incurred by a Parent Indemnified Party or Parent Closing; provided, however, that, in the event that the OP Indemnified Parties exceeds Five Million Dollars notify the Indemnitors with respect to any OP Claim on or prior to the one ($5,000,000) 1)-year anniversary of the Closing, then any such OP Claim shall survive until resolved in accordance with the terms and conditions of this Agreement (the “ThresholdIndemnification Period”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability provisions for all claims made under indemnification contained in Section 10.02 2.2 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until effective only if the aggregate amount of all Damages for all OP Claims exceeds one percent (1%) of the Losses incurred Aggregate Value (it being understood and agreed that such one percent (1%) of the Aggregate Value shall then be recoverable, together with all other Damages for OP Claims under Section 2.2 in excess thereof, by a Stockholder Indemnified Party or Stockholder the OP Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable subject to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsother limitations in this Agreement).
(c) In no event shall the aggregate amount of Damages for which the Indemnitors are liable pursuant to Section 2.2 exceed fifteen percent (15%) of the Aggregate Value. In addition, in no event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining shall the amount of Loss Damages for which a any individual Indemnitor is liable pursuant to Section 2.2 exceed fifteen percent (15%) of the Aggregate Value received by such individual Indemnitor (i) under the Eola Contribution Agreement, or (ii) through any distribution (directly or indirectly) to such Indemnitor of any OP Units and/or Common Shares by any Contributor (or direct or indirect owner thereof). Notwithstanding anything contained herein to the contrary, the OP Indemnified Parties shall look first to available insurance proceeds (including without limitation any title insurance proceeds, if applicable), and then to the OP Units and/or Common Shares pledged by the Indemnitors pursuant to the terms of the Pledge Agreement for indemnification under this Article 2. Following the Closing and the issuance of Common Shares and/or OP Units to the applicable Indemnitors, no OP Indemnified Party shall be entitled have recourse to recover any other assets of the Indemnitors other than the Common Shares and/or OP Units pledged pursuant to this Article 10 the Pledge Agreement. The parties hereto acknowledge and agree that the Collateral (and as defined in the application Pledge Agreement) pledged by each Indemnitor pursuant to the terms of the Threshold and Pledge Agreement shall be released to satisfy the Parent Threshold) and not for obligations under this Agreement on a pro rata basis from each Indemnitor based on each such Indemnitor’s then-applicable Pro Rata Share. For purposes of determining whether a breach the foregoing, each Indemnitor’s “Pro Rata Share” is determined, at the time of each release of the representation has occurredCollateral, by dividing (i) the amount then-current value of such Loss shall be determined without limitation Indemnitor’s Collateral that has not already been released to obligations under this Agreement, by such Material Adverse Effect or materiality qualifications(ii) the then-current aggregate value of all Collateral that has not already been released to satisfy obligations under this Agreement.
Appears in 1 contract
Sources: Representation and Warranty Indemnification Agreement (Eola Property Trust)
Limitations on Indemnification. 11.6.1. Other than any breach of or inaccuracy in any Fundamental Representation, indemnification for which shall be as provided below, no Indemnifying Party shall be required to indemnify an Indemnified Party hereunder for any Losses pursuant to Section 11.2.1 or 11.3.1, as applicable (asuch Losses pursuant to Section 11.2.1 or 11.3.1, as applicable, being collectively referred to herein as “General Representation and Warranty Losses”) The Representative’s liability except to the extent that the aggregate amount of such General Representation and Warranty Losses for which the Indemnified Party is otherwise entitled to indemnification pursuant to this Article 11 exceeds Forty Thousand Dollars ($40,000), in which event the Indemnifying Party shall be required to pay or be liable for all claims made under Section 10.01 such General Representation and Warranty Losses from the first dollar. Except as otherwise provided herein, all Losses (including, but not limited to, any Losses related to or arising directly or indirectly out of any breach of or any inaccuracy in any Fundamental Representation) other than General Representation and Warranty Losses (all such Losses being collectively referred to herein as “Purchase-Price Limited-Losses”) shall be indemnified in their entirety from first dollar by the Indemnifying Parties and shall not be subject to the following limitations: (i) the Representative shall have no liability for claims made under limitations set forth in this Section 10.01 until the 11.6.
11.6.2. The aggregate amount payable by all Indemnifying Parties in respect of the General Representation and Warranty Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds shall not exceed an amount equal to One Million Sixty-Two Thousand Five Million Hundred Dollars ($5,000,0001,062,500) (the “ThresholdGeneral Representation and Warranty Cap”).
11.6.3. Any indemnification payment made pursuant to Article 11 of this Agreement shall be treated as an adjustment to the Purchase Price for tax purposes.
11.6.4. The aggregate amount payable by all Indemnifying Parties in respect of any Purchase-Price Limited-Loss shall not exceed an amount equal to the Purchase Price, provided that if less amounts previously paid or to be paid by such Threshold is exceeded, the Representative Indemnifying Party pursuant to this Article 11.
11.6.5. No Indemnifying Party shall be liable for all any General Representation and Warranty Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating pursuant to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery this pursuant to Section 10.01. No Company Stockholder shall have any liability 11.2.1 or 11.3.1 unless a written claim for any claims made under Section 10.01 (indemnification in accordance with this Article 11 is given by the Indemnified Party to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations Indemnifying Party with respect thereto on or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject prior to the date that is fifteen (15) months following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000Closing Date; except that this time limitation shall not apply to any Losses resulting from related to or arising directly or indirectly out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so Purchase-Price Limited-Losses, as to only be deemed breached if which in each case the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes applicable statute of determining the amount of Loss for which a Party limitations plus sixty (60) days shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsapply.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary in this Agreement, Seller shall not be liable to the Purchaser Indemnified Parties (i) the Representative shall have no liability for claims made under Section 10.01 in respect of any Damages incurred or suffered by such Purchaser Indemnified Party that is not a Qualifying Loss, and (ii) until such time as the aggregate amount of all Qualifying Losses of the Losses incurred by a Parent Indemnified Party or Parent Purchaser Indemnified Parties exceeds Five Million Dollars (an amount equal to $5,000,000) (100,000, and then only for such portion of the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for aggregate amount of all Qualifying Losses starting from the first dollar of such Losses, (ii) the Representative’s in excess thereof. The aggregate liability for all claims of Seller under Section 10.01 this Agreement shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 103,000,000.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything to the following limitations: contrary in this Agreement, Purchaser shall not be liable to the Seller Indemnified Parties (i) the Parent shall have no liability for in respect of any Damages incurred or suffered by such claims Seller Indemnified Party that is not a Qualifying Loss, and (ii) until such time as the aggregate amount of all Qualifying Losses of the Losses incurred by a Stockholder Indemnified Party or Stockholder Seller Indemnified Parties exceeds Five Million Dollars (an aggregate amount equal to $5,000,000) (100,000, and then only for such portion of the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for aggregate amount of all Qualifying Losses starting from the first dollar of such Losses and (ii) the Parent’s in excess thereof. The aggregate liability of Purchaser in respect of claims for all such claims indemnification for breaches or inaccuracies of any representation or warranty of Purchaser that is not a Fundamental Representation shall not exceed $35,000,000; except that Losses resulting from or arising out 1,000,000. The aggregate liability of any fraudulent misrepresentations or fraudulent action by the Parent Purchaser in respect of claims for indemnification under Sections 10.2(b)(i) and 10.2(b)(ii) shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsnot exceed $3,000,000.
(c) In With respect to each indemnification obligation in this Agreement:
(i) each such obligation shall be calculated net of any Tax benefit actually realized; (ii) all Damages shall be net of any Eligible Insurance Proceeds; and (iii) IN NO EVENT SHALL AN INDEMNIFYING PARTY HAVE LIABILITY TO THE INDEMNIFIED PARTY FOR ANY 33 CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, LOST PROFITS OR INCOME, LOSS OF BUSINESS REPUTATION, EXEMPLARY OR SPECIAL DAMAGES, ANY DAMAGES BASED UPON ANY TYPE OF MULTIPLE OR DIMINUTION IN VALUE, OR OTHER SIMILAR ITEMS.
(d) If any portion of Damages to be reimbursed by the event Indemnifying Party may be covered, in whole or in part, by third-party insurance coverage, the Indemnified Party shall promptly give notice thereof to the Indemnifying Party (a “Notice of Insurance”). If the Indemnifying Party so requests within 180 days after receipt of a breach Notice of Insurance, the Indemnified Party shall use its commercially reasonable efforts to collect the maximum amount of insurance proceeds thereunder, in which event all such proceeds actually received, net of costs reasonably incurred by a Party of any representation or warranty given or made by that the Indemnified Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party seeking such collection, shall be entitled to recover considered “Eligible Insurance Proceeds”. Any amount payable by an Indemnifying Party pursuant to this Article 10 shall be paid promptly and payment shall not be delayed pending any determination of Eligible Insurance Proceeds. In any case where an Indemnified Party recovers from a Third Party any Eligible Insurance Proceeds and/or any other amount in respect of any Damages for which an Indemnifying Party has actually reimbursed such Indemnified Party pursuant to this Article 10, such Indemnified Party shall promptly pay over to the Indemnifying Party such Eligible Insurance Proceeds and/or the amount so recovered (after deducting therefrom the amount of expenses incurred by it in procuring such recovery), but not in excess of the sum of (i) any amount previously paid by the Indemnifying Party to or on behalf of the Indemnified Party in respect of such claim and (ii) any amount expended by the Indemnifying Party in pursuing or defending any claim arising out of such matter.
(e) Any Indemnified Party shall take all commercially reasonable steps to mitigate any Damages incurred by such party upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any indemnification rights hereunder.
(f) If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 10.2(a) or Section 10.2(b) and the application Indemnified Party could have recovered all or a part of such Damages from a Third Party (a “Potential Contributor”) based on the Threshold and underlying claim asserted against the Parent Threshold) and not for purposes Indemnifying Party, the Indemnified Party shall assign such of determining whether a breach of its rights to proceed against the representation has occurred, Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such Loss payment.
(g) Any indemnity payment made hereunder shall be treated by Seller and Purchaser as an adjustment to the Settlement Amount.
(h) Any liability for any Damages shall be determined without limitation duplication of recovery by reason of the state of facts giving rise to such Material Adverse Effect Damages constituting a breach of more than one representation, warranty, covenant or materiality qualificationsagreement of this Agreement.
Appears in 1 contract
Sources: Purchase and Assumption Agreement
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative Diageo Indemnifying Parties shall have no liability for claims made under indemnification pursuant to clause (i) of Section 10.01 until 9.2(a) with respect to Covered Losses for which indemnification is provided thereunder, unless such Covered Losses exceed in the aggregate amount of $100 million, in which case the Losses incurred by a Parent Indemnified Party or Parent Indemnified Diageo Indemnifying Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all such Covered Losses starting from the first dollar in excess of such Lossesamount; provided, (ii) that the Representative’s aggregate Diageo Indemnifying Parties shall have no liability for all such Covered Losses (and such Covered Losses will not be aggregated for purposes of such $100 million) in connection with any individual claim or series of related claims under Section 10.01 shall not exceed Fifty Million Dollars (unless the aggregate amount of Covered Losses associated with such claim or series of related claims exceeds $50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 105 million.
(b) The Parent General Mills Indemnifying Parties shall have no liability for all claims made under Section 10.02 shall be subject indemnificatio▇ ▇▇▇suant to the following limitations: clause (i) of Section 9.3(a) with respect to Covered Losses for which in- demnification is provided thereunder, unless such Covered Losses exceed in the Parent aggregate $100 million, in which case the General Mills Indemnifying Parties shall be liable for all such Covered Losse▇ ▇▇ excess of such amount; provided, that the General Mills Indemnifying Parties shall have no liability for such Covered L▇▇▇▇▇ (and such Covered Losses will not be aggregated for purposes of such $100 million) in connection with any individual claim or any series of related claims until unless the aggregate amount of the Covered Losses incurred by a Stockholder Indemnified Party associated with such claim or Stockholder Indemnified Parties series of related claims exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions5 million.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Sources: Merger Agreement (Diageo PLC)
Limitations on Indemnification. (a) The Representative’s liability No Claim for all claims made under Section 10.01 breach of a representation or warranty shall be subject made unless written notice thereof shall have been given by the Indemnified Party to the following limitations: Indemnitor within one (i1) year from the Representative date of the Closing. No Claim for a breach of a covenant or agreement to be performed prior to or at the Closing shall be made unless written notice thereof shall have no liability for claims made under Section 10.01 until been given by the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by Indemnitor within six (6) months after the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Closing.
(b) The Parent liability An Indemnitor shall be required to indemnify, defend and hold harmless an Indemnified Party with respect to Indemnified Losses incurred by such Indemnified Party arising or resulting from a breach of or inaccuracy in any representation or warranty other than those contained in Sections 4.01 through 4.06, 4.24, 5.01 through 5.06 and 5.12 only: (i) if the amount of Indemnified Losses from an individual Claim is equal to or greater than $5,000.00, and (ii) to the extent that the aggregate amount of all Indemnified Losses, for all claims made under Section 10.02 Claims which satisfy the preceding clause (i) exceeds $10,000.00, in which case only the excess over $10,000.00 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsindemnification.
(c) In Absent fraud, the event total aggregate liability of a breach by a Party the Sellers for all breaches of any representation or warranty given or made of the provisions of this Agreement shall not exceed $1,000,000.00. The total aggregate liability of Purchaser for all breaches of any of the provisions of this Agreement shall not exceed $1,000,000.00.
(d) Any indemnity payment payable pursuant to this Agreement shall be decreased to the extent of any insurance proceeds received by that the Indemnified Party in this Agreement that respect of the Indemnified Losses giving rise to such indemnity payment.
(e) If the amount with respect to which any Claim is qualified so as made gives rise to only a currently realizable direct Tax Benefit to the party making the Claim, the indemnity payment shall be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining reduced by the amount of Loss for the Tax Benefit available to the Indemnified Party making the Claim. To the extent such Claim does not give rise to a currently realizable direct Tax Benefit, but if the amount with respect to which such Claim is made gives rise to a subsequently realized Tax Benefit to the Indemnified Party that made the Claim, such Indemnified Party shall be entitled refund to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, Indemnitor the amount of such Loss Tax Benefit when, as and if realized. For the purposes of this Agreement, any subsequently realized Tax Benefit shall be determined treated as though it was a reduction in the amount of the initial Claim; provided, however, no subsequently realized Tax Benefit shall require a payment to the Indemnitor merely because such Tax Benefit exceeds the initial Claim. For purposes of this Section 11.04(e), a "Tax Benefit" means an amount by which the tax liability of the Indemnified Party (or group of corporations including the Indemnified Party) is reduced within one year of making the Claim (including, without limitation limitation, by such Material Adverse Effect deduction, reduction of income, by virtue of increased tax basis or materiality qualificationsotherwise, entitlement to refund, credit or otherwise) plus any related interest received from the relevant taxing authority. Where an Indemnified Party has other losses, deductions, credits or items available to it, the Tax Benefit from any losses, deductions, credits or items relating to the Claim shall be deemed to be realized proportionately with any other losses, deductions, credits or items. For purposes of this Section 11.04(e), a Tax Benefit is "currently realizable" to the extent it can in fact be realized in the current taxable period or year or in any tax return with respect thereto (including through a carryback to a prior taxable period) or in any taxable period or year prior to the date of the Claim. In the event that there should be a determination disallowing the Tax Benefit, the Indemnitor shall be liable to refund to the Indemnified Party the amount of any related reduction previously allowed or payments previously made to the Indemnitor pursuant to this Section 11.04(e). The amount of the refunded reduction or payment shall be deemed a payment under this Section 11.04(e) and thus shall be paid subject to any applicable reductions under this Section 11.04(e).
(f) The parties agree that any indemnification payments made by Purchaser or Sellers pursuant to this Agreement shall be treated for tax purposes as an adjustment to the consideration unless otherwise required by applicable Law.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitationscontrary contained in this Agreement: (i) except in respect of the Representative Landos Fundamental Representations and the Stockholder and Buyer Transferee Fundamental Representations, as applicable, no indemnification shall have no liability for claims made be available under Section 10.01 until the aggregate amount 5.1(a), Section 5.2(a) or Section 5.3(a) for any individual claim or series of the related claims based on a similar set of operative facts (1) unless such claim or series of related claims is for indemnifiable Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) greater than [***] (the “ThresholdDe Minimis Amount”), provided that if such Threshold is exceeded, ) in which case the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability recover for any all such indemnifiable Losses in connection with such claim or series of related claims made (including the De Minimis Amount), and (2) unless and until the aggregate amount of indemnifiable Losses under Section 10.01 5.1(a), Section 5.2(a) or Section 5.3(a), as applicable, equals or exceeds [***] (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company“General Deductible”), in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to for all such indemnifiable Losses in excess of the amount of (but not inclusive of) the General Deductible; and (ii) no indemnification shall be available under Section 5.1(a), Section 5.2(a) or Section 5.3(a) (1) in excess of [***] other than in respect of the Landos Fundamental Representations and Stockholder and Buyer Transferee Fundamental Representations, as applicable, and (2) in respect of the Landos Fundamental Representations or the Stockholder and Buyer Transferee Fundamental Representations, as applicable, in excess of [***].
(b) If an Indemnifying Party has indemnified any Indemnified Party under this Article 10 V for any Losses that are actually recovered by the Indemnified Party under any policies of insurance (net of documented associated expenses and costs of recovery to the application extent arising out of, related to or resulting from the relevant Losses), then the Indemnified Party will promptly reimburse the Indemnifying Party in the event of recovery by such Indemnified Party under any such insurance policy subsequent to any indemnification payment hereunder with respect thereto. For purposes of calculating the Threshold and the Parent Threshold) and not amount of Loss incurred by an Indemnified Party for purposes of determining whether a breach of the representation has occurred, this Agreement there shall be deducted an amount equal to the amount of such Loss shall be determined without limitation any other indemnification payments, contribution payments, reimbursements or refunds that are received by such Material Adverse Effect Indemnified Party or materiality qualificationsany of such Indemnified Party’s Affiliates in connection with such Losses or the circumstances giving rise thereto. Each Indemnified Party shall use commercially reasonable efforts to mitigate any Losses, which in the absence of mitigation might give rise to or increase Losses in respect of any claim under this Article V. In no event will multiple recovery for any Losses be allowed.
Appears in 1 contract
Sources: Asset Purchase and Redemption Agreement (Landos Biopharma, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made Except in the case of Fraud, the Indemnified Parties, as a group, may not recover any Losses pursuant to an indemnification claim under Section 10.01 8.2(a)(i) (i) unless and until the Indemnified Parties, as a group, shall have paid, incurred, suffered or sustained at least $900,000 in Losses in the aggregate (the “Threshold Amount”), at which time the Indemnified Parties shall be subject indemnified dollar-for-dollar for the full amount of all indemnifiable Losses paid, incurred, suffered or sustained by the Indemnified Parties in excess of the Threshold Amount or (ii) for any individual item (or series of related items arising from the same or substantially similar facts or circumstances) where the Loss relating to such claim (or series of claims arising from the same or substantially similar facts or circumstances) is less than $10,000 and such individual items (or series of related items) will not count toward determining whether or not the Threshold Amount has been reached.
(b) Subject to Section 8.3(d), except in the case of Fraud, the Company Indemnitors’ indemnity obligations for Losses under Sections 8.2(a) will be limited, in the aggregate, to an amount equal to the following limitationsIndemnity Escrow Amount, less any amounts previously paid out of the Indemnity Escrow Amount to satisfy the Losses claimed under Sections 8.2(a) (the “Cap”).
(c) Subject to Section 8.3(d) and except in the case of Fraud, the Indemnified Parties’ sole and exclusive sources of recovery for indemnification claims under Section 8.2 shall be recourse against the Indemnity Escrow Amount.
(d) Subject to the limitations set forth in Section 8.3, the Indemnified Parties shall (i) be entitled to bring indemnification claims directly against the Company Stockholders in their roles as Company Indemnitors and (ii) be permitted to recover Losses directly from the Company Stockholders for indemnification claims pursuant to Sections 8.2(a) only with respect to claims for Fraud, if and only to the extent that the Indemnity Escrow Amount is no longer available, it being agreed that the Indemnified Parties shall look first to the Indemnity Escrow Amount.
(e) Any amount of Losses will be calculated: (i) without regard to any punitive, exemplary, special, incidental, or consequential damages unless any such punitive, exemplary, special, incidental, or consequential damages are actually awarded to a third party (provided that all such anticipated Losses may be preliminarily included by an Indemnified Party in an Indemnification Claim Notice); (ii) such that reasonable and documented costs and expenses incurred in investigating, defending or resolving any applicable claim under this Article VIII shall constitute Losses if and solely to the Representative extent that such underlying claim is indemnifiable hereunder; and (iii) with respect to Losses incurred in respect of any representation in Section 3.15, only to the extent in excess of the amount of such Taxes that were included in the Estimated Closing Statement, and excluding such Taxes to the extent such Taxes were included in the Post-Closing Statement and actually reduced the Total Merger Consideration.
