Agreement by Seller and the Stockholders to Indemnify. Seller and each Stockholder agree jointly and severally to indemnify, defend and hold Purchaser harmless (subject to the limitations set forth in Section 9.1(e) below) from and against the aggregate of all Indemnifiable Damages (as defined below). (a) For purposes of this Agreement, "Indemnifiable Damages" means, without duplication, the aggregate of all losses incurred or suffered by Purchaser, on a pre-tax consolidated basis to the extent (i) resulting from any breach of a representation or warranty made by Seller or the Stockholders in or pursuant to this Agreement (provided, however, that for purposes of this indemnification, the representation and warranty contained in Section 3.17 of this Agreement shall be deemed to have been made without the qualification of knowledge), (ii) resulting from any breach of the covenants or agreements made by Seller or the Stockholders pursuant to this Agreement, or (iii) resulting from any inaccuracy in any certificate or environmental report delivered by Seller or the Stockholders pursuant to this Agreement. For purposes of this Agreement, the term "loss" shall mean any and all direct or indirect payments, obligations, assessments, losses, loss of income, liabilities, fines, penalties, costs and expenses paid or incurred, or diminutions in value of any kind or character (whether known or unknown, conditional or unconditional, choa▇▇ ▇▇ inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise) that have occurred, including without limitation penalties, interest on any amount payable to a third party as a result of the foregoing and any legal or other expenses reasonably incurred in connection with investigating or defending any demands, claims, actions or causes of action that, if adversely determined, would likely result in losses, and all amounts paid in settlement of claims or actions. (b) Without limiting the generality of the foregoing, with respect to the measurement of Indemnifiable Damages, Purchaser shall have the right to be put in the same pre-tax consolidated financial position as Purchaser would have been in had each of the representations and warranties of Seller and the Stockholders hereunder been true and correct and had the covenants and agreements of Seller and the Stockholders hereunder been performed in full. (c) Each of the representations and warranties made by Seller and the Stockholders in this Agreement or pursuant hereto shall survive for a period of three years after the Closing Date except (i) the representations and warranties of Seller and the Stockholders contained in Section 2.4(c)(i), Section 3.13 and Section 3.17 shall survive for five years, (ii) the representations and warranties of Seller and the Stockholders contained in Section 3.9 shall survive until all applicable limitations periods have expired and (iii) the representations and warranties of Seller and the Stockholders contained in Sections 3.1, 3.2, 3.3, 3.14(a)(i), 3.14(a)(xii) and 4.1 shall not expire, but shall continue indefinitely. No claim for the recovery of Indemnifiable Damages may be asserted by Purchaser against Seller or the Stockholders after such representations and warranties shall expire, provided, however, that claims for Indemnifiable Damages first asserted within the applicable period shall not thereafter be barred. Notwithstanding any knowledge of facts determined or determinable by any party by investigation (and whether or not such party was negligent in connection with any such investigation), each party shall have the right to fully rely on the representations, warranties, covenants and agreements of the other parties contained in this Agreement or in any other (d) If Purchaser believes it is entitled to a claim for any Indemnifiable Damages hereunder, Purchaser shall promptly give written notice to Seller and to the Stockholders of such claim and do the amount or the estimated amount of such claim, and the basis for such claim. If Seller or the Stockholders do not pay the amount of the claim for Indemnifiable Damages to Purchaser within 10 days, then Purchaser may exercise its respective rights under Section 9.3 and/or take any action or exercise any remedy available to it by appropriate legal proceedings to collect the Indemnifiable Damages. (e) Notwithstanding anything to the contrary contained in this Section 9.1, Seller's and the Stockholders' liability for Indemnifiable Damages shall be limited as follows: (1) Purchaser shall have no claim for Indemnifiable Damages unless and until all Indemnifiable Damages incurred by Purchaser exceed an aggregate of $45,000 (the "Basket Amount"), in which event Seller and the Stockholders shall be liable for only such Indemnifiable Damages in excess of the Basket Amount; provided, however, that (A) the Basket Amount shall be reduced by the amount of any Indemnifiable Damages attributable to any matter set forth in any supplement or amendment to any Schedule, any breach of representation or warranty or any failure to comply with or perform any covenant, and (B) Purchaser shall have no obligation to close the transaction if such Indemnifiable Damages exceed $45,000. For example, (x) if the aggregate amount of such Indemnifiable Damages set forth in any supplement or amendment, or attributable to any breach of representation or warranty or failure to comply with or perform any covenant were $40,000, Purchaser would be obligated to close the transaction (assuming all closing conditions of Purchaser (other than Section 8.2(a) relating to representations and warranties) have been satisfied or waived) and the Basket Amount after the Closing would be $5,000; and (y) if such Indemnifiable Damages amounted to $200,000, Purchaser would not be obligated to close the transaction; but if it chooses to close the transaction, the Basket Amount after the closing would be $0, and Seller and the Stockholders would have an indemnification obligation to Purchaser of $155,000. (2) The total amount of Indemnifiable Damages for which Seller and the Stockholders shall be liable to Group 1 shall not exceed the value of the consideration received in the Acquisition, of which the stock portion shall be valued as provided in Section 2.3 herein.
