Opinion ID: 4546366
Heading Depth: 3
Heading Rank: 4

Heading: The APA Representations and Warranties

Text: Article 2 of the APA contains certain representations and warranties of the Sellers. It states in the relevant part: The execution, delivery and performance of this Agreement and the other agreements . . . will not result in any violation of, be in conflict with, constitute a default under, or cause the acceleration of any obligation or loss of any rights under any Legal Requirement, agreement, contract, [or] instrument . . . to which the Seller is a party or by which the Seller is bound. Article 3 contains additional warranties of the Sellers and Selling Entities. This includes Section 3.23(f), which states: The consummation of the Transactions contemplated by this Agreement will not . . . increase the amount of compensation or benefits due to any individual. 5. The APA Indemnification, Choice of Law, and Forum Selection Provisions Article 9 contains the APA's indemnification provisions. Section 9.1 provides for an eighteen-month survival period for action[s] for a breach of the representations and warranties contained [in the APA], except for claims arising out of Article 2 (and several other irrelevant provisions), which shall survive indefinitely after the Closing. Section 9.4 provides that the Sellers will severally indemnify the Purchaser and its Affiliates against all Losses arising out of or relating to . . . any breach or violation of the representations or warranties of such Seller - 6 - in ARTICLE 2 and provides that the Selling Entities and Sellers will jointly and severally indemnify the Purchaser and its Affiliates against all losses arising out of or relating to the breach or violation of other representations or warranties. The APA defines Losses as claims, liabilities, obligations, costs, damages, losses and expenses (including reasonable attorneys' fees and costs of investigation) of any nature. Section 9.3 requires that claims for indemnification exceed $50,000 and caps the maximum recovery. But the section also provides that claims based upon fraud or for breach of the Uncapped Representations [i.e., the representations and warranties contained in Article 2] shall not be subject to [these] limits.2 Article 10 states that the APA shall be governed by and construed in accordance with the internal laws of the State of Delaware and [a]ny judicial proceeding arising out of or relating to [the APA] shall be brought in the courts of the State of Delaware. 2 On October 8, 2013, Tech Valley and TVC gave Notice of Claims for Indemnification against TelJet; Vermont FiberLink, LLC; and the Pidgeons (the TelJet Parties). These parties settled this claim on July 31, 2014. Tech Valley and TVC, on behalf of themselves and each of their respective subsidiaries, predecessors, successors and assigns, released any additional claims against the TelJet Parties and their shareholders, equity holders, . . . managers, [and] officers, among others. - 7 -