(f) With respect to each claim for indemnification hereunder, Parent shall have no liability use commercially reasonable efforts to assert all claims under all applicable insurance policies, and the amount of any Losses that are subject to indemnification under this Article VIII shall be calculated net of the amount of any insurance proceeds, indemnification payments or reimbursements actually received by the Indemnified Parties from third parties (other than the Company Indemnitors) in respect of such Losses (net of any costs or expenses incurred in obtaining such insurance, indemnification or reimbursement, including any increases in insurance premiums or retro-premium adjustments resulting from such recovery) and net of any Tax benefits actually realized or that may be realized by the Parent or any of its Affiliates in connection with the Loss (net of any costs or expenses incurred in obtaining such Tax benefit) in the taxable year in which the Loss is incurred or within the immediately following taxable year. In the event that an insurance recovery is received by any Indemnified Party with respect to any Losses for claims made under Section 10.01 until which any such Person has been indemnified and which Losses such Person had received from the Company Indemnitors hereunder, then a refund equal to the aggregate amount of the recovery (net of costs and expenses incurred in recovering such amounts, and net of any resulting insurance premiums with respect to insurance policies) payable in respect of Company Capital Stock and Company Warrants shall be made to the Payment Agent for distribution to the applicable Company Indemnitors, in each case, in accordance with each such Company Indemnitor’s respective Pro Rata Portion.
(g) Any Losses incurred by for indemnification under this Agreement shall be determined without duplication of recovery due to the facts giving rise to such Losses constituting a Parent Indemnified Party breach of more than one representation, warranty, covenant or Parent Indemnified Parties exceeds Five Million Dollars agreement, or being indemnifiable pursuant to more than one clause of Section 8.2(a).
($5,000,000h) (the “Threshold”), provided that if such Threshold is exceededNotwithstanding any other provision of this Agreement, the Representative Company Indemnitors shall be liable not have any Liability or indemnification obligation for all Losses starting any Taxes of the Company or its Subsidiaries (i) resulting from any election made under Section 338 or 336(e) of the first dollar of such LossesCode with respect to the Merger, (ii) resulting from any action taken by the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and Company at the direction of Parent on the Closing Date after the Closing outside of the ordinary course of business or (iii) no item relating the ability of Parent, the Surviving Corporation or any of their Affiliates to Taxes that is referenced in Schedule 4.10 (utilize any net operating losses, Tax credits, Tax basis, or other than Schedule 4.10(b)) Tax attribute of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “Subsidiaries in any material respect,” then for purposes of determining Tax period or portion thereof (including any Straddle Tax Period) beginning on or after the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsClosing Date.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability Purchaser 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) unless the aggregate Losses for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars (such breaches exceed $5,000,000) 562,500 (the “ThresholdDeductible”), provided that if such Threshold is exceeded, ) (following which the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party Purchaser Indemnitees shall be entitled to recovery pursuant indemnification for any Losses in excess of the Deductible, subject to Section 10.018.4(b) and the other terms and provisions of this Article VIII). No Company Stockholder The Seller Indemnitees shall have not be entitled to recover indemnifiable Losses under Section 8.2(b)(i) (other than in connection with any liability breach of the Purchaser Fundamental Representations or claims based upon Fraud) unless the aggregate Losses for all such breaches exceed the Deductible (following which the Seller Indemnitees shall be entitled to recover indemnification for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated Losses in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any excess of the parties referred Deductible, subject to in Section 8.4(c) and the definition other terms and provisions of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10VIII).
(b) The Parent liability for all claims made Purchaser Indemnitees shall not be entitled to recover indemnifiable Losses under Section 10.02 shall be subject 8.2(a)(i) (other than in connection with any breach of the Seller Fundamental Representations or claims based upon Fraud) to the following limitations: (i) extent that such Losses exceed the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) Indemnity Escrow Amount (the “Parent ThresholdSeller Non-Fundamental Reps Cap”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party The Seller Indemnitees shall not be entitled to recover pursuant to this Article 10 indemnifiable Losses under Section 8.2(b)(i) (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a other than in connection with any breach of the representation has occurredPurchaser Fundamental Representations or claims based upon Fraud) to the extent that such Losses exceed $562,500.
(d) In no event shall Seller have aggregate indemnification liability under Section 8.2(a) in excess of $201,600,000 (the “Total Cap Amount”); provided, however, that the amount foregoing limitation will not apply in connection with any claims based upon Fraud. In no event shall Purchaser have indemnification liability under Section 8.2(b) in excess of such Loss shall be determined without the Total Cap Amount; provided, however, that the foregoing limitation by such Material Adverse Effect or materiality qualificationswill not apply in connection with any claims based upon Fraud.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Atlanticus Holdings Corp)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Sellers shall not be required to make any indemnification payment pursuant to Section 10.01 shall be subject 8.2(a) or with respect to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount any breach by any Seller Party of the Losses incurred by covenant contained in the second sentence of Section 5.8(c) for any individual failure of a Parent Indemnified Party representation or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) warranty to be true and correct where the Loss relating to such individual failure is less than JPY5,000,000 (the “Per Claim Threshold”), provided . Losses relating to separate claims that if such arise from an individual failure of a representation or warranty to be true and correct will be aggregated for purposes of determining whether the Per Claim Threshold is exceeded, satisfied if the Representative shall be liable for all Losses starting separate claims arise from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations same or the taking of fraudulent actions by the Company substantially similar facts or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10circumstances.
(b) The Parent liability for 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 claims made under Section 10.02 shall 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 subject available to the following limitations: (i) the Parent shall have no liability for Purchaser Indemnitees pursuant to such claims until the section, exceeds an aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) JPY500,000,000 (the “Parent ThresholdDeductible Amount”), provided except that if such Parent Threshold is 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 Parent Purchaser Indemnitees shall be liable for entitled to be indemnified against all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent excess of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsDeductible Amount.
(c) In The maximum amount of indemnifiable Losses that may be recovered by the event of a Purchaser Indemnitees from the Sellers with respect to the matters described in Section 8.2(a) and with respect to any breach by a any Seller Party of any representation or warranty given or made by that Party the covenant contained in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes second sentence of determining the amount of Loss for which a Party Section 5.8(c) shall be entitled an aggregate amount equal to recover pursuant to this Article 10 the Indemnification Holdback Amount.
(and d) The limitations on the application indemnification obligations of the Threshold and the Parent ThresholdSellers set forth in Sections 8.3(a), 8.3(b) and 8.3(c) do not for purposes of determining whether a apply to any Losses arising from any matter described in Sections 8.2(b) (other than any breach of the representation has occurredcovenant 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 amount same Losses from multiple Sellers.
(g) Notwithstanding anything to the contrary in this Agreement, with respect to the representations and warranties made by any Seller pursuant to Section 3.1 (or any certification to the extent related to any such representations and warranties), each Seller shall solely indemnify the Purchaser Indemnitees against Losses that are incurred by any of the Purchaser Indemnitees and that arise from such Seller’s breach of such Loss representations and warranties (and not with respect to the representations and warranties of any other Seller pursuant to Section 3.1 (or any certification to the extent 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 warranties made by the Sellers pursuant to Section 3.1 (or any certification to the extent related to any such representations and warranties), each Seller’s liability shall be determined without limitation by such Material Adverse Effect or materiality qualificationsseveral and not joint, and the liability of the Sellers therefor shall be apportioned among the Sellers pro rata in proportion to the Sellers’ respective Holdback Percentages.
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Limitations on Indemnification. Indemnification under Sections 5.1(a) and 5.2(a) for inaccurate representations and warranties (each a "Misrepresentation Indemnification") shall be limited as provided in this Section 5.4:
(a) The Representative’s liability for all claims made under Section 10.01 shall be subject to Except in the following limitations: case of fraud or intentional misrepresentation, (i) the Representative shall have no liability for claims made Indemnifiable Costs may be recovered by Buyer Indemnified Parties pursuant to any Misrepresentation Indemnification under Section 10.01 5.1(a) until the an aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”)50,000 of Indemnifiable Costs have been realized, provided that if such Threshold is exceededbut once achieved, the Representative shall then all Indemnifiable Costs may be liable for all Losses starting from the first dollar of such Lossesrecovered, and (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) total amount of Indemnifiable Costs which the Company Disclosure Schedules shall constitute a Loss for which a Parent Buyer Indemnified Party shall Parties may be entitled to recovery be indemnified against pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made all Misrepresentation Indemnifications under Section 10.01 (5.1(a) shall be limited in the aggregate to an amount equal to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Consulting Fee.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to Except in the following limitations: case of fraud or intentional misrepresentation, (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred Indemnifiable Costs may be recovered by a Stockholder Indemnified Party or Stockholder Seller Indemnified Parties exceeds Five Million Dollars (pursuant to any Misrepresentation Indemnifications under Section 5.2(a) until an aggregate of $5,000,000) (the “Parent Threshold”)50,000 of Indemnifiable Costs have been realized, provided that if such Parent Threshold is exceededbut once achieved, the Parent shall then all Indemnifiable Costs may be liable for all Losses starting from the first dollar of such Losses recovered, and (ii) the Parent’s aggregate liability for total amount of Indemnifiable Costs which the Seller Indemnified Parties may be entitled to be indemnified against pursuant to all such claims Misrepresentation Indemnifications under Section 5.2(a) shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result be limited in the Parent being liable aggregate to an amount equal to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsConsulting Fee.
(c) In None of the event of a breach by a Party of any representation or warranty given or made by that Party limitations set forth in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “Section 5.4 shall in any material respect,” then for purposes of determining manner limit the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application liability or indemnification obligations of the Threshold Indemnifying Party: (i) with respect to fraud, intentional misrepresentation or willful misconduct, (ii) for any of Seller's or Buyer's payment obligations under Article I and the Parent ThresholdArticle VI or other breaches of covenants in this Agreement, or (iii) indemnification under Section 5.1 or 5.2 other than for breach of representations and warranties under Section 5.1(a) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications5.2(a).
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to Notwithstanding the following limitations: provisions of this Article 8:
(i) (A) no Investor Indemnified Parties shall be entitled to indemnification pursuant to Section 8.2(a) (other than for Losses and Expenses incurred as a result of inaccuracies of the Representative representations and warranties contained in the Contributors Fundamental Representations or the Contributors Statute of Limitations Representations (collectively, the “Investor Excluded Representations”), as to which this subclause (A) shall have no liability for effect) with respect to any claim or series of related claims made under unless and until all Losses and Expenses with respect to such claim or series of related claims exceed on a cumulative basis an amount equal to $25,000 (such amount, the “Per-Claim Threshold Amount”) in which case the Investor Indemnified Parties shall, subject to this Section 10.01 until 8.5(a), be entitled to indemnification pursuant to Section 8.2(a) with respect to the aggregate full amount of the Losses incurred by a Parent Indemnified Party and Expenses relating to such claim or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar series of such Lossesrelated claims, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iiiB) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Investor Indemnified Party shall be entitled to recovery indemnification pursuant to Section 10.01. No Company Stockholder 8.2(a) (other than for Losses and Expenses incurred as a result of inaccuracies of the Investor Excluded Representations, as to which this subclause (B) shall have no effect) unless and until the aggregate amount of all Losses incurred by all Investor Indemnified Parties (taking into account only Losses and Expenses with respect to any liability claim or series of related claims having Losses and Expenses in excess of the Per-Claim Threshold Amount) for any claims made under which such Investor Indemnified Parties are entitled to indemnification pursuant to Section 10.01 8.2(a) exceeds $1,000,000 (the “Aggregate Threshold”), and then the Investor Indemnified Parties shall be entitled to indemnification with respect to the extent full amount of Losses and Expenses relating to such claim or series of related claims, and (C) the aggregate amount of all Losses and Expenses for which the Investor Indemnified Parties shall be entitled to indemnification pursuant to Section 8.2(a) (other than for Losses and Expenses incurred as a result of inaccuracies of the Investor Excluded Representations, as to which this subclause (C) shall have no effect) will not capable exceed $20,000,000 (the “Indemnification Cap”); provided that the limitations set forth in this Section 8.5(a)(i) shall not apply to claims arising from fraud asserted against the Persons committing such fraud; and
(ii) (A) no Contributor Indemnified Party shall be entitled to indemnification pursuant to Section 8.3(a) (other than for Losses and Expenses incurred as a result of being paid by inaccuracies of the Representative) unless that Company Stockholder directly participated representations and warranties contained in the making Investors Fundamental Representations (collectively, the “Contributor Excluded Representations”), as to which this subclause (A) shall have no effect) with respect to any claim or series of fraudulent misrepresentations related claims unless and until all Losses and Expenses with respect to such claim or series of related claims exceed on a cumulative basis the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the CompanyPer-Claim Threshold Amount, in which case the Company Stockholder directly participating Contributor Indemnified Parties shall, subject to this Section 8.5(a), be entitled to indemnification pursuant to Section 8.3(a) with respect to the full amount of Losses and Expenses relating to such claim or series of related claims, (B) no Contributor Indemnified Party shall be entitled to indemnification pursuant to Section 8.3(a) (other than for Losses and Expenses incurred as a result of inaccuracies of the Contributor Excluded Representations, as to which this subclause (B) shall have no effect) unless and until the aggregate amount of all Losses and Expenses incurred by all Contributor Indemnified Parties (taking into account only Losses and Expenses with respect to any claim or series of related claims having Losses and Expenses in excess of the fraud Per-Claim Threshold Amount) for which such Contributor Indemnified Parties are entitled to indemnification pursuant to Section 8.3(a) exceeds the Aggregate Threshold and then and then the Contributor and Investor Indemnified Parties shall be entitled to indemnification with respect to the full amount of Losses and Expenses relating to such claim or series of related claims, and (C) the aggregate amount of all Losses and Expenses for which the Contributor Indemnified Parties shall be entitled to indemnification pursuant to Section 8.3(a) (other than for Losses and Expenses incurred as a result of inaccuracies of the Contributor Excluded Representations, as to which this subclause (C) shall have no effect) will not exceed the Indemnification Cap; provided that the limitations set forth in this Section 8.5(a)(ii) shall not have any limitation on its liability under this Article 10apply to claims arising from fraud asserted against the Persons committing such fraud.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Parties agree that in the event any Investor Indemnified Parties are entitled to indemnification pursuant to this Article 8 with respect to a particular matter, and the Company suffered Losses and Expenses with respect to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceededsame matter, the Parent shall Contributors shall, at their election, be liable for all Losses starting from entitled, to the first dollar of extent practicable, to satisfy and discharge any such Losses and (ii) Expenses by compensating the Parent’s aggregate liability Company directly for all such claims Losses and Expenses. In the event the Contributors indemnified the Company for such Losses and Expenses pursuant to the prior sentence or the Contribution Agreement, and such indemnification paid to the Company failed to compensate such Investor Indemnified Party in full for such Losses and Expenses, the Contributors shall not exceed $35,000,000; except that Losses resulting from or arising out indemnify such Investor Indemnified Parties directly for the remainder of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties such Losses resulting from such fraudulent misrepresentations or fraudulent actionsand Expenses.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss any Losses for which a Party shall be the Indemnified Parties are entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not assert a claim for purposes of determining whether a breach of the representation has occurredindemnification hereunder, the amount of any such Loss shall Losses will be determined without limitation after deducting therefrom the amount of any insurance proceeds from a third-party insurer actually received by such Material Adverse Effect Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or materiality qualifications.their Affiliates, including any increases in premiums (whether retroactive or prospective). All Indemnified Parties shall use commercially reasonable efforts to mitigate Losses and Expenses for which such Indemnified Parties are entitled or may be entitled to indemnification under this Article 8 upon and after becoming aware of any fact, event, circumstance or condition that has given rise to or would reasonably be expected to give rise to any such Losses or Expenses. In the event that an Indemnified Party is entitled to any insurance with respect to any Losses for which such Indemnified Party seeks indemnification, such Indemnified Party shall use commercially reasonable efforts to obtain any such indemnification or recovery. In the event that any insurance proceeds are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all If the Merger is consummated, claims made against ▇▇▇▇▇ under Section 10.01 9.02(a) or against the Effective Time Holders under Section 9.02(b), as the case may be, shall be subject to the following limitations: limited as follows:
(i) Recovery from the Representative Escrow Fund shall have no liability be the sole and exclusive remedy for claims made the indemnity obligations under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party 9.02(a)(i) or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability of this Agreement, except for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced arising out of, resulting from or in Schedule 4.10 (other than Schedule 4.10(b)) connection with any failure of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred Fundamental Representations to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10be true and correct.
(bii) With respect to indemnity obligations under Section 9.02(b)(ii) (breaches of covenants):
(A) The Parent Effective Time Holders shall have liability for all claims made under Section 10.02 shall be subject to such breaches; provided however, the following limitations: (i) the Parent Effective Time Holders shall have no liability for such claims until the aggregate amount breaches of covenants if Parent had actual knowledge of the Losses incurred by 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 Holders’ 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 Effective Time Holders shall have a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars reasonable opportunity to cure such breach ($5,000,000if susceptible to cure) which shall not exceed thirty (30) Business Days, and 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 “Parent Threshold”Aggregate Merger Consideration received by all Effective Time Holders, subject to Section 9.03(b) below;
(B) The limitation in Section 9.03(a)(ii)(A) above shall not apply with respect to breaches of Section 7.05 (exclusivity; solicitation), provided that if such and accordingly, after Indemnified Persons have exhausted or made claims against the Effective Time Holders upon all shares of Parent Threshold is exceededSeries 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 Parent Effective Time Holders shall be liable for all Losses starting from the first dollar amount of such Losses and any Indemnifiable Damages resulting therefrom not to exceed one-hundred percent (ii100%) of the Parent’s aggregate liability 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 all such the amount of any Indemnifiable Damages with respect to claims shall not exceed $35,000,000; except that Losses 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 fraudulent misrepresentations or fraudulent action by Indemnifiable Damages resulting therefrom; provided that such liability shall be limited to such holder’s Pro Rata Share of the Parent shall result in the Parent being liable 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 Stockholder Indemnified Party or Stockholder Indemnified Parties shares of Company Common Stock (including, but not limited to, under Section 4.03(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 full extent amount of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses Aggregate Merger Consideration actually received by such Effective Time Holder. 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 fraudulent misrepresentations or fraudulent actionsEffective Time Holder.
(c) In Notwithstanding anything to the event contrary herein, no Indemnified Person may make a claim for indemnification that is made pursuant to Sections 9.02(a)(i) or (ii) (and that does not involve fraud or intentional misrepresentation by or on behalf of a the Company or any inaccuracy or breach by a Party of any representation or warranty given or made by that Party of the Fundamental Representations), unless and until an Officer’s Certificate describing Indemnifiable Damages in this Agreement that is qualified so as to an aggregate amount greater than one hundred thousand dollars ($100,000.00) (the “Basket”) has been delivered, in which case the Indemnified Person may only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “make claims for indemnification for Indemnifiable Damages in any material respect,” then for purposes excess of determining the amount of Loss the Basket.
(d) The Effective Time Holders shall not make any claim for which a Party shall be contribution from the Company or any 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 Transactions to the extent that any Indemnified Person is entitled to recover pursuant to this Article 10 (indemnification hereunder for such claim, and the application Effective Time Holders hereby waive any such right of contribution from the Threshold Company and any its officers, directors, or employees it has or may have in the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsfuture.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made Notwithstanding the foregoing provisions of this Article X, but excepting Losses arising from a breach of Seller's obligations under Section 10.01 shall be subject to the following limitations: Article VIII hereof, (i) neither party shall be responsible for any indemnifiable Losses suffered by the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount other party arising (x) out of breaches of the representations and warranties of such other party herein or in the License Agreements unless a claim therefor is asserted in writing on or prior to the first anniversary of the Closing Date or (y) from liabilities and obligations relating to the Business that were known to Seller on the Closing Date and should have been disclosed in Schedule 3.12 or the Financial Statements but were not so disclosed ("Undisclosed Liability Losses") unless a claim therefor is asserted in writing on or prior to the fifth anniversary of the Closing Date; (ii) neither party shall be liable for any Losses incurred (other than Undisclosed Liability Losses) suffered by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five the other party arising out of the breaches of the indemnifying party's representations and warranties until all such Losses exceed Two Million Dollars ($5,000,000) (the “Threshold”2,000,000.00), provided that if in which event the indemnifying party's indemnity obligation shall apply only to the extent of any such Threshold is exceededexcess, and (iii) the Representative shall be liable aggregate liability of either party hereunder for all (x) Losses starting from suffered by the first dollar other party arising out of such breaches of the indemnifying party's representations and warranties, (y) Undisclosed Liability Losses, plus (iiz) Losses suffered by the Representative’s aggregate liability for all claims other party arising under Section 10.01 Article VIII shall not in no event exceed Fifty Forty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b40,000,000.00)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Sources: Asset Sale and Purchase Agreement (Geo Specialty Chemicals Inc)
Limitations on Indemnification. (a) The Representative’s liability An Indemnified Party shall not assert any claim for all claims made under Section 10.01 shall be subject indemnity pursuant to this Agreement unless and until the following limitations: amount of Losses incurred or sustained by such party with respect to any individual matter exceeds $10,000 (ithe "Threshold Amount") the Representative shall have no liability for claims made under Section 10.01 until and the aggregate amount of indemnification so asserted exceeds $50,000 (the Losses incurred by a Parent "Basket Amount"), provided, however, that once the Basket Amount has been reached, the Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative may claim and shall be liable for entitled to receive the amount of any and all Losses starting from the first dollar of such individual Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced regardless of whether such Losses are below or in Schedule 4.10 (other than Schedule 4.10(b)) excess of the Company Disclosure Schedules shall constitute a Loss for which a Parent Threshold Amount. The Indemnified Party shall be entitled to recovery pursuant indemnity from the Indemnifying Party hereunder only with respect to Section 10.01any amounts in excess of the Basket Amount. No Company Stockholder shall have any liability for any claims made under Section 10.01 (Notwithstanding anything in this Agreement to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Companycontrary, in which case the Company Stockholder directly participating in the fraud an Indemnifying Party's maximum aggregate indemnification obligations hereunder shall not have any limitation on its liability under this Article 10exceed $4,000,000.