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Agreement by Seller and the Stockholders to Indemnify. Seller and each Stockholder agree jointly and severally to indemnify, defend and hold Purchaser harmless (subject to the limitations set forth in Section 9.1(e) below) from and against the aggregate of all Indemnifiable Damages (as defined below).
(a) For purposes of this Agreement, "Indemnifiable Damages" means, without duplication, the aggregate of all losses incurred or suffered by Purchaser, on a pre-tax consolidated basis to the extent (i) resulting from any breach of a representation or warranty made by Seller or the Stockholders in or pursuant to this Agreement (provided, however, that for purposes of this indemnification, the representation and warranty contained in Section 3.17 of this Agreement shall be deemed to have been made without the qualification of knowledge), (ii) resulting from any breach of the covenants or agreements made by Seller or the Stockholders pursuant to this Agreement, or (iii) resulting from any inaccuracy in any certificate or environmental report delivered by Seller or the Stockholders pursuant to this Agreement. For purposes of this Agreement, the term "loss" shall mean any and all direct or indirect payments, obligations, assessments, losses, loss of income, liabilities, fines, penalties, costs and expenses paid or incurred, or diminutions in value of any kind or character (whether known or unknown, conditional or unconditional, choa▇▇ ▇▇ inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise) that have occurred, including without limitation penalties, interest on any amount payable to a third party as a result of the foregoing and any legal or other expenses reasonably incurred in connection with investigating or defending any demands, claims, actions or causes of action that, if adversely determined, would likely result in losses, and all amounts paid in settlement of claims or actions.
(b) Without limiting the generality of the foregoing, with respect to the measurement of Indemnifiable Damages, Purchaser shall have the right to be put in the same pre-tax consolidated financial position as Purchaser would have been in had each of the representations and warranties of Seller and the Stockholders hereunder been true and correct and had the covenants and agreements of Seller and the Stockholders hereunder been performed in full.
(c) Each of the representations and warranties made by Seller and the Stockholders in this Agreement or pursuant hereto shall survive for a period of three years after the Closing Date except (i) the representations and warranties of Seller and the Stockholders contained in Section 2.4(c)(i), Section 3.13 and Section 3.17 shall survive for five years, (ii) the representations and warranties of Seller and the Stockholders contained in Section 3.9 shall survive until all applicable limitations periods have expired and (iii) the representations and warranties of Seller and the Stockholders contained in Sections 3.1, 3.2, 3.3, 3.14(a)(i), 3.14(a)(xii) and 4.1 shall not expire, but shall continue indefinitely. No claim for the recovery of Indemnifiable Damages may be asserted by Purchaser against Seller or the Stockholders after such representations and warranties shall expire, provided, however, that claims for Indemnifiable Damages first asserted within the applicable period shall not thereafter be barred. Notwithstanding any knowledge of facts determined or determinable by any party by investigation (and whether or not such party was negligent in connection with any such investigation), each party shall have the right to fully rely on the representations, warranties, covenants and agreements of the other parties contained in this Agreement or in any otherby
(d) If Purchaser believes it is entitled to a claim for any Indemnifiable Damages hereunder, Purchaser shall promptly give written notice to Seller and to the Stockholders of such claim and do the amount or the estimated amount of such claim, and the basis for such claim. If Seller or the Stockholders do not pay the amount of the claim for Indemnifiable Damages to Purchaser within 10 days, then Purchaser may exercise its respective rights under Section 9.3 and/or take any action or exercise any remedy available to it by appropriate legal proceedings to collect the Indemnifiable Damages.
(e) Notwithstanding anything to the contrary contained in this Section 9.1, Seller's and the Stockholders' liability for Indemnifiable Damages shall be limited as follows:
(1) Purchaser shall have no claim for Indemnifiable Damages unless and until all Indemnifiable Damages incurred by Purchaser exceed an aggregate of $45,000 55,000 (the "Basket Amount"), in which event Seller and the Stockholders shall be liable for only such Indemnifiable Damages in excess of the Basket Amount; provided, however, that (A) the Basket Amount shall be reduced by the amount of any Indemnifiable Damages attributable to any matter set forth in any supplement or amendment to any Schedule, any breach of representation or warranty or any failure to comply with or perform any covenant, and (B) Purchaser shall have no obligation to close the transaction if such Indemnifiable Damages exceed $45,00055,000. For example, (x) if the aggregate amount of such Indemnifiable Damages set forth in any supplement or amendment, or attributable to any breach of representation or warranty or failure to comply with or perform any covenant were $40,00050,000, Purchaser would be obligated to close the transaction (assuming all closing conditions of Purchaser (other than Section 8.2(a) relating to representations and warranties) have been satisfied or waived) and the Basket Amount after the Closing would be $5,000; and (y) if such Indemnifiable Damages amounted to $200,000, Purchaser would not be obligated to close the transaction; but if it chooses to close the transaction, the Basket Amount after the closing would be $0, and Seller and the Stockholders would have an indemnification obligation to Purchaser of $155,000145,000.
(2) The total amount of Indemnifiable Damages for which Seller and the Stockholders shall be liable to Group 1 shall not exceed the value of the consideration received in the Acquisition, of which the stock portion shall be valued as provided in Section 2.3 herein.
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