(b) The Parent liability for An Indemnified Party shall take all claims made under Section 10.02 shall be subject reasonable steps to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of mitigate the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar involved upon and after becoming aware of such Losses and (ii) the Parent’s aggregate liability for matter, including using all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result reasonable efforts in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsconnection with obtaining recovery on insured claims.
(c) In Except with respect to (i) claims to compel compliance with the event undertakings and agreements set forth in Sections 1.1(c) and 1.6 hereof, and (ii) those Sections set forth on Exhibit 7.6(c) hereto, the indemnification provisions of a Sections 7.1 through 7.6 hereof shall be the sole and exclusive post-Closing remedy available, under contract, tort or any other legal theory, to the Indemnified Party for any breach by a Party of any representation representation, warranty, covenant or warranty given or made agreement by that the Indemnifying Party contained in this Agreement that is qualified so as to only be deemed breached if (including any disclosure Exhibits or the representation would have a Material Adverse Effect on a Deferred Disclosure Exhibit), the Supply Agreement, the Transition Services Agreement, the Reseller Agreement, the ▇▇▇▇ of Sale or the Assumption Agreement or any misrepresentation by the Indemnifying Party or is otherwise qualified as to “materiality” or “contained in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect foregoing agreements or materiality qualificationsdocuments.
Appears in 1 contract
Sources: Asset Purchase Agreement (Blonder Tongue Laboratories Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be rights of the Parent Indemnified Parties and the Securityholder Indemnified Parties to indemnification pursuant to the provisions of this Article VIII are subject to the following limitations: , notwithstanding anything in this Agreement to the contrary:
(ia) the Representative No individual claim for indemnification by any Parent Indemnified Party pursuant to Section 8.02(a) or by any Securityholder Indemnified Party pursuant to Section 8.03 shall have no liability for claims made under Section 10.01 be asserted unless and until the aggregate amount of Losses that would be payable pursuant to such claim exceeds an amount equal to $20,000 (the Losses incurred “Mini-Basket”) (it being understood that any such individual claims for amounts less than the Mini-Basket shall be ignored in determining whether the Deductible (as defined below) has been exceeded and thereafter;
(b) No claims for indemnification by a any Parent Indemnified Party pursuant to Section 8.02(a) shall be asserted, and no Parent Indemnified Party shall be entitled to recover any Losses in respect of any indemnification claim made pursuant to Section 8.02(a), unless and until the aggregate amount of Losses that would otherwise be payable pursuant to Section 8.02(a) exceeds on a cumulative basis an amount equal to $250,000 (the “Deductible”), and if the amount of Losses suffered or paid by the Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (shall exceed the “Threshold”), provided that if such Threshold is exceededamount of the Deductible, the Representative Parent Indemnified Parties shall only be liable for permitted to recover from the General Indemnity Escrow Amount the amount of Losses that exceed the Deductible until such excess amount equals $250,000, following which the Parent Indemnified Parties shall only be permitted to recover from the General Indemnity Escrow Amount fifty percent (50%) of the amount of all such Losses starting that exceed $500,000 on a cumulative basis, but subject in all cases to the other terms set forth in this Article VIII; provided, however, that this Section 8.04(b) shall not apply to Losses suffered or paid by any Parent Indemnified Party as a result of the breach of any of the Company Fundamental Representations or Section 3.08, it being agreed that, in such circumstances, the applicable Parent Indemnified Party shall, subject to the other limitations set forth in this Article VIII, be entitled to be indemnified and held harmless from the General Indemnity Escrow Amount from the first dollar of such Losses;
(c) No claims for indemnification by any Securityholder Indemnified Party pursuant to Section 8.03(a) shall be asserted, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Securityholder Indemnified Party shall be entitled to recovery recover any Losses in respect of any indemnification claim made pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) 8.03(a), unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims and until the aggregate amount of Losses that would otherwise be payable pursuant to Section 8.03(a) exceeds on a cumulative basis an amount equal to the Deductible, and if the amount of Losses incurred suffered or paid by the Securityholder Indemnified Parties shall exceed the amount of the Deductible, the Securityholder Indemnified Parties shall only be permitted to recover the amount of Losses that exceed the Deductible until such excess amount equals $250,000, following which the Securityholder Indemnified Parties shall only be permitted to recover fifty percent (50%) of the amount of all such Losses that exceed $500,000 on a Stockholder cumulative basis, but subject in all cases to the other terms set forth in this Article VIII; provided, however, that this Section 8.04(c) shall not apply to Losses suffered or paid by any Securityholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (as a result of the “breach of any of the Parent Threshold”)Fundamental Representations, provided that if it being agreed that, in such Parent Threshold is exceededcircumstances, the Parent shall applicable Securityholder Indemnified Party shall, subject to the other limitations set forth in this Article VIII, be liable for all Losses starting entitled to be indemnified and held harmless from the first dollar of such Losses Losses;
(d) The sole and exclusive source of recovery in respect of any indemnification claim made by any Parent Indemnified Party pursuant to (i) Section 8.02(a) shall be the General Indemnity Escrow Amount (it being agreed that the Parent Indemnified Parties shall also have recourse to the Special Policy in respect of any such indemnification claim), (ii) Section 8.02(b) shall be the Tax Indemnity Escrow Amount, (iii) Section 8.02(c) shall be the Litigation Indemnity Escrow Amount, and (iv) Section 8.02(d)) shall be the Appraisal Indemnity Escrow Amount. In no event shall (i) any Securityholder or any Affiliate thereof or any other Person have any direct liability or obligation in respect of any such indemnification claim, or (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article 10 VIII from any source other than the applicable Indemnity Escrow Account (and the application Special Policy with respect to claims made pursuant to Section 8.02(a)), subject to Section 8.08, it being agreed that on the date (if any) an Indemnity Escrow Amount is reduced to zero (0) for any reason (including due to the release of the Threshold and applicable Indemnity Escrow Amount from the applicable Indemnity Escrow Account on the applicable Escrow Release Date in accordance with the terms of the Escrow Agreement), the Parent ThresholdIndemnified Parties shall have no further rights to indemnification from the Securityholders pursuant to this Article VIII (except to the Special Policy solely with respect to claims made pursuant Section 8.02(a)).
(e) and not for purposes The maximum aggregate Losses indemnifiable pursuant to Section 8.03(a) shall be an amount equal to $500,000;
(f) The amount of determining whether any Loss subject to indemnification under Sections 8.02 or 8.03 shall be calculated net of any insurance proceeds or any indemnity, contribution or other similar payment recoverable by the Indemnitee from any third party with respect thereto, other than the Special Policy. If the Indemnitee receives a breach of Tax Benefit due to the representation has occurredindemnity payment, the Indemnitee shall promptly pay to the Indemnitor, the amount of such Loss Tax Benefit at such time or times as and to the extent that such Tax Benefit is realized by the Indemnitee, for the taxable year of such indemnity payment and, if any, for two taxable years thereafter, but in no event shall be determined without limitation by the amount of such Material Adverse Effect or materiality qualifications.payment to the Indemnitor exceed the amount of the
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) Notwithstanding anything in this Article VII to the Representative shall have no liability for claims made contrary other than the next succeeding sentence, an Indemnifying Party will be required to indemnify and hold harmless an Indemnified Party under Section 10.01 until 8.1 or Section 8.2 hereof with respect to any Loss or Losses incurred by any such Indemnified Party only to the extent that the aggregate amount of all Losses of the applicable Indemnified Parties (that is, either the Buyer Indemnified Parties or the Company Indemnified Parties, as the case may be) exceeds $2,000,000 in the aggregate, in which event the Indemnifying Party will only be liable for the excess of such Loss or Losses over $2,000,000. The foregoing limitations will not be applicable to any willful breach by any party of any representation, warranty, covenant or agreement hereunder.
(ii) With respect to any claim by the Buyer Indemnified Parties, Losses (a) will include any Loss or Losses incurred by the Buyer which arises from or relates to the diminution in the value per share of Common Stock caused by any breach by the Company of a Parent Indemnified Party representation or Parent warranty contained herein and (b) will fully take into account the diminution in value of the Company Shares held by the Buyer Indemnified Parties exceeds Five Million Dollars in the aggregate ($5,000,000determined by reference to the number of shares of Common Stock outstanding on a fully diluted basis) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting resulting from the first dollar indemnification payment made by the Company (whether made in cash, in stock or in the form of such Losses, a note). As an example of the operation of clause (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)b) of the Company Disclosure Schedules shall constitute a Loss for which a Parent preceding sentence, if the Losses suffered by the Buyer Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (Parties prior to the extent not capable operation of being paid by clause (b) were $100,000 and the Representative) unless that Company Stockholder directly participated Buyer Indemnified Parties in the making aggregate owned 90% of fraudulent misrepresentations or the taking total issued and outstanding Common Stock at the time of fraudulent actions delivery of their Notice of Claim, the indemnification payment made by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 VII would be $1 million (and or its equivalent in stock if paid in stock pursuant to Section 8.3). Notwithstanding anything to the application of contrary in this Section 8.6, for the Threshold and the Parent Threshold) and not for purposes purpose of determining whether a breach Loss or Losses to a Buyer Indemnified Party resulting from a diminution in the value per share of the representation has occurredCommon Stock exceeds $2,000,000, such Loss or Losses shall be measured as the amount of such Loss shall or Losses without giving effect to clause (b) of this Section 8.6(a)(ii). As an example of the operation of the preceding sentence, total Losses to the Company of $1,800,000 would not be determined without limitation indemnifiable by such Material Adverse Effect or materiality qualificationsthe Company to the Buyer Indemnified Parties despite the fact that the operation of clause (b) of this Section 8.6(a)(ii) would otherwise have caused the indemnification payment to exceed $2,000,000.
Appears in 1 contract
Sources: Subscription Agreement (First Reserve Corp /Ct/ /Adv)
Limitations on Indemnification. (a) The Representative’s liability Indemnified Persons may not recover Losses from the Indemnification Escrow Fund or the Indemnitors in respect of any claim for indemnification pursuant to Section 7.3(a)(i) unless and until Losses have been incurred, paid or properly accrued in an aggregate amount greater than $500,000 (the “Deductible”); provided, that the Indemnified Persons will be entitled to recover all, and the Deductible will not apply to any, Losses with respect to any failure of any Fundamental Representation to be accurate. Once the Deductible has been exceeded, the Indemnified Persons will be entitled to recover only those Losses in respect of all claims made under for indemnification pursuant to Section 10.01 shall 7.3(a)(i) (as a result of a breach or inaccuracy of any representation or warranty of the Company other than the Fundamental Representations) that, in the aggregate, exceed the Deductible.
(b) Except in the case of Fraud, recovery by Indemnified Persons of their Losses in aggregate will be subject to the following limitations: :
(i) the Representative shall have no liability for claims made under With respect to Losses claimed pursuant to Section 10.01 until the aggregate amount 7.3(a)(i) as a result of any breach or inaccuracy of any representation or warranty of the Company, other than the Fundamental Representations, an Indemnified Person may recover its Losses incurred by only from the then-remaining amount available in the Indemnification Escrow Fund.
(ii) With respect to Losses claimed pursuant to Section 7.3(a)(i) as a Parent Indemnified Party result of any breach or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”inaccuracy of any Fundamental Representation or pursuant to Section 7.3(a)(ii), provided that if such Threshold is exceededSection 7.3(a)(iii), the Representative shall be liable for all Section 7.3(a)(iv), Section 7.3(a)(v), Section 7.3(a)(vi), Section 7.3(a)(vii), or Section 7.3(a)(ix), an Indemnified Person may recover its Losses starting as follows: (A) first, from the first dollar then-remaining amount available in the Indemnification Escrow Fund, and (B) second, to the extent such Losses exceed the then-remaining amount available in the Indemnification Escrow Fund in all unresolved or unsatisfied Liability Claims, directly from each Indemnitor according to his, her or its Direct Indemnification Percentage of such Losses, up to an amount that equals the aggregate consideration received by such Indemnitor hereunder (the “Liability Cap”).
(iii) With respect to Losses claimed pursuant to Section 7.3(a)(viii), an Indemnified Person may recover such Losses at its sole discretion (i) from the Indemnification Escrow Fund, or (ii) directly from each Indemnitor according to his, her or its Direct Indemnification Percentage of such Losses up to such Indemnitor’s Liability Cap, except that the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars Indemnified Person may recover without regard to such Liability Cap ($50,000,000and without any other limitations) and (iii) no item relating to Taxes that from any Indemnitor who is referenced in Schedule 4.10 (other than Schedule 4.10(b)) the subject of the Company Disclosure Schedules claim as the Person that committed the Fraud. Notwithstanding anything to the contrary contained in this Agreement, nothing in this Agreement shall constitute a Loss prevent any of the Indemnified Persons from bringing an Action for which a Parent Indemnified Party Fraud, and pursuing all available remedies, against an Indemnitor (or any other Person) who committed Fraud.
(iv) Notwithstanding anything in this Agreement to the contrary, (A) there shall be entitled to recovery pursuant to Section 10.01. No no indemnification provided for, and the Company Stockholder shall have makes no representations or warranties regarding, (x) the amount, value or condition of, or any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations limitations on, or the taking ability of fraudulent actions by the Company Parent or any of its Affiliates (including the parties referred Surviving Entity, the Second Surviving Entity and the Third Surviving Entity) to in the definition of Knowledge utilize any Tax Attributes of the Company, in which case each case, in a Tax period (or portion thereof) beginning after the Closing Date, (y) Taxes of the Company Stockholder directly participating for any taxable period (or portion thereof) beginning after the Closing Date, except with respect to the Taxes addressed in Section 2.10(g) and (z) Taxes of the fraud Company that are incurred as a result of any transaction undertaken or caused to be undertaken by any Parent Party outside the ordinary course of business on the Closing Date but after the Closing unless explicitly contemplated by this Agreement or any Related Agreement, or with the written consent of the Representative (which consent shall not have be unreasonably withheld, conditioned or delayed), and (B) for the avoidance of doubt, Parent will not, except as result of a breach of Section 3.7, be responsible for any limitation on its liability Losses of any holder of Company Capital Stock stemming from the failure of the Transactions to qualify for the Intended Tax Treatment.
(c) Any Losses pursuant to this Article 7 will be determined without duplication of recovery due to the facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant or agreement, or being indemnifiable pursuant to more than one clause of Section 7.3(a); provided, however, that if a Liability Claim may be characterized in more than one way under this Article 107 and as a result, such Liability Claim may be subject to different limitations pursuant to this Section 7.4 depending on such characterization, then an Indemnified Person will have the right to characterize the Liability Claim in a manner, and under such provisions of this Article 7, that maximizes such Indemnified Person’s recovery.
(bd) Except as otherwise required by Law, the Parties will treat any indemnification payments made hereunder as an adjustment to the Merger Consideration for applicable accounting and Tax purposes.
(e) No Indemnitor will have any right of contribution or right of indemnity against Parent, the Surviving Entity, the Second Surviving Entity or the Third Surviving Entity in connection with any indemnification obligation or any other liability to which such Indemnitor may become subject pursuant to or in connection with this Agreement.
(f) No Indemnified Person’s rights pursuant to this Article 7 will be adversely affected, or deemed to be amended, adjusted or supplemented in any way, by any investigation conducted, or any knowledge acquired or capable of being acquired, by an Indemnified Person at any time, whether before or after the execution or delivery of this Agreement or the Closing.
(g) The right of Parent liability or any other Indemnified Persons to pursue Action for all claims made any remedies or relief under Section 10.02 any Related Agreement against the counterparties thereto will not be limited by the rights of the Indemnified Persons under this Article 7.
(h) The Indemnified Persons shall be subject use commercially reasonable efforts to the following limitations: mitigate or otherwise reduce its Losses.
(i) the Parent shall have no liability for such claims until the aggregate The amount of any indemnification obligation to any Indemnified Person for an indemnifiable matter pursuant to this Article 7 shall be reduced by the Losses incurred by a Stockholder Indemnified Party amount of any proceeds under an insurance policy, net of any costs of collection, deductibles, increased premium amounts, reimbursement obligation or Stockholder Indemnified Parties exceeds Five Million Dollars other costs related to the insurance claim in respect of such indemnifiable matter ($5,000,000) (the “Parent ThresholdNet Insurance Proceeds”), provided actually received by such Indemnified Person for the same facts that if give rise to such Parent Threshold is exceededindemnifiable matter; provided, the Parent however, that nothing in this Article 7 shall be liable for all Losses starting constitute or imply an obligation of any Indemnified Person to seek recovery of Losses, or any part thereof, under any insurance policy. If an Indemnified Person actually receives any payments from the first dollar Indemnitors for an indemnifiable matter pursuant to this Article 7 and thereafter, such Indemnified Person receives Net Insurance Proceeds for the same facts that give rise to such indemnifiable matter, such Indemnified Person shall promptly notify the Representative thereof, and promptly, but in any event no later than ten Business Days after the actual receipt of such Losses proceeds, pay to the Escrow Agent an amount equal to the lesser of (i) such Net Insurance Proceeds and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss payments previously received by such Indemnified Person from the Indemnitors for which a Party shall be entitled to recover such indemnifiable matter pursuant to this Article 10 7, which amount shall be paid to the Indemnitors by the Escrow Agent as follows: (and the application A) in respect of the Threshold Indemnitors that are holders of Company Capital Stock, in the form of cash by wire transfer of immediately available funds to an account designated by such Indemnitors in writing, and the Parent Threshold(B) and not for purposes of determining whether a breach in respect of the representation has occurredIndemnitors that are holders of In-the-Money Options, the amount of such Loss shall be determined without limitation by such Material Adverse Effect cash through Parent’s (or materiality qualificationsits applicable Affiliate’s) payroll processing system subject to employment and any other applicable Tax withholding.
Appears in 1 contract
Sources: Merger Agreement (Nerdwallet, Inc.)
Limitations on Indemnification. (a) The Representative’s liability parties will, to the extent permitted by Law, treat any indemnification payment under this Article VII as an adjustment to the Purchase Price on all Tax Returns.
(b) Subject to Section 7.2(d), neither the Seller nor the Purchaser shall have Liability under or in connection with this Agreement for all claims made Indemnifiable Losses pursuant to Section 7.3(a)(i) or Section 7.3(b)(i) in excess of an aggregate amount equal to $1,750,000 (the “Cap Amount”).
(c) No Indemnitee will be entitled to recover Indemnifiable Losses from an Indemnifying Party in respect of any breach of a representation or warranty under Section 10.01 shall be subject to the following limitations: (i7.3(a)(i) the Representative shall have no liability for claims made under or Section 10.01 7.3(b)(i) unless and until the aggregate amount of the Indemnifiable Losses incurred by a Parent Indemnified Party in respect of breaches of representations and warranties asserted for Indemnifiable Losses under Section 7.3(a)(i) or Parent Indemnified Parties Section 7.3(b)(i), as applicable, exceeds Five Million Dollars ($5,000,000) 100,000 (the “ThresholdDeductible”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case event the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall Indemnitee will be entitled to recover pursuant to this Article 10 (Indemnifiable Losses in respect of breaches of representations and the application warranties asserted for Indemnifiable Losses under Section 7.3(a)(i) or Section 7.3(b)(i), as applicable, from an Indemnifying Party for all Indemnifiable Losses under Section 7.3(a)(i) or Section 7.3(b)(i), as applicable, in excess of the Threshold and Deductible.
(d) Anything to the Parent Thresholdcontrary herein notwithstanding, the limitations set forth in Section 7.2(b) and Section 7.2(c) shall not for purposes apply to Indemnifiable Losses related to indemnification Claims under Section 7.3(a)(i), Section 7.3(a)(ii) or Section 7.3(b)(i) arising out of, relating to or incurred as a result of determining whether a breach of the representation has occurredfraud, the amount of such Loss shall be determined without limitation by such Material Adverse Effect intentional misrepresentation or materiality qualificationswillful misconduct.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification. (a) The Representative’s liability for all In connection with any indemnification claim (except with respect to any indemnification claims made under arising out of Section 10.01 6.2(d) or Section 5.17 Losses) by any Person, neither the Sellers (collectively) nor Purchaser shall be subject liable in an aggregate amount which, if added to all other amounts paid as indemnification payments by such indemnifying party would exceed an amount equal to the following limitations: Indemnity Cap. Notwithstanding the foregoing, except with respect to Losses resulting from breaches of representations or warranties made in Section 6.2(d) or Section 5.17 Losses, no indemnifying party shall be required to indemnify any Person for Losses resulting from a breach of representation or warranty made in this Agreement until, and only to the extent, the aggregate amount of all Losses for which the indemnified parties are otherwise entitled to indemnification pursuant to this Agreement exceeds an amount equal to One Million Five Hundred Thousand Dollars (i$1,500,000) (the Representative "Deductible Amount"); provided, however, that De Minimis Losses shall have no liability for claims made under Section 10.01 not count towards the Deductible Amount unless and until the aggregate amount of the all De Minimis Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded1,000,000. If at any time, the Representative indemnified parties' aggregate Losses (except with respect to Losses resulting from breaches of representations or warranties made in Section 6.2(d) or Section 5.17 Losses) for which such indemnified parties are entitled to indemnification pursuant to this Agreement exceed the Deductible Amount, then the indemnifying party shall be liable only for all Losses starting in excess of the Deductible Amount; provided further that (except with respect to indemnification obligations contained in Section 6.2(d) or Section 5.17 Losses) the obligations of the Sellers shall be satisfied solely from the first dollar of such LossesIndemnification Escrow Account, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10without further recourse.
(b) The Parent liability for all claims made under Section 10.02 Any Loss otherwise indemnifiable hereunder shall be subject to the following limitations: reduced by (i) any amount actually recoverable in connection therewith under insurance or the Parent shall have no liability indemnified party shall, upon receiving full payment for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting Loss from the first dollar of indemnifying party, assign to the indemnifying party the right to 42 pursue recovery under such Losses insurance and (ii) any Tax benefit actually realized arising from the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from payment or arising out accrual of any fraudulent misrepresentations or fraudulent action by the Parent such indemnified amount, which payment shall result in the Parent being liable be made to the Stockholder Indemnified Party or Stockholder Indemnified Parties to Sellers within five (5) Business Days after the full extent filing of the Stockholder Indemnified Tax Return on which such benefits are reflected. There shall be no indemnification pursuant to this Agreement for any punitive damages with respect to any claims other than those incurred in connection with a Third- Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsClaim.
(c) In If an indemnifying party makes any payment under this Agreement in respect of any Losses, such indemnifying party shall be subrogated, to the event extent of such payment, to the rights of the indemnified party against any third party with respect to such Losses; provided, however, that such indemnifying party shall not have any rights of subrogation with respect to any other party hereto or any of their respective Affiliates or their Affiliates' respective officers, directors, agents or employees. To the extent the indemnifying party does not have rights of subrogation against any party as a result of the proviso to the proceeding sentence, the indemnified party will take commercially reasonable steps to collect from such third party in respect of such Losses, and will turn over to the indemnifying party any amounts it receives from such third party in respect of such Losses (less any and all reasonable costs and expenses associated with such collection), to the extent of the payment actually made by the indemnifying party in respect of such Losses.
(d) The obligations set forth in this Article VIII shall terminate upon the first anniversary of the Closing, other than with respect to Section 5.17 Losses, which shall survive until 60 days after the applicable statute of limitations; provided, however, that such obligations shall continue beyond such periods with respect to any claims properly made by delivery of a breach by a Party notice of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if such claim before the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes expiration of determining the amount of Loss for which a Party shall be entitled to recover applicable period pursuant to this Article 10 (and VIII during such periods that are not resolved at the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount conclusion of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsperiods.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made Rights to indemnification under Section 10.01 shall be this Article 8 are subject to the following limitations: :
(iA) For purposes of this Article 8, all Damages shall be computed net of any insurance coverage which reduces the Representative Damages that would otherwise be sustained; provided that in all cases the timing of the receipt or realization of insurance proceeds shall have no liability for claims made under be taken into account in determining the amount of reduction of Damages.
(B) Subject to the provisions of Section 10.01 until 8.4(c), below, USCorp shall not be entitled to indemnification hereunder with respect to an Indemnifiable Claim or Claims unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims exceeds $30,000.00. Once USCorp's Damages exceed $30,000.00 in the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”)aggregate, provided that if such Threshold is exceeded, the Representative USCorp shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall only be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (be indemnified to the extent of such Damages in excess of such initial $30,000.00 of Damages.
(C) Notwithstanding and in lieu of the provisions of Section 8.4(b), above, USCorp shall not capable be entitled to indemnification with respect to an Indemnifiable Claim or Claims resulting from a breach of being paid by the Representative) unless that Company Stockholder directly participated representations and warranties contained in the making last paragraph of fraudulent misrepresentations Section 4.13 unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims exceeds $5,000.00. Once USCorp's Damages for any such breach exceeds $5,000.00 in the taking aggregate, USCorp shall only be entitled to be indemnified to the extent of fraudulent actions such Damages in excess of such initial $5,000.00 of Damages.
(D) The obligations of indemnity under this Article 8 with respect to any indemnifiable claim shall terminate three years after the Closing Date.
(E) If, prior to the termination of the obligation to indemnify, written notice of an Indemnifiable Claim is given by the Company USCorp or any of the parties referred USMetals' Shareholders, as the case may be (an "Indemnified Party") to in the definition of Knowledge other Party or Parties, as the case may be (the "Indemnifying Party"), or a suit or action based upon an alleged Indemnifiable Claim is commenced against the Indemnifying Party, the Indemnified Party shall not be precluded from pursuing such Indemnifiable Claim (whether through the courts or otherwise) by reason of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount termination of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000obligation of indemnity as described in Section 8.4(d) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsabove.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a No Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Seller Indemnified Party shall be entitled to recovery assert any claim for indemnification pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under 9.1, or Section 10.01 (9.2, as applicable, unless such claim is asserted by a written notice given by such party in accordance with the terms hereof prior to the extent not capable close of being paid by business on the Representative) unless that Company Stockholder directly participated in the making date of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any expiration of the parties referred to applicable survival period set forth in the definition of Knowledge of the CompanySection 9.5, in which case the Company Stockholder directly participating in representation, warranty, covenant or agreement which is the fraud subject of such claim and any related claims arising from such claim shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject survive, to the following limitations: extent of such claims only, until such claims are resolved, whether or not the amount of Losses resulting from such claim has been finally determined at the time the notice is given. Notwithstanding anything in this Agreement to the contrary, (i) the Parent Indemnified Parties shall have no liability not be entitled to assert any claim for such claims indemnification under Section 9.1(a) unless and until the aggregate amount of the liability for Losses incurred suffered by a Stockholder Indemnified Party or Stockholder Parent Indemnified Parties thereunder exceeds Five Million Dollars ($5,000,000) 150,000 (the “Parent ThresholdDeductible”), provided that if such Parent Threshold is exceeded, and then only to the Parent shall be liable for all Losses starting from the first dollar extent of such Losses and excess, (ii) the Parent’s Seller Indemnified Parties shall not be entitled to assert any claim for indemnification under Section 9.2(a) unless and until the aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action suffered by the Parent shall result in Seller Indemnified Parties thereunder exceeds the Parent being liable Deductible, and then only to the Stockholder Indemnified Party or Stockholder extent of such excess, (iii) no claim for indemnification pursuant to Section 9.1 may be asserted with respect to any Loss suffered by Parent Indemnified Parties to the full extent (and only to the extent) that such Loss has been reserved for in the consolidated balance sheets of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
Company and its Subsidiaries included in the Company Financial Statements (cexcluding any notes thereto), (iv) In the aggregate liability of the Seller under Section 9.1(a) and of Parent and Unit Purchaser under Section 9.2(a) shall in no event exceed $1,000,000, and (v) the limitations set forth in Section 9.4(a)(i) - (iv) shall not apply in the event of a breach of any Fundamental Representation, a breach of Section 4.13 (Tax), indemnification pursuant to Section 9.1(c) or to Losses caused by fraud or willful misconduct (“Fraud”), provided, that, the maximum aggregate liability of the Seller resulting from a Party breach of Fundamental Representations of the Seller or the Company or a breach of Section 4.13 (Tax) or indemnification pursuant to Section 9.1(c) shall equal the value of the Aggregate Consideration actually received by the Seller. The express written waiver of any condition to the Closing based on the accuracy of any representation or warranty given shall be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or made warranty, covenant, agreement or obligation. In the event that a Parent Indemnified Party or Seller Indemnified Party makes a claim for indemnification, it shall use commercially reasonable and cost effective efforts to mitigate and/or remediate the loss, including by that Party drawing on insurance policies to recover for such losses. Notwithstanding anything in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then contrary, for purposes of determining the amount of any Loss for related to such breach or misrepresentation, such representation or warranty shall be considered without regard to any “material,” “material adverse effect,” “Company Material Adverse Effect,” “Parent Material Adverse Effect” or other similar qualifications set forth therein.
(b) The amount of any Losses that any Parent Indemnified Party is entitled to receive pursuant to Section 9.1 shall be reduced (A) to reflect any Tax Benefit actually utilized, in the year in which a the indemnity payment is required to be made or in any prior year, by Parent or Unit Purchaser or any of their respective Subsidiaries, and (B) by any amounts actually recovered by Parent Indemnified Party (or its Affiliates) under insurance policies, indemnities or other reimbursement arrangements with respect to such Losses. Any Parent Indemnified Party shall waive, to the extent permitted under applicable insurance policies, any subrogation rights that the insurer might have with respect to any indemnifiable Losses. Parent Indemnified Parties shall have no right to assert any claims under this Article IX with respect to any Losses that would have been covered by insurance had Parent maintained for the benefit of the Company (or caused the Company to maintain) the same insurance coverage following the Closing that was in effect for the Company immediately prior to Closing. To the extent that the claim with respect to which an indemnity obligation arises has not given rise to a Tax Benefit in a prior year or in the year in which the indemnity payment is to be made, but gives rise to a Tax Benefit in a later year, Parent Indemnified Party shall pay to the Seller the amount of such Tax Benefit. For purposes of this Agreement, “Tax Benefit” means any deduction, amortization, exclusion from income or other allowance that actually reduces in cash the amount of Tax that Parent or Unit Purchaser or any of their respective Subsidiaries would have been required to pay (or actually increases in cash the amount of Tax refund to Parent or Unit Purchaser or any of their respective Subsidiaries would have been entitled) in the absence of the item giving rise to the indemnity claim. For purposes of determining the amount of any payment due to the Indemnifying Party pursuant to this Section 9.4, Parent or Unit Purchaser or any of their respective Subsidiaries shall be deemed to use all other deductions, amortizations, exclusions from income or other allowances of the Company or of any Subsidiary of the Company (to the extent that such deductions, amortizations, exclusions from income or other allowances are entitled to be used under applicable Tax law) prior to the use of any Tax Benefits in respect of which Parent or Unit Purchaser is obligated to pay the Indemnifying Party hereunder. The parties acknowledge and agree that, subject to Section 12.10, should the Closing occur, the sole and exclusive remedy of each party with respect to any and all claims relating to any breach of any representation, warranty or covenant made in this Agreement (other than claims of, or causes of action arising from, fraud or Willful or Intentional Breach) shall be governed by, and subject to, the terms and provisions set forth in this Article IX. In furtherance of the foregoing, the parties hereby waive, from and after the Closing, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud or Willful or Intentional Breach) that it may have against the other parties or their respective Affiliates arising under or based upon any breach of any representation, warranty or covenant made in this Agreement (except pursuant to the indemnification provisions set forth in this Article IX and equitable remedies set forth in Section 12.10). Except to the extent actually paid to an unrelated third party, in no event shall Parent be entitled to recover pursuant to this Article 10 (and or make a claim against the application Seller or any of their Affiliates or Representatives, regardless of the Threshold and the Parent Threshold) and not legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise, for purposes any amounts in respect of determining whether a breach consequential, incidental or indirect damages, lost profits, diminution in value or punitive damages and, in particular, no “multiple of the representation has occurred, profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsany Losses.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Cardiome Pharma Corp)
Limitations on Indemnification. (a) The Representative’s liability No claim may be asserted against either party for all claims made under Section 10.01 shall be subject breach of any representation, warranty or covenant contained herein, unless written notice of such claim is received by such party, describing in reasonable detail the facts and circumstances with respect to the following limitations: subject matter of such claim on or prior to the date on which the representation, warranty or covenant on which such claim is based ceases to survive as set forth in Section 8.1, in which case such representation, warranty or covenant shall survive as to such claim until such claim has been finally resolved.
(b) Notwithstanding anything to the contrary contained in this Agreement:
(i) (A) an Indemnifying Party shall not be liable for any claim for indemnification pursuant to Section 8.2(a) or Section 8.3(a), as the Representative shall have no liability for claims made under Section 10.01 case may be, unless and until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall which may be liable for all Losses starting recovered from the first dollar of such Losses, Indemnifying Party (ii) the Representative’s aggregate liability for all claims under without reference to this Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b8.5(b)(i)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations equals or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Companyexceeds $450,000, in which case the Company Stockholder directly participating Indemnifying Party shall be liable for the aggregate amount of such Losses in excess of $225,000; provided, however, that the fraud amount of indemnifiable Losses which may be recovered by the Buyer Indemnified Parties for any breach of the Sellers Core Representations or by the Seller Indemnified Parties for any breach of the Buyers Core Representations shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: limitations set forth in this Section 8.5(b)(i)(A); and (iB) the Parent maximum aggregate amount of indemnifiable Losses which may be recovered by the Buyer Indemnified Parties under Section 8.2(a) or by the Seller Indemnified Parties under Section 8.3(a) shall have no liability be an amount equal to the Escrow Amount; provided, however, that the maximum aggregate amount of indemnifiable Losses which may be recovered by the Buyer Indemnified Parties for such claims until any breach of the Sellers Core Representations or by the Seller Indemnified Parties for any breach of the Buyers Core Representations shall be an amount equal to the Purchase Price; and provided, further, that the aggregate amount of indemnifiable Losses which may be recovered by any party for fraud or fraudulent inducement by the other parties or as a result of the making of any representations or warranties by such other parties with an intent to mislead or defraud or with a reckless disregard for the accuracy thereof shall not be subject to any limitations. Except as otherwise set forth in this Section 8.5, there shall be no limitations on the maximum aggregate amount of indemnifiable Losses incurred which may be recovered by a Stockholder Indemnified Party or Stockholder the Buyer Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”under Sections 8.2(b), provided that if such Parent Threshold is exceeded, (c) or (d) or by the Parent shall be liable for all Losses starting from the first dollar of such Losses and Seller Indemnified Parties under Sections 8.3(b) or (c); and
(ii) no party hereto shall have any liability under Sections 8.2 or 8.3 of this Agreement for any special or punitive damages solely to the Parent’s aggregate liability for all extent such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action damages are asserted by the Parent shall result Sellers or the Buyers directly against one another and not in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsconnection with any third-party claim.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for For all purposes of determining the amount of Loss for which a Party this Article VIII, “Losses” shall be entitled net of the actual dollar benefit paid to recover the Buyers or the Sellers, as applicable, pursuant to this Article 10 any insurance policies (or replacements thereof) of the Buyers or the Sellers, as applicable. The Buyers and the application Sellers shall, or shall cause the applicable Indemnified Party to, use commercially reasonable efforts to seek full recovery under all insurance policies (or replacements thereof) of the Threshold Buyers or the Sellers, as applicable, covering any Loss to the same extent as they would if such Loss were not subject to indemnification hereunder. Notwithstanding anything to the contrary in the foregoing, to the extent that the policy limits of such insurance policies are exhausted at any time, and the Parent ThresholdBuyers or the Sellers, as applicable, become liable and are required to pay any amounts to any Person that would otherwise have been within the limits of such insurance policies had such party not been required under this Section 8.5(c) and not for purposes to seek recovery under such insurance policies instead of determining whether a breach of seeking indemnification from the representation has occurredother party, then the amount of such liability in excess of the policy limits of such insurance policies (up to a maximum amount equal to the indemnifiable Losses of the applicable Indemnified Party) shall not be deemed to have been “paid” to the Buyers or the Sellers, as applicable, for purposes of this Section 8.5(c), and such party may seek indemnification pursuant to Sections 8.2 or 8.3, as applicable, against the other party. The Buyers and the Sellers shall use their commercially reasonable efforts to cause the insurance companies issuing their respective insurance policies to waive any rights of subrogation with respect to the other parties, to the extent not prohibited by the terms of such policies.
(d) The Buyers and the Sellers shall cooperate with each other with respect to resolving any claim, liability or Loss for which indemnification may be required hereunder, including by making, or causing the applicable Indemnified Party to make, all reasonable efforts to mitigate any such claim, liability or Loss. In the event that the Buyers or the Sellers shall fail to make such reasonable efforts, then notwithstanding anything else to the contrary contained herein, the other party shall not be determined without limitation by required to indemnify any Person for any claim, liability or Loss that could reasonably be expected to have been avoided if such Material Adverse Effect or materiality qualificationsefforts had been made.
Appears in 1 contract
Sources: Asset Purchase Agreement (Martha Stewart Living Omnimedia Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be Notwithstanding anything to the contrary herein and subject to the following limitations: provisions of Section 10.9, the Indemnifying Securityholders shall not be liable under Section 8.1(a) (other than with respect to breach or inaccuracy of the Fundamental Representations or in the case of common law actual fraud, including a scienter requirement; it being understood that such exception shall only apply to any Indemnifying Securityholder to the extent it participate in, or had knowledge of such fraud) (i) the Representative shall have no liability for claims made under Section 10.01 unless and until the aggregate amount of Losses the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000would otherwise recover under Section 8.1(a) exceed on a cumulative basis [***] (the “Threshold”), provided that if such Threshold is exceeded, in which event the Representative Indemnifying Securityholders shall be liable responsible for all only the amount of Losses starting from in excess of the first dollar of such LossesThreshold, subject to the other limitations set forth in this Agreement or (ii) the Representative’s for aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced Losses in Schedule 4.10 (other than Schedule 4.10(b)) excess of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10[***].
(b) The Parent liability Notwithstanding anything to the contrary in this Agreement, except with respect to claims for all claims made equitable relief pursuant to Section 10.9, the remedies provided under Section 10.02 this Article VIII shall be subject the sole and exclusive remedies available with respect to the following limitations: (i) the claims by any Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from under or arising out of any fraudulent misrepresentations this Agreement or fraudulent action by the Parent shall result in the Parent being liable otherwise relating to the Stockholder Indemnified Party transactions contemplated hereby, whether for breach of representation, warranty, covenant or Stockholder Indemnified Parties agreement or otherwise. Nothing in this Section 8.2 shall be construed to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionslimit a party’s rights under Section 10.9.
(c) In no event shall the event aggregate liability of an Indemnifying Securityholder under Section 8.1 (other than in the case of common law actual fraud, including a breach scienter requirement; it being understood that such exception shall only apply to any Indemnifying Securityholder to the extent it participate in, or had knowledge of such fraud) exceed (i) the cash proceeds and Parent Ordinary Shares actually received by a Party such Indemnifying Securityholder under this Agreement, (ii) any amount paid by Parent to the Scheduled Securityholder on behalf of any representation or warranty given or made by that Party the Company pursuant to Section 2.7(d) and (iii) Parent’s right of set-off described in Section 8.2(d).
(d) Notwithstanding anything in this Agreement to the contrary, in the event that it is qualified so finally determined in accordance with this Article VIII that a Parent Indemnified Party is entitled to indemnification, Parent and its Affiliates (which, from and after the Closing shall include the Company and any Subsidiaries) shall have the right, but shall not be obligated to, set off, against any Contingent Payment due to the Scheduled Securityholder under this Agreement, any amounts to which the Parent Indemnified Parties are entitled to indemnification pursuant to, and subject to the limitations set forth in, this Article VIII, applying such amounts in satisfaction, to the extent of such amount, of such owed amounts.
(e) To the extent a Parent Indemnified Party is entitled to recovery from an Indemnifying Securityholder hereunder, such Indemnifying Securityholder may, at its election and subject to any restrictions applicable under Swiss law, satisfy such claim in cash or through the delivery of Parent Ordinary Shares.
(f) If Parent Ordinary Shares are used to satisfy indemnification obligations hereunder, the number of shares shall be based on the Parent Trading Price as to only of the date of such determination; provided that the Parent Trading Price determined in such manner shall not be deemed breached if to be less than Parent Trading Price as of the representation would have a Material Adverse Effect on a Party or is otherwise qualified as Closing Date. Notwithstanding the preceding sentence, to “materiality” or “in any material respect,” then for purposes the extent such Indemnifying Securityholder has transferred such shares following the date of determining acquisition of such shares from Parent, the amount number of Loss for which a Party shares shall be entitled to recover pursuant to this Article 10 (and based on the application Parent Trading Price as of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount date of such Loss determination with respect to any Parent Ordinary Shares issued as Closing Parent Stock Consideration that have been held by the Indemnifying Securityholder since they were issued by Parent to such Indemnifying Securityholder.
(g) No Indemnifying Securityholder shall be determined without limitation by such Material Adverse Effect or materiality qualificationsliable for more than its Pro Rata Share of any Losses subject to indemnification under Section 8.1.
Appears in 1 contract
Sources: Agreement and Plan of Merger (VectivBio Holding AG)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be rights of Parent Indemnified Parties and the Stockholder Indemnified Parties to indemnification pursuant to the provisions of this Article VIII are subject to the following limitations: :
(ia) Notwithstanding anything to the Representative shall have no liability contrary herein, except for claims made under Section 10.01 until the aggregate amount in respect of the Losses incurred breach of any Company Fundamental Representation or fraud or intentional misrepresentation, no claims for indemnification by a any Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000pursuant to Section 8.02(a) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Lossesso asserted, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant recover Losses, unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 $500,000 (the “Deductible”), and then only to the extent not capable of being paid by such Losses exceed the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Deductible.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything to the following limitations: (i) the Parent shall have no liability contrary herein, except for such claims until the aggregate amount in respect of the Losses incurred breach of any Parent Fundamental Representation or fraud or intentional misrepresentation, no claims for indemnification by a any Stockholder Indemnified Party or pursuant to Section 8.03(a) shall be so asserted, and no Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover Losses, 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 then only to the extent such Losses exceed the Deductible.
(c) With respect to indemnification for Losses pursuant to Section 8.02(j), Parent Indemnified Parties shall be entitled to recover one hundred percent (100%) of its Losses until the aggregate amount of Losses payable pursuant to Section 8.02(j) exceeds on a cumulative basis an amount equal to $10,000,000. After such Losses payable pursuant to Section 8.02(j) exceeds on a cumulative basis an amount equal to $10,000,000, Parent Indemnified Parties shall be entitled to recover only eighty percent (80%) of its Losses with respect to any indemnification claims made by Parent Indemnified Parties pursuant to Section 8.02(j).
(d) The amount of any Loss subject to indemnification under Sections 8.02 or 8.03 shall be calculated net of any insurance proceeds, indemnity payments or other reimbursements actually received by the Indemnitee (net of any reasonably anticipated premium increases or costs of enforcement). The Indemnitee shall use commercially reasonable efforts to pursue recovery under insurance policies covering any Loss; provided, that, Parent shall have no obligation to pursue recovery under such insurances policies if Parent reasonably believes that the premium increases would be material. In the event that an insurance recovery, indemnity recovery or other reimbursement is actually received any Indemnitee with respect to any Loss for which any such Person has been indemnified hereunder, then, (x) to the extent that the Indemnitee is a Parent Indemnified Party, a refund equal to the aggregate amount of the actual recovery shall be made promptly to the Exchange Agent for further distribution to the Stockholders, in accordance with their respective Pro Rata Percentages, and (y) to the extent that the Indemnitee is a Stockholder Indemnified Party, a refund equal to the aggregate amount of the actual recovery shall be made promptly to Parent.
(e) Notwithstanding anything to the contrary in this Article VIII or this Agreement, except in the case of fraud or intentional misrepresentation, and subject to Section 10.01(e), in no event shall any Stockholder have any liability under this Agreement in excess of the Merger Consideration actually received by such Person pursuant to this Agreement.
(f) Notwithstanding anything to the contrary in this Article 10 VIII or this Agreement, except in the case of fraud or intentional misrepresentation, in no event shall Parent have any liability under this Agreement (and x) in excess of an aggregate amount equal to the application aggregate value of the Threshold and Indemnity Escrow Amount (based on the Final Closing Date Price), with respect to Losses arising under Section 8.3(a) (except for any such Losses arising from breaches of Parent ThresholdFundamental Representations) and not for purposes arising from indemnification claims made by Stockholder Indemnified Parties prior to the date that is the Initial Escrow Release Date, (y) in excess of determining whether a breach an aggregate amount equal to fifty percent (50%) of the representation has occurredaggregate value of the Indemnity Escrow Amount (based on the Final Closing Date Price), with respect to Losses arising under Section 8.3(a) (except for any such Losses arising from breaches of Parent Fundamental Representations) arising from indemnification claims made by Stockholder Indemnified Parties on or after the date that is the Initial Escrow Release Date, and (z) in excess of an aggregate amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsequal to the Aggregate Initial Merger Consideration, with respect to all other Losses arising under this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Fluidigm Corp)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under amount of Losses which the Cerberus Indemnitees may recover pursuant to Section 10.01 5.2(a) shall be subject determined net of any amounts actually recovered by the Cerberus Indemnitees under any insurance policies or under any third-party contractual indemnification or rights of contribution in connection with respect to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, net of any costs or expenses (iiincluding Taxes) the Representative’s aggregate liability incurred in connection with such recovery. The Cerberus Indemnitees shall use commercially reasonable efforts to pursue recovery for all claims Losses under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) any such available insurance policies and/or contractual indemnification or rights of the Company Disclosure Schedules shall constitute a contribution for any Loss for which a Parent Indemnified Party shall be entitled to recovery Cerberus Indemnitee seeks indemnification pursuant to this Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (5.7 to the extent reasonably collectable; provided, that the pursuit of any such recovery shall not capable of being paid by the Representative) unless that Company Stockholder directly participated in the be a condition or prerequisite to making of fraudulent misrepresentations a claim for indemnification, or the taking receipt of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Companyindemnification payments, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Section 5.7.
(b) The Parent liability for all claims made Cerberus Indemnitees shall not be entitled to recover any Losses under Section 10.02 shall be subject 5.2(a) (other than with respect to the following limitations: (iFundamental Representations) the Parent shall have no liability for such claims until unless the aggregate amount of all such Losses exceeds on a cumulative basis an amount equal to $10,000, at which time the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Buyer Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for entitled to recover the full amount of all Losses starting from the first dollar in excess of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions10,000.
(c) In no event shall Shareholders’ aggregate liability under (i) Section 4.5(a) (other than with respect to the event Fundamental Representations and Special Representations, which shall be subject only to the limitation in clause (ii)), collectively, exceed $100,000, or (ii) Section 4.5(a) and (b) collectively exceed $1,000,000. Notwithstanding anything herein to the contrary, there shall be no maximum liability for Shareholders with respect to any actual fraud of a breach by a Party of any representation or warranty given or made by that Party Shareholders in connection with this Agreement that is qualified so as or the transactions consummated in connection herewith, or with respect to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then liability for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurredrepresentations in Section 3.1. Notwithstanding anything herein to the contrary, Shareholders shall not be liable for any actual fraud of any other Person, other than BVI NewCo 1, BVI NewCo 2 or its Subsidiaries prior to the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsClosing.
Appears in 1 contract
Sources: Stock Purchase Agreement (Cerberus Cyber Sentinel Corp)
Limitations on Indemnification. (a) The RepresentativeNotwithstanding anything to the contrary contained in this Agreement, the obligations of an Indemnifying Party to indemnify an Indemnified Party and the Indemnified Party’s liability for all claims made right to collect Damages under Section 10.01 any theory of law or equity, shall be subject to the following limitations: limitations set forth below:
(ia) the Representative 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 liability obligation for claims made under 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 reasonable detail the nature of the Claim.
(b) Seller shall not be obligated to indemnify a Purchaser Indemnified Party for any Damages with respect to any Claim pursuant to Section 10.01 13.2(a) until the aggregate amount of the Losses such Damages suffered or incurred by a Parent Purchaser Indemnified Party or Parent Indemnified Parties exceeds Twenty-Five Million Thousand Dollars ($5,000,000) (the “Threshold”25,000.00), provided and only to the extent that if such Threshold is exceededDamages exceed Twenty-Five Thousand Dollars ($25,000.00); provided, however, that (i) the Representative foregoing limitation shall be liable for all Losses starting from the first dollar of computed without regard to any qualification or exception contained in such Lossesrepresentation or warranty relating to materiality or Material Adverse Effect, and (ii) the Representative’s aggregate liability for all claims under Section 10.01 foregoing limitation shall not exceed Fifty Million Dollars ($50,000,000) apply to Claims with respect to the representations and (iii) no item relating warranties contained in Sections 4.1, 4.2 and 4.4. Purchaser or New Operator shall not be obligated to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute indemnify a Loss for which a Parent Seller Indemnified Party shall be entitled for any Damages with respect to recovery any Claim pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative13.3(a) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses such Damages suffered or incurred by a Stockholder Seller Indemnified Party or Stockholder Indemnified Parties exceeds Twenty-Five Million Thousand Dollars ($5,000,000) (the “Parent Threshold”25,000.00), provided and only to the extent that if such Parent Threshold is exceededDamages exceed Twenty-Five Thousand Dollars ($25,000.00); provided, however, that (i) the Parent foregoing limitation shall be liable for all Losses starting from the first dollar of computed without regard to any qualification or exception contained in such Losses representation or warranty relating to materiality or material adverse effect, and (ii) the Parent’s aggregate liability for all such claims foregoing limitations shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable apply to Claims with respect to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsrepresentations and warranties contained in Sections 5.1, 5.2 and 5.3.
(c) In Except in cases of intentional or reckless fraud or willful misconduct or Claims with respect to the representations and warranties contained in Sections 4.1, 4.2 and 4.4, the aggregate liability of Seller for Damages under this Agreement with respect to any Claim pursuant to Section 13.2(a) shall in no event exceed the Purchase Price. Except in cases of a breach by a Party intentional or reckless fraud or willful misconduct or Claims with respect to the representations and warranties contained in Sections 5.1, 5.2 and 5.3, the aggregate liability of Purchaser or New Operator for Damages under this Agreement with respect to any Claim pursuant to Section 13.3(a) shall in no event exceed $1,000,000.
(d) Seller shall not be required to indemnify or pay Purchaser or New Operator for that part of any representation or warranty given or made by Damages that Party in this Agreement are actually recovered under any policy of insurance, including the Title Policy; provided, however, that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party nothing herein shall be entitled construed to recover pursuant obligate any Purchaser Indemnified Party to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsproceed against any insurance policy prior to asserting an indemnification claim against Seller.
Appears in 1 contract
Limitations on Indemnification. With respect to indemnification for any Claims payable under Section 11.1(a), (b), (c) and (d):
(a) The Representative’s except as provided in this Section 11.2, Sellers and Seller Controlling Party shall not have any liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until 11.1 unless the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent to all Chardan Indemnified Parties exceeds Five Million Dollars the Seller Basket;
($5,000,000b) except as provided in this Section 11.2, Chardan and, after the Closing, DAL and the Newly-Formed LLCs, shall not have any liability under Section 11.1 unless the aggregate amount of Losses to all ▇▇▇▇▇ Indemnified Parties exceeds the Chardan Basket;
(c) except as provided in this Section 11.2, FlatWorld, Gupta and ▇▇▇▇▇▇▇ shall not have any liability under Section 11.1 unless the “Threshold”aggregate amount of Losses to all ▇▇▇▇▇ Indemnified Parties and Chardan Indemnified Parties exceeds the FlatWorld Basket;
(d) notwithstanding Section 11.2(a), provided that if such Threshold is once the amount of the Seller Basket has been exceeded, each Seller and the Representative Seller Controlling Party, jointly and severally, shall be liable for all Losses starting from the first dollar of such subsequent Losses, (ii) subject to Section 11.2(g), to Chardan Indemnified Parties, and the Representative’s aggregate liability for all claims under Section 10.01 Seller Basket limitation shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating apply to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.such subsequent Losses;
(be) The Parent liability for all claims made under notwithstanding Section 10.02 shall be subject to 11.2(b), once the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is Chardan Basket has been exceeded, the Parent Chardan shall be liable for all Losses starting from subsequent Losses, subject to Section 11.2(h), to ▇▇▇▇▇ Indemnified Parties, and the first dollar Chardan Basket limitation shall not apply to such subsequent Losses;
(f) notwithstanding Section 11.2(c), once the amount of such Losses the FlatWorld Basket has been exceeded, FlatWorld, Gupta and (ii) the Parent’s aggregate liability ▇▇▇▇▇▇▇ shall be liable for all such claims subsequent Losses, subject to Section 11.2(i), to ▇▇▇▇▇ Indemnified Parties and the Chardan Indemnified Parties, and the FlatWorld Basket limitation shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable apply to such subsequent Losses;
(g) notwithstanding anything to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party contrary contained in this Agreement that is qualified so (except as to only be deemed breached if provided in the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes proviso at the end of determining the amount this clause (g)), no amounts of Loss for which a Party indemnity shall be entitled payable by any Seller or Seller Controlling Party as a result of a Claim arising under Section 11.1(a) which exceeds, in the aggregate, the Seller Indemnity Cap, to recover pursuant the extent of such excess; provided that Seller Basket and Seller Indemnity Cap shall not apply to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a extent that any Claims or Losses are due to breach of the representation has occurredRestrictive Covenants, and Sections 9.5, 3.1(b) and (e) (Authority and Ownership, etc.), 4.3 (Taxes), 4.10(a) (Assets) and 4.12 (Brokerage), any fraud by any Seller or Seller Controlling Party, any pre-Closing Taxes to the extent provided in Section 11.1(a)(iv) and, with respect to Claims or Losses against the Sellers (but not the Seller Controlling Party), Sections 9.4, 4.8 (Employees; Labor Disputes), 4.10(b) (Assets), 4.11 (Environmental Laws and Regulations), 4.13 (Employee Benefit Plans) or any Claims with respect to Nonassumed Liabilities (as defined in the Contribution Agreement);
(h) notwithstanding anything to the contrary contained in this Agreement, no amounts of indemnity shall be payable by Chardan as a result of a Claim arising under Section 11.1(c) which exceeds, in the aggregate, the amount Chardan Indemnity Cap, to the extent of such Loss excess; provided that Chardan Basket and Chardan Indemnity Cap shall not apply to the extent that any Claims or Losses are due to breach of Sections 6.1(b)(i) (Capitalization), 6.1(c) (Authority), 6.16 (Brokerage) and 6.6 (Taxes), any fraud by Chardan or any Claims arising after the Closing Date with respect to Assumed Liabilities (as defined in the Contribution Agreement); and
(i) notwithstanding anything to the contrary contained in this Agreement, no amounts of indemnity shall be determined without limitation payable by FlatWorld, Gupta or ▇▇▇▇▇▇▇ as a result of a Claim arising under Section 11.1(b) which exceeds, in the aggregate, the FlatWorld Indemnity Cap, to the extent of such Material Adverse Effect excess; provided that FlatWorld Basket and FlatWorld Indemnity Cap shall not apply to the extent that any Claims or materiality qualificationsLosses are due to breach of Sections 5.1(g) (Conduct of Business), and 5.1(i) (Taxes), any fraud by FlatWorld, Gupta or ▇▇▇▇▇▇▇, or any Losses under Section 11.1(b)(iii) above.
Appears in 1 contract
Sources: Master Acquisition Agreement (Chardan 2008 China Acquisition Corp.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything contained in this Agreement to the following limitations: contrary, (i) Circuit City, FNANB and Tyler Funding shall not be liable in the Representative shall have no liability aggregate for claims made under any amounts for which Purchaser Indemnified Parties are otherwise entitled to indemnification pursuant to Section 10.01 until 10.02(iii) unless (x) a claim is timely asserted during the survival period specified in Section 10.01(a), and (y) the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent all Damages for which Purchaser Indemnified Parties exceeds Five Million Dollars (are entitled to indemnification pursuant to Section 10.02(iii) exceeds, on a cumulative basis, $5,000,000) 5 million (the “Threshold”"Deductible"), provided that if such Threshold is exceeded, and then only to the Representative shall be liable for all Losses starting from the first dollar extent of such Lossesexcess, and (ii) the Representative’s aggregate liability for all claims under Section 10.01 Circuit City, FNANB and Tyler Funding shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating be required to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery make indemnification payments pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (10.02(iii) to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated indemnification payments thereunder would exceed in the making of fraudulent misrepresentations or aggregate $125 million (the taking of fraudulent actions by the Company or any "Cap"). The limitations contained in this Section 10.05(a) shall not apply in respect of the parties referred to in the definition first sentence of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Section 5.14.
(b) The Parent liability Notwithstanding anything contained in this Agreement to the contrary, (i) Purchaser shall not be liable for any amounts for which Seller Indemnified Parties are otherwise entitled to indemnification pursuant to Section 10.03(ii) unless (x) a claim is timely asserted during the survival period specified in Section 10.01(a) and (y) the aggregate amount of all claims made under Damages for which Seller Indemnified Parties are entitled to indemnification pursuant to Section 10.02 10.03(ii) exceeds, on a cumulative basis, the Deductible, and then only to the extent of such excess, and (ii) Purchaser shall not be required to make indemnification payments pursuant to Section 10.03(ii) to the extent indemnification payments thereunder would exceed in the aggregate the Cap.
(c) Other than with respect to a breach of Section 7.04, in determining the foregoing Deductible and in otherwise determining the amount to which Indemnified Parties are entitled to assert a claim for indemnification pursuant this Article X, no claim for indirect, incidental, exemplary, special, consequential or punitive damages, lost profits or opportunity costs shall be subject to taken into account.
(d) Indemnity Payments shall be paid in immediately available funds within ten (10) Business Days after the following limitations: later of (i) the Parent shall have no liability for such claims until the aggregate amount receipt of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting written request from the first dollar of party entitled to such Losses Indemnity Payment and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except date of payment of the amount that Losses resulting from or arising out is the subject of any fraudulent misrepresentations or fraudulent action the Indemnity Payment by the Parent party entitled to receive the Indemnity Payment, except to the extent contested by the Indemnifying Party. All such Indemnity Payments shall result be made to the designated account of, and in the Parent being liable manner specified in writing by, the party entitled to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsIndemnity Payments.
(ce) In the event For purposes of indemnification under this Article X, a breach or inaccuracy of a breach by a Party of any representation representation, warranty, covenant or warranty given or made by that Party agreement contained in this Agreement that is qualified Agreement, shall be deemed to occur or exist if such representation, warranty, covenant or agreement would have been so breached or inaccurate if it had not contained any limitation or qualification as to only be deemed breached if materiality or the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then Party's Knowledge; provided, however, that Section 5.19 shall for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to indemnification under this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall X be determined without limitation qualified by such Material Adverse Effect or materiality qualificationsas set forth therein.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Circuit City Stores Inc)
Limitations on Indemnification. (a) The Representative’s liability Sellers will have no Liability with respect to the matters described in Section 7.1(a) and 7.1(h) until the total of all Losses with respect to such matters exceeds $500,000 (the “Basket”), at which point Sellers will be obligated to indemnify the Buyer Indemnified Parties for all claims made under Section 10.01 shall Losses from the first dollar; provided, however, that any claim relating to any Fundamental Representation will not be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Basket.
(b) The Parent liability Buyer will have no Liability with respect to the matters described in Section 7.2(a) until the total of all Losses with respect to such matters exceeds the Basket, at which point Buyer will be obligated to indemnify the Seller Indemnified Parties for all claims made under Section 10.02 shall Losses from the first dollar; provided, however, that any claim relating to any Fundamental Representation will not be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsBasket.
(c) In Sellers’ maximum aggregate Liability with respect to the event of a breach by a Party matters described in Section 7.1(a) and 7.1(h) shall not exceed $10,000,000 (the “Cap”); provided, however, that any claim relating to any Fundamental Representation will not be subject to or counted towards the Cap.
(d) Buyer’s maximum aggregate Liability with respect to the matters described in Section 7.2(a) shall not exceed the Cap; provided, however, that any claim relating to any Fundamental Representation will not be subject to or counted towards the Cap; provided, further, that Buyer’s maximum Liability with respect to the matters described in Section 7.2 will not exceed an aggregate amount, which, if added to all other amounts paid under Section 7.2, is equal to the Closing Consideration.
(e) The indemnification provided for in this ARTICLE VII is not intended and shall not be deemed to limit, condition, reduce or supplant the primary availability of any representation or warranty given or made by insurance that Party would be available in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes absence of determining the such indemnification. The amount of any Loss for which a Party indemnification is provided under this ARTICLE VII shall be entitled to recover pursuant to this Article 10 (and the application net of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of any insurance proceeds actually received by any Indemnified Party as an offset against such Loss after deducting any related costs and expenses (including Taxes), including the aggregate cost (including attorneys’ fees) of pursuing any related insurance claims and any related increases in insurance premiums or other chargebacks. The pendency of an insurance claim or the potential availability of insurance coverage shall be determined without limitation not relieve Sellers or Buyer of their respective obligations to pay Losses when and as incurred by such Material Adverse Effect an Indemnified Party.
(f) The limitations set forth in this Section 7.4 will not apply to Losses arising out of or materiality qualificationsrelating to Fraud.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Benson Hill, Inc.)
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) The Representative’s Seller shall not have any liability under Section 8.01(a) unless the aggregate liability for all claims made Losses suffered by Purchaser Indemnitees thereunder exceeds $200,000 (the “Deductible”), and then only to the extent of such excess and (b) Seller’s aggregate maximum liability under Section 10.01 8.01(a) shall be subject not exceed an amount equal to fifteen percent (15%) of the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until of the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) Cash Payments that Purchaser has actually paid to Seller (the “ThresholdCap”) (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 under Section 8.01(a) or Purchaser under Section 8.02(a), provided that if such Threshold is exceededin each case, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars the aggregate amount of Cash Payments that Purchaser has actually paid to Seller, ($50,000,000b) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant subject to Section 10.01. No Company Stockholder 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 claim for such Loss was timely submitted pursuant to the provisions of this Article VIII; (c) neither Party shall be liable for any claims made under Section 10.01 (Losses to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations Purchaser Indemnitees or the taking Seller Indemnitees, as applicable, 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 fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall Losses that would not have any limitation on its liability under this Article 10.
been incurred had such Purchaser Indemnitees or Seller Indemnitees, as applicable, mitigated in accordance with applicable Laws); (bd) The Parent liability for all claims made under Section 10.02 neither Party shall be subject liable for any Loss to the following limitations: extent arising from (i) a change in accounting or taxation Law, policy or practice made after the Parent Closing, other than a change required to comply with any Law, policy or practice in effect on the date of this Agreement, or (ii) any Law not in force on the date of the Closing or any change in Law which takes effect retroactively or occurs as a result of any 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 have no 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 the Indemnified Party timely in accordance with Section 8.08, failing which such claim shall be waived and extinguished; and (f) Seller’s aggregate maximum liability for such claims until 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 the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) Cash Payments that Purchaser has actually paid to Seller (the “Parent ThresholdExcluded Losses Cap”)) (it being understood that, provided that if such Parent Threshold is exceededso long as a Purchaser Indemnitee makes a claim for indemnification pursuant to Section 8.01 within the time proscribed pursuant to Section 8.08, the Parent shall be liable for all fact that the Excluded Losses starting from the first dollar recoverable in respect of such Third Party Claim exceed the Excluded Losses and (ii) the Parent’s aggregate liability for all such claims Cap as of a particular time shall not exceed $35,000,000; except that preclude such Purchaser Indemnitee from recovering such Excluded Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party extent such Excluded Losses Cap increases by virtue of Purchaser making one or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsmore Milestone Payments).
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Sources: Stock Purchase Agreement (Dova Pharmaceuticals, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) the Representative Diageo Indemnifying Parties shall have no liability for claims made under indemnification pursuant to clause (i) of Section 10.01 until 9.2(a) with respect to Covered Losses for which indemnification is provided thereunder, unless such Covered Losses exceed in the aggregate amount of $100 million, in which case the Losses incurred by a Parent Indemnified Party or Parent Indemnified Diageo Indemnifying Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all such Covered Losses starting from the first dollar in excess of such Lossesamount; PROVIDED, (ii) that the Representative’s aggregate Diageo Indemnifying Parties shall have no liability for all such Covered Losses (and such Covered Losses will not be aggregated for purposes of such $100 million) in connection with any individual claim or series of related claims under Section 10.01 shall not exceed Fifty Million Dollars (unless the aggregate amount of Covered Losses associated with such claim or series of related claims exceeds $50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 105 million.
(b) The Parent General ▇▇▇▇▇ Indemnifying Parties shall have no liability for all claims made under Section 10.02 shall be subject indemnification pursuant to the following limitations: clause (i) of Section 9.3(a) with respect to Covered Losses for which indemnification is provided thereunder, unless such Covered Losses exceed in the Parent aggregate $100 million, in which case the General ▇▇▇▇▇ Indemnifying Parties shall be liable for all such Covered Losses in excess of such amount; PROVIDED, that the General ▇▇▇▇▇ Indemnifying Parties shall have no liability for such Covered Losses (and such Covered Losses will not be aggregated for purposes of such $100 million) in connection with any individual claim or any series of related claims until unless the aggregate amount of the Covered Losses incurred by a Stockholder Indemnified Party associated with such claim or Stockholder Indemnified Parties series of related claims exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions5 million.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
Appears in 1 contract
Sources: Merger Agreement
Limitations on Indemnification. 9.6.1. Other than any breach of or inaccuracy in any Fundamental Representation, indemnification for which shall be as provided below, no Indemnifying Party shall be required to indemnify an Indemnified Party hereunder for any Losses pursuant to Section 9.2.1 or 9.3.1, as applicable (such Losses pursuant to Section 9.2.1 or 9.3.1, as applicable, being collectively referred to herein as “General Representation and Warranty Losses”) except to the extent that the aggregate amount of such General Representation and Warranty Losses for which the Indemnified Party is otherwise entitled to indemnification pursuant to this Article 9 exceeds Two Hundred Fifty Thousand Dollars ($250,000), in which event the Indemnifying Party shall be required to pay or be liable for all such General Representation and Warranty Losses from the first dollar thereof. In addition, subject to the other indemnity procedures in this Article IX, all Fundamental Losses and Purchase Price-Limited Losses shall be indemnified from the first dollar by the Indemnifying Parties.
9.6.2. The aggregate amount payable by all Indemnifying Parties in respect of General Representation and Warranty Losses and Fundamental Losses (other than Excess Fundamental Losses) shall not exceed an amount equal to Five Hundred Thousand Dollars ($500,000) (the “General Representation and Warranty Cap”); provided that the General Representation and Warranty Cap shall not in any way limit the amount that Purchaser may recover under the R&W Insurance Policy.
9.6.3. The Purchaser Indemnified Parties agree that the R&W Insurance Policy shall expressly exclude any right of subrogation against the Company and Sellers under this Agreement (except for claims of fraud as defined in the R&W Insurance Policy). Except with respect to Purchase Price-Limited Losses, Excess Fundamental Claims or claims based on Fraud, (a) The Representative’s liability the Purchaser Indemnified Parties’ sole recourse for all any aggregate Losses resulting from, or that exists or arises due to any inaccuracy in or breach of any of the representations and warranties contained in this Agreement (including claims made brought under Section 10.01 shall be 9.2.1 and in each case subject to the following limitations: limitations contained elsewhere in this Section 9.6) (an “R&W Loss”) shall be from (i) the Representative shall have no liability for claims made under Section 10.01 until Escrow Amount remaining (if any) at the aggregate amount of time the Losses incurred R&W Loss is determined to be due and owing by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”)any Seller, provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims proceeds (if any) that may be available under the R&W Insurance Policy (if any), and (b) the Purchaser Indemnified Parties shall not exceed $35,000,000otherwise have any recourse against the Company or any Seller with respect to any such R&W Loss covered in clause (a) immediately above, regardless as to whether the R&W Insurance Policy has expired, been terminated or lapsed.
9.6.4. After the Escrow Amount has been fully used, if any Losses sustained by an Indemnified Party are covered by an insurance policy (including the R&W Insurance Policy) or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Indemnified Party), the Indemnified Party shall use reasonable efforts to collect such insurance proceeds or indemnity, contribution or similar payments; except provided that Losses resulting from the foregoing reasonable efforts shall not require the Indemnified Party to initiate or arising out otherwise pursue any litigation to collect such insurance proceeds or indemnity, contribution or similar payments as a condition to seeking any other recovery available to the Indemnified Party pursuant to this Article 9. The amount of any fraudulent misrepresentations Losses subject to indemnification under Section 9.2.1 or fraudulent action 9.3.1 shall be reduced by the Parent shall result in the Parent being liable to the Stockholder amounts actually recovered by any Indemnified Party for such Losses (i) under applicable insurance policies (including the R&W Insurance Policy), or Stockholder Indemnified Parties to the full extent (ii) as a result of the Stockholder an indemnification, contribution or similar obligation of another Person. If any Indemnified Party receives such insurance proceeds or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations indemnity, contribution or fraudulent actions.
(c) In similar payments after the event of a breach settlement by a the Indemnifying Party of any representation indemnification claim under Section 9.2.1 or warranty given or made by that 9.3.1, as applicable, such Indemnified Party in this Agreement that is qualified so as shall refund to only be deemed breached if the representation would have a Material Adverse Effect on a Indemnifying Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a such insurance proceeds or indemnity, contribution or similar payments, up to the amount received from the Indemnifying Party in connection with such indemnification claim. It is the intention of the parties hereto that no insurer or third party shall be entitled to any benefit or right it would not be entitled to receive in the absence of this paragraph.
9.6.5. Notwithstanding anything to the contrary contained in this Agreement or provided for under any applicable Law and other than as a result of Fraud, no party hereto shall be liable to any other Person, either in contract or in tort, for (and Losses shall not include) any loss of profits or any consequential, incidental, exemplary, indirect, special or punitive damages of such other Person, including loss of future revenue, income or profits, or any diminution of value or multiples of earnings damages relating to the breach or alleged breach hereof, whether or not the possibility of such damages has been disclosed to the other party hereto in advance or could have been reasonably foreseen by such other party hereto; provided that the foregoing provision of this Section 9.6.5 shall not limit the payment or recovery of any such amounts by a Party from the other Party hereunder to the extent any such amount is required to be paid to a third party pursuant to a Third Party Claim.
9.6.6. Notwithstanding the fact that any Indemnified Party may have the right to assert claims for indemnification under or in respect of more than one provision of this Agreement related to any fact, event, condition or circumstance, no Indemnified Party will be entitled to recover the amount of any Losses suffered by such Indemnified Party more than once under this Agreement in respect of such claims.
9.6.7. The Purchaser Indemnified Party’s right to indemnification pursuant to Section 9.2.1 shall be reduced by the amount of any reserve reflected on the Financial Statements established for the general category of items or matters similar in nature to the specific items or matters giving rise to such Loss, but only to the extent that the Purchaser received the benefit of such reserve amount in the purchase price adjustments under Section 4.3
9.6.8. Each Indemnified Party shall use reasonable efforts (determined without regard to any indemnification or escrow recovery rights, as applicable, of such Person hereunder (i.e., as if such Person had no such rights hereunder)) to mitigate any Loss for which such Indemnified Party seeks indemnification, and each Indemnified Party shall, and shall cause its Affiliates to, use reasonable efforts to pursue any and all rights or benefits (including rights to be indemnified and held harmless or rights to be reimbursed for, or to share, certain costs, expenses or Taxes) with respect to any matter that is indemnifiable pursuant to Section 9.2.1 or 9.3.1; provided that an Indemnified Party shall not be limited or precluded from pursuing an Indemnity Claim hereunder before or at the same time that the Indemnified Party is engaged in any such mitigation efforts or the pursuit of any such rights or benefits.
9.6.9. Any indemnification payment made pursuant to Article 9 of this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes.
9.6.10. Except for claims for Fraud and claims arising under Article 10, the aggregate amount payable by all Indemnifying Parties in respect of all Losses shall not exceed an amount equal to the Purchase Price actually received or earned by Sellers, less amounts previously paid or to be paid by such Indemnifying Party pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss 9.
9.6.11. No Indemnifying Party shall be determined without liable for any General Representation and Warranty Losses pursuant to Section 9.2.1 or 9.3.1 unless a written claim for indemnification in accordance with this Article 9 is given by the Indemnified Party to the Indemnifying Party with respect thereto on or prior to the date that is fifteen (15) months following the Closing Date; except that this time limitation by such Material Adverse Effect shall not apply to any Losses related to or materiality qualificationsarising directly or indirectly out of any Purchase Price-Limited Losses, as to which in each case the applicable statute of limitations plus sixty (60) days shall apply.
Appears in 1 contract
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) The Representative’s Seller shall not have any liability under Section 8.01(a) unless the aggregate liability for all claims made Losses suffered by Purchaser Indemnitees thereunder exceeds $[***] (the “Deductible”), and then only to the extent of such excess and (b) Seller’s aggregate maximum liability under Section 10.01 8.01(a) shall be subject not exceed an amount equal to [***] percent ([***]%) of the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until of the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) Cash Payments that Purchaser has actually paid to Seller (the “ThresholdCap”) ([***]) and (y) (a) the aggregate maximum liability of Seller under Section 8.01(a) or Purchaser under Section 8.02(a), provided that if such Threshold is exceededin each case, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars the aggregate amount of Cash Payments that Purchaser has actually paid to Seller, ($50,000,000b) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant subject to Section 10.01. No Company Stockholder 8.09, neither Party shall have any liability for any claims made under Section 10.01 (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 claim for such Loss was timely submitted pursuant to the extent not capable provisions of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
VIII; (bc) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified neither Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all any Losses starting from to the first dollar of extent the Purchaser Indemnitees or the Seller Indemnitees, as applicable, failed to mitigate such Losses and in accordance with applicable Laws (provided, that, for clarity, this clause (c) shall only relieve a Party to the extent of any Losses that would not have been incurred had such Purchaser Indemnitees or Seller Indemnitees, as applicable, mitigated in accordance with applicable Laws); (d) neither Party shall be liable for any Loss to the extent arising from (i) a change in accounting or 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 of this Agreement, or (ii) any Law not in force on the Parent’s aggregate liability date of the Closing or any change in Law which takes effect retroactively or occurs as a result of any 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 all such claims shall not exceed $35,000,000; except that Losses resulting from or any otherwise indemnifiable Loss arising out of any fraudulent misrepresentations breach of any representation, warranty, covenant or fraudulent action agreement of such Party unless a claim therefore is asserted in writing (as provided in Section 8.03) by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from timely in accordance with Section 8.08, failing which such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party claim shall be entitled to recover pursuant to this Article 10 waived and extinguished; and (and the application of the Threshold and the Parent Thresholdf) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications[***].
Appears in 1 contract
Sources: Stock Purchase Agreement (Dova Pharmaceuticals, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be 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: :
(ia) Notwithstanding anything to the Representative shall have no liability contrary herein, except for claims made under Section 10.01 until the aggregate amount in respect of the Losses incurred breach of any Company Fundamental Representation or for claims in respect of fraud or intentional misrepresentation, no claims for indemnification by a any Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000pursuant to Section 7.02(a) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Lossesso asserted, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) recover Losses, unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims and until the aggregate amount of the Losses incurred by that would otherwise be payable hereunder exceeds on a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) cumulative basis an amount equal to [***] (the “Parent ThresholdDeductible”), provided that if and to the extent such Losses exceed the Deductible, such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a 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 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, 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 of fraud or intentional misrepresentation, (i) and except in the case of any claims for breaches of Company Fundamental Representations, in no event shall any Stockholder have any liability for claims 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 10 (and VII or this Agreement, except in the application case of fraud or intentional misrepresentation, in no event shall Parent have any liability under this Agreement in excess of the Threshold 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 ThresholdIndemnified Party, by any Parent Indemnified Party or Affiliate of a Parent Indemnified Party, and (ii) and not for purposes in the case of determining whether a payment to a Stockholder Indemnified Party, by any Stockholder Indemnified Party or Affiliate of a Stockholder Indemnified Party, in each case, as a result of the circumstances giving rise to the indemnification payment, to the extent such Tax benefit actually reduces Taxes payable in the taxable year in which the indemnifiable loss is incurred; provided, however, that in the case of a payment to a Stockholder Indemnified Party, no Tax benefit realized by the Company or Parent will be taken into account.
(g) Notwithstanding anything to the contrary herein, in no event shall any Parent Indemnified Party be entitled to recover Losses in respect of a breach of a representation or warranty set forth in Section 2.08 (other than a representation or warranty set forth in Section 2.08(l)) to the representation has occurred, extent that such Losses relate or are attributable to (x) Taxes for Tax periods beginning after the amount Closing Date or attributable (under the principles set forth in the last sentence of such Loss shall be determined without limitation by such Material Adverse Effect the definition of “Pre-Closing Taxes”) to the portion of a Straddle Period beginning after the Closing Date or materiality qualifications(y) Tax Return preparation or filing requirements with respect to Tax Returns due after the Closing Date.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be rights of the Parent Indemnified Parties and the Company Stockholder Indemnified Parties to indemnification pursuant to the provisions of this Article VII are subject to the following limitations: :
(ia) Notwithstanding anything to the Representative shall have no liability contrary herein, except for claims made under Section 10.01 until the aggregate amount in respect of the Losses incurred breach of any Company Fundamental Representation or for claims in respect of fraud or intentional misrepresentation, no claims for indemnification by a any Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000pursuant to Section 7.02(a) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Lossesso asserted, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant recover Losses, unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 $1,000,000 (the “Basket”), and to the extent not capable of being paid by such Losses exceed the Representative) unless that Company Stockholder directly participated in Basket, such Parent Indemnified Party shall be entitled to recover all such Losses, including the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Basket.
(b) The Notwithstanding anything to the contrary herein, except for claims in respect of the breach of any Parent liability Fundamental Representation or for all claims made under in respect of fraud or intentional misrepresentation, no claims for indemnification by any Company Stockholder Indemnified Party pursuant to Section 10.02 7.03(a) shall be subject so asserted, and no Company Stockholder Indemnified Party shall be entitled to recover Losses, unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to the following limitations: Basket, and to the extent such Losses exceed the Basket, such Company Stockholder Indemnified Party shall be entitled to recover all such Losses, including the Basket.
(c) Notwithstanding anything to the contrary herein, except for claims in respect of the breach of any Company Fundamental Representation or for claims in respect of fraud or intentional misrepresentation, with respect to any claims for indemnification by any Parent Indemnified Party pursuant to Section 7.02(a), (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent Parties’ sole recourse shall be liable for all Losses starting from against the first dollar of such Losses Holdback Shares pursuant to Section 7.07 and its setoff rights against the Milestone Consideration pursuant to Section 7.08 and (ii) the Parent’s aggregate maximum liability of the Company Stockholders for all such claims shall not exceed $35,000,000; 3,000,000 (the “Cap”).
(d) Notwithstanding anything to the contrary herein, except that Losses resulting from or arising out for claims in respect of the breach of any fraudulent misrepresentations Parent Fundamental Representation or fraudulent action for claims in respect of fraud or intentional misrepresentation, the maximum liability of Parent for claims by the Parent shall result in the Parent being liable to the claims for indemnification by any Company Stockholder Indemnified Party or Stockholder Indemnified Parties pursuant to Section 7.02(a) shall not exceed the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsCap.
(ce) In Notwithstanding anything to the contrary contained herein, except in the case of fraud or intentional misrepresentation, in no event shall any Company Stockholder have any liability under this Agreement in excess of the Merger Consideration actually received by such Person pursuant to this Agreement.
(f) Notwithstanding anything to the contrary contained herein, except in the case of fraud or intentional misrepresentation, in no event shall Parent have any liability under this Agreement in excess of the Merger Consideration.
(g) Each Indemnitee shall use its commercially 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 (or, to the extent such Losses are Taxes, any action that might reasonably be expected to be adverse to it). No Indemnitee shall make any Table of Contents 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 by a of more than one of the representations, warranties, agreements and covenants in this Agreement.
(h) Notwithstanding anything to the contrary contained herein, neither Party shall have any liability or indemnification obligation (i) with respect to the amount of or ability to use after the Closing Date any net operating losses, Tax credits, Tax basis or other Tax attribute of Parent and its respective Subsidiaries (and neither Company nor Parent is making and shall not be construed to have made any representation or warranty given with respect to such matters), or made by that Party in this Agreement that is qualified so as (ii) for any Taxes with respect to only be deemed breached if any taxable period (or portion thereof) beginning after the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsClosing Date.
Appears in 1 contract
Sources: Merger Agreement (Capnia, Inc.)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary contained in this Agreement, with respect to any claim against the Seller Parties for Seller Warranty Breaches pursuant to Section 10.2(a): (i) the Representative Seller Parties shall have no liability not be liable for claims made under any Damages with respect thereto (other than with respect to breaches of the representations and warranties of the Seller Parties contained in Section 10.01 4.24 of this Agreement) unless and until the aggregate amount of indemnifiable Damages which may be recovered from the Losses incurred by a Parent Indemnified Party Seller Parties equals or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) 375,000 (the “ThresholdBasket”), provided that if such Threshold is exceeded, in which case 4832-2222-1976\19 the Representative Seller Parties shall be liable for all Losses starting from the first dollar full amount of such Losses, Damages; and (ii) the Representative’s maximum aggregate liability for all claims under Section 10.01 amount of indemnifiable Damages which may be recovered by the Buyer Indemnified Parties arising out of or relating to any Seller Warranty Breaches, shall not exceed Fifty Million Dollars an amount equal to $7,500,000 ($50,000,000the “Cap”); provided, that the foregoing clauses (i) and (iiiii) no item in this Section 10.5(a) shall not apply to Damages relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)A) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid Fraud by the RepresentativeSeller Parties or (B) unless that Company Stockholder directly participated in the making any breach of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in Seller Parties’ Fundamental Representations; and provided, further, that the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud foregoing clause (i) shall not have any limitation on its liability under this Article 10apply to Damages relating to a breach of or failure of Seller Parties covenants in Section 7.17, including but not limited to the payment of Delay Damages.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Notwithstanding anything to the following limitations: contrary contained in this Agreement, with respect to any claim against Buyer for Buyer Warranty Breaches pursuant to Section 10.3(a): (i) the Parent Buyer shall have no liability not be liable for such claims any Damages with respect thereto unless and until the aggregate amount of indemnifiable Damages which may be recovered from Buyer equals or exceeds the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”)Basket, provided that if such Parent Threshold is exceeded, the Parent in which case Buyer shall be liable for all Losses starting from the first dollar full amount of such Losses Damages; and (ii) the Parent’s maximum aggregate liability for all such claims amount of indemnifiable Damages which may be recovered by the Seller Indemnified Parties arising out of or relating to any Buyer Warranty Breaches, shall not exceed $35,000,000an amount equal to the Cap; except provided, that Losses resulting from the foregoing clauses (i) and (ii) in this Section 10.5(b) shall not apply to Damages relating to (A) Fraud or arising out intentional misrepresentation by the Buyer or (B) any breach of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsBuyer’s Fundamental Representations.
(c) In Notwithstanding anything to the event contrary contained in this Agreement, the Parties acknowledge and agree that (i) the maximum aggregate Liability of the Seller Parties (considered as a whole for these purposes) for all indemnification obligations under this Agreement shall not under any circumstances exceed a maximum aggregate amount equal to the Purchase Price and (ii) the maximum aggregate Liability of Buyer for all indemnification obligations under this Agreement shall not under any circumstances exceed a maximum aggregate amount equal to the Purchase Price; provided, that the foregoing clauses (i) and (ii) shall not apply to Damages relating to Fraud or intentional misrepresentation by the Seller Parties or the Buyer, as applicable.
(d) [Intentionally omitted]
(e) The amount of any Damages for indemnification hereunder shall be calculated net of any amounts actually recovered by the Indemnified Party for such Damages under any applicable insurance policies or from any third party alleged to be responsible therefor (including, for the avoidance of doubt, to the extent relating to the Construction, the Contractors) (the “Collateral Sources”), net of any costs and expenses incurred by the applicable Indemnified Party with respect to such recovery (collectively, the “Recovery Costs”). If the Indemnified Party receives any amounts from any Collateral Source for any Damages after receiving an indemnification payment from the Indemnifying Party in respect of such Damages, then the Indemnified Party shall promptly reimburse the Indemnifying Party for any such indemnification payment up to the amount actually received by the Indemnified Party from such Collateral Source, less the Recovery Costs.
(f) Solely for purposes of calculating the amount of any Damages resulting from a breach by a Party of any representation or warranty given or made by that Party in of this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as and for purposes of determining whether any such breach has occurred under this Article X, all limitations and qualifications relating to “materiality” or “Material Adverse Effect” contained in any material respect,” then representation or warranty 4832-2222-1976\19 of this Agreement (other than Section 4.5(a)) or in any certificate or other instrument delivered pursuant hereto or in connection herewith shall be disregarded.
(g) Subject to the other limitations set forth in this Article X, in the event that any Buyer Indemnified Party has a claim for purposes of determining indemnification against the amount of Loss Seller Parties for which a Damages under this Article X, the Buyer Indemnified Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss Damages (i) first from the Indemnity Escrow Fund and (ii) to the extent (A) the amount of Damages exceeds the value of the then-remaining Indemnity Escrow Fund and (B) Buyer is otherwise permitted, in accordance with the terms and conditions of this Agreement, to make an indemnification claim for amounts in excess of then-remaining balance of the Indemnity Escrow Fund, then, from the Seller Parties directly, jointly and severally. Further, in the event that any Buyer Indemnified Party has a claim for indemnification against the Seller Parties for Damages under Section 4.24 or Section 7.17 (or as an Excluded Liability relating to the substance of Section 4.24 or Section 7.17) the Buyer Indemnified Party shall use commercially reasonable efforts to recover the amount of such Damages (i) first from the Contractor whose breach of warranty gave rise to the Damages, (ii) second from the Indemnity Escrow Fund and (iii) to the extent the amount of Damages exceeds the value of the then remaining Indemnity Escrow Fund, then, from the Seller Parties directly, jointly and severally.
(h) Each Indemnified Party shall use commercially reasonable efforts to mitigate any Damages for which such Indemnified Party seeks indemnification under this Article X, it being understood that any reasonable out-of-pocket costs and expenses incurred by such Indemnified Party in connection with such mitigation shall constitute Damages that may be recovered hereunder.
(i) Any Damages for indemnification hereunder shall be determined without limitation duplication of recovery by reason of the state of facts giving rise to such Material Adverse Effect Damages constituting a breach of more than one representation, warranty, covenant or materiality qualificationsagreement contained in this Agreement.
(j) The Buyer Indemnified Parties will not have the right to indemnification under this Agreement for any Damages to the extent such Damages are based on Taxes: (i) for taxable periods beginning on or after the Closing Date, or (ii) resulting from transactions or actions taken by Buyer on or after the Closing Date.
(k) The Parties acknowledge and agree that under no circumstances shall the Seller Parties or any of their respective Affiliates (other than, for the avoidance of doubt, THL) have any liability or obligation arising out of or relating to the Voting Agreement or the Non-Solicitation Agreement.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 No Indemnified Party shall be subject entitled to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 indemnification pursuant to Article 6 unless and until the aggregate amount of all Losses for which indemnification would (but for the Losses incurred limitation of this sentence) be required to be paid by a Parent Indemnified the Indemnifying Party or Parent Indemnified Parties under Article 6 of this Agreement (collectively, “Indemnity Obligations”) exceeds Five Million Dollars ($5,000,000) 200,000 (the “Loss Threshold”), provided that if the aggregate Losses for which indemnification is required to be paid shall exceed such Threshold is exceededsum then only those Losses in excess thereof shall be payable. If an Indemnifying Party pays indemnification (including without limitation, the Representative shall cost of defending a Third Party Claim) that was not required to be liable paid due to any limitation set forth in this Section 6.5, then the Indemnified Party shall, promptly after demand by the Indemnifying Party, reimburse the latter for all Losses starting from such payments without interest. Absent a finding of fraud by a court having jurisdiction, the first dollar of such Losses, (ii) the Representative’s maximum aggregate liability for all claims under Section 10.01 of the Members with respect to the Member Indemnity Obligations and the maximum liability of Buyer with respect to the Buyer Indemnity Obligations shall not exceed Fifty One Million and No/100 Dollars ($50,000,0001,000,000.00) in the aggregate (the “Aggregate Limitation”). The Members and (iii) a Member shall have no item relating further obligations with respect to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) the Member Indemnity Obligations at the earlier of the Company Disclosure Schedules shall constitute a Loss for which a Parent time when the Members have paid Member Indemnity Obligations equal in the aggregate to the Aggregate Limitation.
a. An Indemnified Party shall not be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have make any liability claim for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability indemnification under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject 6 or, with respect to the following limitations: warranties and representations in Section 2.2(u) unless notice of such claim describing such claim with particularity is given prior to the date that is twenty-four (i24) months after the Parent shall have no liability for such claims until the aggregate amount Closing Date, other than matters of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceededtitle and authorization, the Parent shall be liable for all Losses starting from the first dollar of such Losses representations and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss warranties for which a Party shall be entitled to recover pursuant to this Article 10 (and survive for the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation longest period permitted by such Material Adverse Effect or materiality qualificationsapplicable law.
Appears in 1 contract
Sources: Membership Interest Purchase and Sale Agreement (Omni Energy Services Corp)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject to the following limitations: (i) Subject to Section 7.3(a), for the Representative shall have no Losses arising out of events described in Sections 7.2(a)(i) through (viii), the potential liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Indemnifying Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from limited to their Pro Rata Portions of the first dollar $10,000,000 Earn-Out Amount, if any, and the Parent’s sole recourse for recovery of any Losses arising out of events described in Sections 7.2(a)(i) through (viii) shall be limited to that first $10,000,000 of the Earn-Out Amount, if any. This limitation applies regardless of the Earn-Out Amount actually earned. Parent shall seek recovery solely against the first $10,000,000 of the Earn-Out Amount, as described in this Section 7.2(b) first by reduction of any portion of the Earn-Out Amount that can potentially be earned and second, if reduction of such portion of the Earn-Out Amount is not sufficient to cover such Losses, by recovery from each Indemnifying Party, to the extent of their Pro Rata Portion, of any portion of the Earn-Out Amount actually paid.
(ii) Subject to Section 7.3(a), for the Representative’s aggregate Losses arising out of events described in Section 7.2(a)(ix), the liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party Indemnifying Parties shall be entitled several and not joint and the maximum amount that the Indemnified Parties may recover from each Indemnifying Party for Losses shall be limited to recovery an amount equal to the Pro Rata Portion of the Total Consideration received by such Indemnifying Party pursuant to Section 10.01. No Company Stockholder 1.7 and in such case, the exclusive remedy of the Parent shall have not be a reduction of the Earn-Out Amount; provided, however, Parent shall seek recovery against the Earn-Out Amount first by reduction of any liability for any claims made under Section 10.01 (portion of the Earn-Out Amount that can potentially be earned and second, if reduction of such portion of the Earn-Out Amount is not sufficient to cover such Losses, by recovery from each Indemnifying Party, to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making their Pro Rata Portion, of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any portion of the parties referred to in Earn-Out Amount actually paid and then shall seek recovery against the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (Special Payment and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsClosing Cash Payment.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s All of the representations and warranties of the parties contained in Article IV, Article V and Article VI and all claims and causes of action for indemnification under this Article IX with respect thereto shall survive the termination of this Agreement pursuant to Section 10.1 hereof or otherwise for twelve (12) months after the Closing Date (such period, the “General Survival Period”); provided that the representations and warranties contained in Section 4.19 (Taxes) and all claims and causes of action for indemnification under this Article IX with respect thereto shall survive such termination for a period of the applicable statute of limitation (such period, the “Tax Survival Period”, and together with the General Survival Period, each a “Survival Period”). After the expiration of the applicable Survival Period, none of the Sellers, the Buyer or any of their respective officers, directors, trustees, members, limited partners, general partners or Affiliates shall be under any liability whatsoever with respect to the applicable representations or warranties contained in this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement and subject to the limitations in this Section 9.4, indemnification under Section 9.1 shall not be available unless and until the amount of Indemnifiable Losses asserted against Sellers, under Section 9.1 equals or exceeds (i) an amount equal to $350,000 resulting from any single claim or aggregated claims arising out of the same or similar facts, events or circumstances (the “Per Claim Deductible”), and (ii) an amount equal to $3,000,000 in the aggregate (the “Deductible”). Once the Deductible has been exceeded, the Buyer Indemnitees shall be entitled to the benefit of the indemnity under Section 9.1 for any claim that exceeds the Per Claim Deductible to the extent the aggregate of all such claims is in excess of the Deductible, subject, however, to the Indemnification Cap.
(c) With respect to all claims made under Section 10.01 this Agreement, the maximum aggregate amount of Indemnifiable Losses that may be recovered shall not exceed 10% (ten percent) of the Purchase Price (the “Indemnification Cap”).
(d) Notwithstanding any other provision of this Agreement to the contrary, the parties agree that the recovery by any Indemnified Party of any damages suffered or incurred by such Indemnified Party as a result of any breach by another party of any of its obligations under this Agreement shall be subject limited to the following limitations: actual damages suffered or incurred by an Indemnified Party as a result of the breach by the breaching party of its obligations hereunder and in no event shall the breaching party be liable to an Indemnified Party for any indirect, consequential, special, exemplary or punitive damages (iincluding any damages on account of lost profits or opportunities) suffered or incurred by an Indemnified Party as a result of the Representative breach by the breaching party of any of its obligations hereunder.
(e) Notwithstanding any provision to the contrary contained in this Agreement, in the event that an Indemnifying Party can establish that an Indemnified Party had actual knowledge after due inquiry, on or prior to the Closing Date, of a breach of a representation or warranty of the Indemnifying Party upon which a claim for indemnification by the Indemnified Party is based, then the Indemnifying Party shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Indemnifiable Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsclaim.
(cf) In the event The amount of any Indemnifiable Losses claimed by any Indemnified Party hereunder shall be net of any available insurance, indemnity, contribution, net Tax benefit or other payments or recoveries of a breach by a Party like nature with respect thereto (it being agreed that, promptly after the realization of any representation or warranty given or made by that such reductions of Indemnifiable Losses pursuant hereto, such Indemnified Party shall reimburse the Indemnifying Party for such reduction in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss Indemnifiable Losses for which a such Indemnified Party was indemnified prior to the realization of such reductions of Indemnifiable Losses).
(g) If an Indemnified Party recovers Indemnifiable Losses from an Indemnifying Party under this Article IX, the Indemnifying Party shall be entitled subrogated, to recover the extent of such recovery, to the Indemnified Party’s rights against any third party, with respect to such recovered Indemnifiable Losses subject to the subrogation rights of any insurer providing insurance coverage under one of the Indemnified Party’s policies and except to the extent that the grant of subrogation rights to the Indemnifying Party is prohibited by the terms of the applicable insurance policy.
(h) The amount of any Indemnifiable Losses claimed by any Buyer Indemnified Party hereunder shall be reduced to the extent that Buyer shall have received the benefit of an adjustment pursuant to this Article 10 (and Section 2.3 due to the application fact that the item that is the subject of the Threshold and indemnification claim was specifically taken into account in the Parent Thresholdfinal Post-Closing Net Working Capital Statement.
(i) and not for purposes Notwithstanding anything to the contrary in this Agreement, in no case shall Sellers owe any indemnification under Section 9.1 with respect to any breach or inaccuracy of determining whether a breach any of the representation has occurredrepresentations or warranties contained in Section 4.12, (i) except to the amount extent any Indemnifiable Losses were incurred to comply with applicable Environmental Law as of such Loss shall be determined without limitation the Closing Date; (ii) to the extent any Release of Hazardous Materials, non-compliance with Environmental Law or other condition forming the basis of any Indemnifiable Losses was contributed to or exacerbated by such Material Adverse Effect the Buyer Indemnitees; or materiality qualifications(iii) to the extent any Indemnifiable Losses result from or arise out of (y) any change subsequent to the Closing Date in the use of the Business or the plants or other facilities or properties constituting the Business or (z) any voluntary investigation, reporting, cleanup or other voluntary remedial activity by any Buyer Indemnitee.
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Sources: Limited Liability Company Membership Interests and Stock Purchase Agreement (Dynegy Holdings Inc)
Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding anything to the following limitations: contrary contained in this Agreement, (i) no indemnification under Section 9.4(a)(i) and (ii) hereof shall be made by the Representative Sellers and no indemnification under Section 9.4(b)(i) and (ii) hereof shall be made by Buyer, and neither the Sellers nor Buyer shall have no liability for claims made under Section 10.01 any liability, respectively, to the other therefor, unless and until the aggregate amount of Losses subject to indemnification pursuant thereto and due the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars (party being indemnified shall exceed $5,000,000) (250,000, and once such threshold amount is exceeded the “Threshold”)indemnifying party shall indemnify the indemnified party, provided that if such Threshold is exceeded, the Representative and shall be liable liable, only for all the amount of any such Losses starting from the first dollar in excess of such Lossesthreshold amount, and (ii) the Representative’s aggregate liability for all claims amount required to be paid by the Sellers pursuant to their indemnification obligations under Section 10.01 9.4(a)(i) and 9.4(a)(ii) hereof or by Buyer pursuant to its indemnification obligations under Section 9.4(b)(i) and 9.4(b)(ii) hereof shall not exceed Fifty Million Dollars $30,000,000, and neither party shall have any liability to any indemnified party for, and such indemnified parties shall have no right to recover from the Sellers or Buyer, as the case may be, any amount of Losses which exceeds ($50,000,000and from and after the time such Losses exceed) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party such amount. The applicable indemnified party shall be entitled to recovery indemnification without regard to the provisions of this Section 9.5(a) with respect to the indemnification obligations of the Sellers pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under 9.4(a)(iii) hereof and the indemnification obligations of Buyer pursuant to Section 10.01 (9.4(b)(iii) hereof and with respect to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated covenants contained in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10Sections 6.12 and 6.13 hereof.
(b) The Parent liability for all claims made under Section 10.02 shall be 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 9.4 hereof with respect to the following limitations: (i) amount of Losses in excess of the Parent net cash proceeds received by such indemnified party pursuant to such insurance; provided, however, that the foregoing shall have in no liability for way obligate the indemnified party to maintain any level of insurance or prevent any indemnified party from self-insuring its risks. With respect to any Insured Loss, the applicable indemnified party shall first use all reasonable efforts to obtain the maximum recovery from the provider of such claims until insurance and then, to the aggregate extent that the net cash proceeds received by such indemnified party are less than the amount of the Losses incurred by a Stockholder Indemnified Party indemnified hereunder, or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (if the “Parent Threshold”), provided that if indemnified party is unable to obtain any recovery from such Parent Threshold is exceededprovider, the Parent indemnified party shall be liable entitled to seek indemnification pursuant to Section 9.4 hereof with respect to the amount of the Losses that exceed such recovery; provided, however, that if, following the receipt of any indemnity payments pursuant to Section 9.4 hereof, the indemnified party obtains any insurance recovery from a third party insurance provider, 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 up to, but not in excess of, the amount of the indemnity payments made by the indemnifying party pursuant to such Losses. In determining the amount of Losses for all purposes of Section 9.5(a) hereof, to the extent of any Insured Loss, the amount of Losses starting subject to indemnification hereunder will be determined at the earlier of such time as the indemnified party either (a) obtains any insurance recovery from third party insurance providers (in which case the first dollar amount of such Losses shall be calculated net of such recovery), or (b) reasonably determines that it is unable to obtain any recovery from such providers. The parties agree that no insurance company shall have any right of subrogation under this Section 9.5(b) and (iithe parties agree that this Section 9.5(b) is not for the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out benefit of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsthird party insurance provider.
(c) In None of Buyer nor any person otherwise entitled to indemnity pursuant to Section 9.4(a) hereof shall be entitled to, and shall be deemed to have waived all claims and rights to, indemnification hereunder (i) for any Losses to the event extent (but only to the extent) that reserves or accruals have been established or reflected on the Closing Date Statement of a breach by a Party Net Assets (and have not been previously used or applied) specifically for the class or category (or any substantially similar class or category) of Losses for which indemnification is sought, or (ii) with respect to the untruth or inaccuracy of any representation or warranty given or made by that Party the Sellers in this Agreement that is qualified so as or with respect to only the non-fulfillment, non-performance or other breach of any covenant or agreement of the Sellers hereunder if an individual included in the definition of knowledge of Buyer in Section 1.3(b) hereof had actual knowledge of such untruth, inaccuracy, non-fulfillment, non-performance or other breach on or prior to the Closing Date.
(d) Except for equitable relief, including without limitation injunctive relief or specific performance, to which either party hereto may be deemed breached if entitled, the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “indemnification provided in any material respect,” then for purposes of determining the amount of Loss for which a Party Section 9.4 hereof shall be entitled to recover pursuant the sole and exclusive remedy of the parties with respect to this Article 10 (Agreement and the application transactions contemplated hereby, except with respect to any Losses incurred by either party as a result of fraud or intentional misrepresentation on the part of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsother party.
Appears in 1 contract
Limitations on Indemnification. (a) The Representative’s liability indemnification provided for all claims made under Section 10.01 in Sections 8.1 and 8.2 shall be subject to the following limitations: :
(a) Except as otherwise provided below, (i) the Representative Parent shall have no liability not be' obligated to pay any indemnification amounts pursuant to Section 8.1(a) for claims made under Section 10.01 Losses unless and until the aggregate amount of all Losses pursuant thereto exceeds $2,500,000 (the Losses incurred by a Parent Indemnified Party or Parent "Deductible"), whereupon the Buyer Indemnified Parties exceeds Five Million Dollars shall be entitled to indemnification under Section 8.1(a) only to the extent that Losses exceed the Deductible ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from aggregate liability of the first dollar Parent in respect of such Losses, breaches of representations and warranties under Section 8.1(a) will not in the aggregate exceed $25,000,000); (ii) the Representative’s Parent shall not be obligated to pay any indemnification amounts pursuant to Section 8.1(b) for Losses unless and until the aggregate amount of all Losses exceeds an amount equal to the Deductible, whereupon the Buyer Indemnified Parties shall be entitled to indemnification under Section 8.1(b) only to the extent that Losses exceed the Deductible (provided that the aggregate liability for all claims of the Parent in respect of Losses under Section 10.01 8.1(b) will not in the aggregate exceed $250,000,000); (iii) the Parent shall not exceed Fifty Million Dollars be obligated to pay any indemnification amounts pursuant to Sections 8.1(c), ($50,000,000d), (e), (f), (g) and (iiih) without regard to the Deductible or any aggregate limit; (iv) Holdings shall not be obligated to pay any indemnification amounts pursuant to Section 8.2(a) for Losses in respect of breaches of representations and warranties unless and until the aggregate amount of all Losses pursuant thereto exceeds an amount equal to the Deductible, whereupon the Seller Indemnified Parties shall be entitled to indemnification under Section 8.2(a) only to the extent that Losses exceed the Deductible (provided that the aggregate liability of Holdings in respect of breaches of representations and warranties under Section 8.2(a) will not in the aggregate exceed $25,000,000), (v) Holdings shall not be obligated to pay any indemnification amounts pursuant to Section 8.2(b) for Losses unless and until the aggregate amount of all Losses exceeds an amount equal to the Deductible, whereupon Holdings shall be entitled to indemnification under Section 8.2(b) only to the extent that Losses exceed the Deductible (provided that the aggregate liability of Holdings in respect of Losses under Section 8.2(b) will not in the aggregate exceed $250,000,000) and (vi) Holdings shall be obligated to pay any indemnification amounts pursuant to Sections 8.2(c), (d) or (e) without regard to the Deductible or any aggregate limit.
(b) Subject to Section 8.7 hereof, no item relating claims for indemnification in respect of Sections 8.1(a) or 8.2(a) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to Taxes that is referenced survive pursuant to Section 8.6.
(c) The foregoing limitations on the indemnification obligations set forth in Schedule 4.10 this Section 8.5 shall not apply to any covenants or obligations of any party to this Agreement.
(other than Schedule 4.10(b)d) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Notwithstanding anything contained in this Agreement, no Buyer Indemnified Party shall be entitled to recovery pursuant any indemnification under this Agreement with respect to Section 10.01. No Company Stockholder shall have any liability for Losses arising from any claims made breach of a representation or warranty under Section 10.01 (Sections 2.25, 2.27 or 2.28 of this Agreement as it may relate to the extent not capable Company's or any Subsidiary's relationship as a third party provider of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company services to Exelon Corporation or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10affiliates.
(be) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder No Buyer Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant any indemnification under this Agreement with respect to any Losses arising from any breach of representation or warranty under Section 2.12 in connection with any matter identified in any environmental report prepared for the benefit of Holdings or any of its affiliates between the date of this Article 10 (Agreement and the application Closing Date which report relates to OSP Consultants, Inc., OSP Telcom, Inc., RJE Telecom Inc., OSP, Inc., OSP Mexico, International Communications Services, Inc., Blair Park Services, Inc., Sunesys, Inc. or Sunesys of Virginia, Inc. except to the extent the matters set forth therein result in a Material Adverse Effect.
(f) Notwithstanding anything to the contrary in this Agreement, Buyer Indemnified Parties shall not be entitled to any indemnification under this Agreement for any Losses arising under Section 8.l(h)(i) above (i) unless and until (A) a claim has been made or an order has been issued against Buyer Indemnified Parties by any third-party, including any Authority, or (B) the Environmental Condition requires investigation or remediation under, or constitutes a violation of applicable Environmental Law, and (ii) any Losses in excess of those incurred in connection with Section 8.5(f)(i).
(g) Notwithstanding any other provision of this Agreement, to the extent that any matter for which Buyer Indemnified Parties seeks indemnity from the Parent under Section 8.1(h) of this Agreement requires Remedial Work, the Parent shall have the right, but not the obligation, to exclusively control such Remedial Work and any claims, actions, suits or proceedings related thereto; provided, however, that the performance of such Remedial Work by the Parent shall not unreasonably interfere with Buyer Indemnified Parties' use and operation of the Threshold Facilities or their interests therein, and any such Remedial Work shall comply with all applicable Environmental Laws and requirements of Authorities.
(h) Notwithstanding any other provision of this Agreement, to the extent that any Remedial Work is required at the Facilities, the Parent Thresholdshall only be required to perform such Remedial Work that is necessary under applicable Environmental Laws considering the industrial use of the property as of the Closing Date and required for issuance of a certificate of completion, no further action or similar approval from any Authority with jurisdiction over the Facilities. In the event that the Authority does not issue such certification or approval in the normal course, the Parent shall obtain from an environmental consultant with expertise in the area an opinion stating that the Remedial Work has been performed in accordance with applicable Environmental Law or as required by the relevant Authority.
(i) Subject to Section 8.5(j) below, no person's right to indemnification shall be affected by any investigation conducted with respect to, or any actual knowledge acquired at any time with respect to, the accuracy or inaccuracy of or compliance with, any representation, warranty, covenant, or obligation.
(j) Except for matters set forth in Article IX and Sections 8.1(b), (d), (e), (f), (g) and not for purposes of determining whether (h) and Section 8.2(b), (d) and (e), no person shall be entitled to indemnification under this Agreement with respect to a breach of or non-compliance with a particular representation and warranty or covenant or obligation if such party had actual knowledge of the representation has occurredbreach of or non-compliance with, such representation, warranty, covenant, or obligation unless the amount other party also had actual knowledge of such Loss breach of or non-compliance with, any representation, warranty, covenant, or obligation. For the purposes of this Section 8.5(j), actual knowledge of Buyer Indemnified Parties shall be determined without limitation by such Material Adverse Effect or materiality qualificationsinclude only the actual knowledge of ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, and actual knowledge of Seller Indemnified Parties shall include only those persons specified in Section 10.8(c).
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Limitations on Indemnification. Purchaser shall not be entitled to any indemnification payment for Losses until such time as the total amount of all Losses that have been directly or indirectly suffered or incurred by any one or more of Purchaser Indemnified Parties, or to which any one or more of Purchaser Indemnified Parties has or have otherwise become subject pursuant to such provisions, exceeds One Hundred Fifty Thousand Dollars ($150,000) in the aggregate (the “Deductible”); provided, however, that in the event that such Losses exceed the Deductible, the Shareholders shall fully indemnify the applicable Purchaser Indemnified Party for all Losses incurred by such Purchaser Indemnified Party in excess of the Deductible. Notwithstanding the foregoing, the limitations set forth above shall not apply to Losses in connection with indemnification (a) The Representative’s liability for all claims made relating to Fundamental Representations, and (b) relating to breaches of representations and warranties set forth in Section 4.08, and (c) indemnification obligations under Section 10.01 shall be subject to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”Sections 12.02(c), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses(f), (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000q) and (iii) no item relating to Taxes that is referenced r); provided further, except as set forth in Schedule 4.10 (other than Schedule 4.10(b)) Section 12.05 and Section 12.06 the indemnification obligations of the Company Disclosure Schedules Shareholder Indemnified Parties hereunder shall constitute a Loss for which a Parent Indemnified Party not, in the aggregate, exceed the Cap. Notwithstanding any other provision hereof, in no event shall any party be entitled liable to recovery pursuant any other party, or to Section 10.01. No Company Stockholder shall have any liability the other party’s indemnitees, whether under this Agreement or otherwise, for any claims made under Section 10.01 (punitive damages, except to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Purchaser Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from a third party for any such fraudulent misrepresentations or fraudulent actionspunitive damages.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 No Indemnifying Party shall be subject required to indemnify an Indemnified Party hereunder except to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until extent that the aggregate amount of Losses for which the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties is otherwise entitled to indemnification pursuant to this Section 13 exceeds Five Million Dollars ($5,000,000) (250,000, whereupon the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 be paid the excess of (i) the aggregate amount of all such Losses over (ii) $250,000, subject to the extent limitations on recovery and recourse set forth in Sections 13.5(b) and 13.6 below; provided, however, that (A) Cash Tax Claims (as defined in Section 13.6 below) shall not capable be subject to either the $250,000 deductible described above or to the limitations as to recovery and recourse referred to below, and (B) Losses related to or arising directly or indirectly out of being paid any inaccuracies in any representation or warranty made by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties Sellers in Section 4.5 or Section 4.29 (collectively, "Unlimited Claims") shall be indemnified in their entirety by such Seller or the Sellers, as applicable, and shall not be subject to either the $250,000 deductible described above or to the limitations as to recovery and recourse referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10below.
(b) The Parent liability for all claims made under Section 10.02 shall be subject Subject to the following limitations: first sentence of Section 13.6 and notwithstanding anything else to the contrary otherwise stated herein or in any other Transaction Document, the aggregate amount actually payable by either (i) the Parent shall have no liability for such claims until Buyer as an Indemnifying Party on the aggregate amount of the Losses incurred by a Stockholder Indemnified Party one hand or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for Sellers as Indemnifying Parties on the other hand pursuant to this Section 13 and Section 11 of the Exchange Agreement, with respect to all Claims against such claims Indemnifying Party or Indemnifying Parties, as the case may be, other than Unlimited Claims (as to which no such limit shall not apply), shall in no event exceed $35,000,000; except that Losses resulting 5,000,000 (as such amount may be reduced from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable time to the Stockholder Indemnified Party or Stockholder Indemnified Parties time pursuant to the full extent Section 3(d) of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsBuy-Sell Agreement).
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a No Indemnifying Party shall be entitled to recover liable for any Losses pursuant to this Article 10 Section 13 unless a written claim for indemnification in accordance with Section 13.4 is given by the Indemnified Party to the Indemnifying Party with respect thereto within eighteen (and 18) months after the application Closing, except that this time limitation shall not apply to any Losses related to or arising directly or indirectly out of any Tax Claims or Unlimited Claims, as to which in each case the Threshold and the Parent Threshold) and not for purposes applicable statute of determining whether a breach of the representation has occurred, the amount of such Loss limitations shall be determined without limitation by such Material Adverse Effect or materiality qualificationsapply.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 Notwithstanding anything to the contrary set forth in this Agreement, neither Buyer nor Seller shall be subject entitled to the following limitationsreceive any amount in respect of any indemnification claims: (i) the Representative shall have no liability for claims made under Section 10.01 unless and until the aggregate amount of the Losses all Damages incurred or suffered by a Parent Indemnified such Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) 100,000 (the “ThresholdBasket”)) in the aggregate, provided that if such Threshold is exceededin which event, the Representative Indemnifying Person shall be liable for obligated to indemnify the Injured Party, and the Injured Party may assert its right to indemnification, to the full extent of all Losses starting from the first dollar of such Indemnified Losses, including Indemnified Losses that are less than the Basket, or (ii) in excess of $5,000,000 (the Representative’s aggregate liability for all claims “Cap”) in the aggregate; provided, however, that the Cap shall not apply to breaches of any Fundamental Reps, and neither the Basket nor the Cap shall apply to breaches of (x) any covenant contained in Article 2, Article 5 or Article 6, (y) the indemnification obligations under Section 10.01 shall not exceed Fifty Million Dollars 9.1(b), or ($50,000,000z) and or any act of fraud on the part of Seller (iii) no item relating to Taxes that is collectively, the matters referenced in Schedule 4.10 (other than Schedule 4.10(bthis proviso are referred to herein as the “Uncapped Indemnification Matters”)) of . Except to the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party extent indemnifiable pursuant to Section 9.1(b), neither Buyer nor Seller shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have receive any liability for amount in respect of any indemnification claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitations: (i) the Parent shall have no liability for such claims until the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations breach or fraudulent action by the Parent shall result violation of any Fundamental Reps in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent excess of the Stockholder Indemnified Party Aggregate Consideration.
(b) Except with respect to Uncapped Indemnification Matters, the indemnification obligations in this Article 9 shall terminate on the date that is eighteen (18) months after the Closing Date, unless prior to such date, the Injured Person has notified the Indemnifying Person of an indemnification claim in accordance with Section 9.4 or Stockholder Indemnified Parties Losses resulting from 9.5 above, in which case, the indemnification obligations in this Article 9 with respect to such fraudulent misrepresentations or fraudulent actionsclaim shall survive until resolution of such indemnification claim.
(c) In the event of a breach Payments by a an Indemnifying Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such 9 in respect to any Indemnified Loss shall be determined without limitation reduced by an amount equal to any insurance recoveries that are received by the Injured Party with respect to all or a portion of such Material Adverse Effect Indemnified Loss.
(d) The foregoing indemnification provisions of this Article 9 shall be the exclusive remedy of a Party for breach by the other Party of the representations and warranties in Article 3 or materiality qualificationsArticle 4 above.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 shall be subject Notwithstanding any other provision of this Agreement to the following limitations: contrary, (i) the Representative shall Indemnifying Party will not be liable under this Article 7 for any Losses to the extent that the Indemnified Parties have no liability otherwise been fully compensated for claims made under Section 10.01 until the aggregate amount such Losses pursuant to this Article 7 so as to avoid “double counting” of the same Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, and (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss for which a Parent Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 (to the extent not capable of being paid by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any each of the parties referred hereto will use their commercially reasonable efforts to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10mitigate all Losses relating to an Indemnification Claim contemplated by Section 7.3(b).
(b) The Parent liability From and after the Initial Closing Date, except with respect to claims for fraud or willful misconduct, the sole and exclusive remedy for any and all claims made under Section 10.02 shall Losses arising out or relating to any breach, or alleged breach, of any representation or warranty or any covenant or agreement in this Agreement, will be subject the indemnification provisions set forth in this Article 7, and the parties hereto each hereby waive to the following limitations: (imaximum extent permitted by applicable Law any other remedy to which they or any other Person entitled to indemnification hereunder may have at Law or in equity with respect thereto; provided, however, that nothing in this Section 7.4(b) the Parent shall have no liability for such claims until the aggregate amount will prevent any party from exercising its rights pursuant to Section 8.5 in lieu of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar of such Losses and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result indemnification provisions set forth in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsthis Article 7.
(c) In Notwithstanding any other provision hereof, in no event will the event aggregate amount of a breach by a Losses for which an Indemnifying Party is obligated to indemnify the Indemnified Parties pursuant to Section 7.2(a)(i) or Section 7.2(b)(i) exceed the aggregate Purchase Price (the “Cap”); provided, however, that the Cap will not limit the indemnification of the Indemnified Parties with respect to any Losses resulting from or relating to breaches of any representation Fundamental Reps (other than breaches of Section 3.9) or warranty given or made by that Party in this Agreement that is qualified so as any Losses to only be deemed breached if the representation would have a Material Adverse Effect extent resulting from fraud on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application part of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualificationsIndemnifying Party.
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Limitations on Indemnification. No claim may be made against the Escrow Deposit unless and until the Parent Indemnified Parties have sustained aggregate Losses for which the Parent Indemnified Parties are entitled to indemnification pursuant to this Agreement in excess of Three Hundred Fifty Thousand Dollars (a$350,000) The Representative’s liability for in the aggregate (the “Deductible Amount”) and then only to the extent such aggregate amount exceeds the One Hundred Seventy-Five Thousand Dollars ($175,000). Notwithstanding any other provision in this Agreement to the contrary, the maximum aggregate recovery of all claims made under Section 10.01 Parent Indemnified Parties shall be subject limited to, and shall not exceed an amount equal to, the Escrow Deposit held pursuant to the following limitations: Escrow Agreement except for Losses determined by final, nonappealable judgment of a court of competent jurisdiction to have been caused by (i) the Representative shall have no liability for claims made under any breach of Section 10.01 until the aggregate amount of the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Threshold”3.10(h), provided that if such Threshold is exceeded, the Representative shall be liable for all Losses starting from the first dollar of such Losses, (ii) any breach of Section 3.12 (“Government Contract Claims”) or (iii) actual fraud or intentional misrepresentation by the Representative’s aggregate liability for all Company (“Fraud Claims,” and together with the claims under Section 10.01 shall not exceed Fifty Million Dollars described in clauses ($50,000,000i) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)ii) of the Company Disclosure Schedules shall constitute this Section 9.05, “Excluded Claims”). Excluded Claims finally determined by nonappealable judgment of a Loss for which court of competent jurisdiction in favor of a Parent Indemnified Party shall be entitled to recovery paid first, from the Escrow Deposit, and second, upon depletion of the Escrow Deposit in full, severally (but not jointly) by the Common Stockholders pursuant to Section 10.01. No Company Stockholder the Limited Guaranty; provided that, (x) in no event shall have any the aggregate liability for any claims made under Section 10.01 (of the Common Stockholders in respect of Government Contract Claims exceed an amount equal to the extent not capable difference of being (A) the Escrow Deposit minus (B) all amounts paid (whether from escrow, directly by the RepresentativeCommon Stockholders, or otherwise) unless that Company in respect of all claims other than Government Contract Claims and (y) in no event shall the aggregate liability of any Common Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject arising from this Agreement and the Transactions exceed an amount equal to the following limitations: (i) the Parent shall have no liability for Merger Consideration received by such claims until the aggregate amount of the Losses incurred by a Common Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting from the first dollar in respect of such Losses and (ii) the ParentCommon Stockholder’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out of any fraudulent misrepresentations or fraudulent action by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actionsshares.
(c) In the event of a breach by a Party of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining the amount of Loss for which a Party shall be entitled to recover pursuant to this Article 10 (and the application of the Threshold and the Parent Threshold) and not for purposes of determining whether a breach of the representation has occurred, the amount of such Loss shall be determined without limitation by such Material Adverse Effect or materiality qualifications.
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Limitations on Indemnification. (a) The Representative’s liability for all claims made under Section 10.01 11.6.1. No Indemnifying Party shall be subject required to indemnify an Indemnified Party hereunder for any Losses related to or arising directly or indirectly out of any breach of or any inaccuracy in any representation or warranty (other than any breach of or inaccuracy in any representation or warranty made by any Seller in Sections 6.1 (Due Organization and Authority, 6.5 (Authority to Execute and Perform Agreement), 6.14 (Environmental Matters), 6.13 (Employee Benefits), 6.15 (Taxes); 6.18 (Compliance with Laws) and 6.21 (Illegal Payments), indemnification for which shall be as provided below) made by such Indemnifying Party in or pursuant to this Agreement (including the Schedules and Exhibits hereto) (such Losses being collectively referred to herein as the “Representation and Warranty Losses”) except to the following limitations: (i) the Representative shall have no liability for claims made under Section 10.01 until extent that the aggregate amount of such Representation and Warranty Losses for which the Losses incurred by a Parent Indemnified Party or Parent Indemnified Parties is otherwise entitled to indemnification pursuant to this Article 11 exceeds Five Million Dollars ($5,000,000) 50,000 (the “ThresholdDeductible Amount”)) (it being understood and agreed that the Deductible Amount is intended as a deductible, provided that if such Threshold is exceeded, the Representative and no Indemnifying Party shall be liable for all any Representation and Warranty Losses starting from less than the first dollar of such Losses, (ii) the Representative’s aggregate liability for all claims under Section 10.01 shall not exceed Fifty Million Dollars ($50,000,000) and (iii) no item relating to Taxes that is referenced in Schedule 4.10 (other than Schedule 4.10(b)) of the Company Disclosure Schedules shall constitute a Loss Deductible Amount for which a Parent the Indemnified Party is otherwise entitled to indemnification), whereupon the Indemnified Party shall be entitled to recovery pursuant to Section 10.01. No Company Stockholder shall have any liability for any claims made under Section 10.01 be paid the excess of (x) the aggregate amount of all such Representation and Warranty Losses over (y) the Deductible Amount, subject to the extent limitations on maximum amount of recovery set forth in Section 11.6.2. All Losses (including, but not capable limited to, any Losses related to or arising directly or indirectly out of any breach of or any inaccuracy in any representation or warranty made by any Seller in Sections 6.1 (Due Organization and Authority), 6.5 (Authority to Execute and Perform Agreement), 6.14 (Environmental Matters), Sections 6.13 (Employee Benefits), 6.15 (Taxes), 6.18 (Compliance with Laws), and 6.21 (Illegal Payments)) other than Representation and Warranty Losses (all such Losses being paid collectively referred to herein as “Purchase-Price Limited-Losses”) shall be indemnified in their entirety by the Representative) unless that Company Stockholder directly participated in the making of fraudulent misrepresentations or the taking of fraudulent actions by the Company or any of the parties referred to in the definition of Knowledge of the Company, in which case the Company Stockholder directly participating in the fraud Indemnifying Parties and shall not have any limitation on its liability under this Article 10.
(b) The Parent liability for all claims made under Section 10.02 shall be subject to the following limitationslimitations set forth in this Section 11.6.1.
11.6.2. The aggregate amount payable by all Indemnifying Parties in respect of Representation and Warranty Losses (other than any breach of or inaccuracy in any representation or warranty made by any Seller in Section 6.10 (Intellectual Property) shall not exceed an amount equal to $750,000 (the “Representation and Warranty Cap”). The aggregate amount payable by Sellers in respect of Losses related to or arising directly or indirectly out of any breach of or inaccuracy in any representation or warranty made by any Seller in Section 6.10 (Intellectual Property) and all claims for indemnification under Section 11.2(v) shall not exceed an amount equal to $1,500,000.
11.6.3. Any indemnification payment made pursuant to Article 11 of this Agreement shall be treated as an adjustment to the Purchase Price for tax purposes.
11.6.4. The aggregate amount payable by all Indemnifying Parties in respect of any Purchase-Price Limited-Loss shall not exceed an amount equal to the Purchase Price, less amounts previously paid or to be paid by such Indemnifying Party pursuant to this Article 11.
11.6.5. No Indemnifying Party shall be liable for: (i) a claim for breach of the Parent portions of Section 6.10 (Intellectual Property) which address title or for indemnification under Section 11.2(v) unless a written claim for indemnification in accordance with this Article 11 is given by Indemnified Party with respect thereto prior to the date which is two (2) years following the Closing Date: or (ii) a claim for any other Representation and Warranty Losses pursuant to this Article 11 unless a written claim for indemnification in accordance with this Article 11 is given by the Indemnified Party to the Indemnifying Party with respect thereto prior to the date which is fifteen (15) months following the Closing Date; except that these time limitations shall have no liability not apply to any Losses related to or arising directly or indirectly out of any Purchase-Price Limited-Losses, as to which in each case the applicable statute of limitations shall apply. For purposes of this Section 11.6.5, the portions of Section 6.10 (Intellectual Property) which address title are limited to the representations in Section 6.10.6.1, 6.10.6.3, 6.10.6.7 and 6.10.6.8 hereof.
11.6.6. The amount of Losses for which indemnification is provided under this Agreement will be (i) increased to take account of any Tax cost incurred (grossed up for such claims until increase) by the aggregate amount of the Losses incurred by a Stockholder Indemnified Party or Stockholder Indemnified Parties exceeds Five Million Dollars ($5,000,000) (the “Parent Threshold”), provided that if such Parent Threshold is exceeded, the Parent shall be liable for all Losses starting arising from the first dollar receipt of indemnity payments hereunder (unless such Losses indemnity payment is treated as an adjustment to the purchase price for tax purposes) and (ii) the Parent’s aggregate liability for all such claims shall not exceed $35,000,000; except that Losses resulting from or arising out reduced to take account of any fraudulent misrepresentations or fraudulent action Tax benefit realized by the Parent shall result in the Parent being liable to the Stockholder Indemnified Party arising from the incurrence or Stockholder Indemnified Parties to the full extent of the Stockholder Indemnified Party or Stockholder Indemnified Parties Losses resulting from such fraudulent misrepresentations or fraudulent actions.
(c) In the event of a breach by a Party payment of any representation or warranty given or made by that Party in this Agreement that is qualified so as to only be deemed breached if the representation would have a Material Adverse Effect on a Party or is otherwise qualified as to “materiality” or “in any material respect,” then for purposes of determining such Losses. In computing the amount of Loss for which a any such Tax cost or Tax benefit, the Indemnified Party shall will be entitled deemed to recover be subject to the applicable Federal, state, local and/or local country income taxes at the maximum statutory rate then in effect. Any indemnity payment made pursuant to this Article 10 Agreement will be treated as an adjustment to the purchase price for Tax purposes unless a determination (and the application as defined in Section 1313 of the Threshold and Code) or a similar event under foreign Tax Law with respect to the Parent Threshold) and Indemnified Party causes any such payment not to constitute an adjustment to the purchase price for United States Federal income tax purposes or foreign Tax purposes, as the case may be.
11.6.7. The amount of determining whether a breach of the representation has occurred, Losses recoverable by an Indemnified Party under this Article 11 with respect to an indemnity claim shall be reduced by the amount of such Loss shall be determined without limitation any payment received by such Material Adverse Effect Indemnified Party (or materiality qualificationsan Affiliate thereof), with respect to the Losses to which such indemnity claim relates, from an insurance carrier (after deducting reasonable costs and expenses incurred in connection with recovery of such proceeds and premium increases directly related to such insurance claims). An Indemnified Party shall use reasonable commercial efforts to pursue, and to cause its Affiliates to pursue, all insurance claims to which it may be entitled in connection with any Losses it incurs, and the parties shall cooperate with each other in pursuing insurance claims with respect to any Losses or any indemnification obligations with respect to Losses but in no event will an Indemnified Party be required to commence litigation to recover proceeds under its insurance policies. If an Indemnified Party (or an Affiliate) receives any insurance payment in connection with any claim for Losses for which it has already received an indemnification payment from the Indemnifying Party, it shall pay to the Indemnifying Party, within 30 days of receiving such insurance payment, an amount (not to exceed the amount previously paid by the Indemnifying Party under this Article 11 with respect to such claim) equal to the excess of (A) the amount previously received by the Indemnified Party under this Article 11 with respect to such claim plus the amount of the insurance payments received with respect to such claim, over (B) the amount of Losses with respect to such claim which the Indemnified Party has become entitled to receive under this Article 11.
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