Common use of Limitations on Seller’s Indemnification Clause in Contracts

Limitations on Seller’s Indemnification. Seller will have no obligation to indemnify the Purchaser Indemnified Parties for any Losses pursuant to Section 7.1(a) until such time as such Losses, in the aggregate, exceed three million seven hundred thousand dollars ($3,700,000) (the “Threshold Amount”) at which point Seller shall be liable for the amount of such Losses in excess of such amount; provided, that no Loss may be claimed by the Purchaser Indemnified Parties or shall be reimbursable by Seller or shall be included in calculating the aggregate Losses set forth above other than Losses in excess of thirty-seven thousand dollars ($37,000) resulting from any single claim or an aggregated series of related claims arising out of the same facts, events or circumstances. The maximum amount of indemnifiable Losses for which Seller shall be liable pursuant to Section 7.1(a) shall be thirty-seven million dollars ($37,000,000) (the “Indemnity Cap”). Notwithstanding the foregoing, the limitations contained in this Section 7.3(b) shall not apply to (i) any inaccuracy in, or breach of, any Fundamental Representation or any Tax Representation or (ii) claims arising from fraud by Seller. For the avoidance of doubt, any and all breaches and inaccuracies in Fundamental Representations and Tax Representations and indemnification pursuant to Section 7.1(b), Section 7.1(c), Section 7.1(d), Section 7.1(e), Section 7.1(f), Section 7.1(g) or Article VIII shall not be subject to the Indemnity Cap or other limitations set forth in this Section 7.3(b) and instead shall be recoverable from “dollar one.”

Limitations on Seller’s Indemnification. Notwithstanding anything to the contrary set forth in this Agreement: (i) the Seller will have no obligation shall not be liable to indemnify the Purchaser Buyer Indemnified Parties for under Section 9.1(a) (other than as a result of any breach of any representation or warranty contained in Sections 2.1, 2.3 and 2.4, the first three sentences of Section 5.1(a), Section 5.1(b), Section 5.1(c), Section 5.2 and Section 5.3) unless and until the Losses pursuant to Section 7.1(a) until such time incurred by all Buyer Indemnified Parties as such Lossesa result thereof exceed, in the aggregate, exceed three million seven hundred thousand dollars Two Hundred and Twenty Thousand United States Dollars ($3,700,000) (the US$220,000)(the “Threshold Basket Amount”) at which point ); provided, however, that in the event that such Losses exceed the Basket Amount, the Seller shall be liable indemnify any Buyer Indemnified Party only for the amount of such Losses in excess of such amount; provided, that no Loss may be claimed by the Purchaser Indemnified Parties or shall be reimbursable by Seller or shall be included in calculating the aggregate Losses set forth above other than Losses in excess of thirty-seven thousand dollars ($37,000) resulting from any single claim or an aggregated series of related claims arising out of the same facts, events or circumstances. The maximum amount of indemnifiable Losses for which Seller shall be liable pursuant to Section 7.1(a) shall be thirty-seven million dollars ($37,000,000) (the “Indemnity Cap”)Basket Amount. Notwithstanding the foregoing, the limitations Basket Amount shall not apply to any breach of any representation or warranty contained in this Sections 2.1, 2.3 and 2.4, the first three sentences of Section 7.3(b5.1(a), Section 5.1(b), Section 5.1(c), Section 5.2 and Section 5.3, and the Basket Amount shall not apply to any Losses resulting from any fraudulent misrepresentation; (ii) the indemnification provided for in Section 9.1(a) shall not apply to the extent that the Losses at issue have already been reflected as a accrual, reserve or liability (ior a reduction in computing a net asset such as net accounts receivable) in computing the Closing Date Net Book Value. (iii) any inaccuracy inLosses as to which the indemnification provided for in Section 9.1(a) may apply shall be determined net of any actual recovery (whether by way of payment, discount, credit, off-set, tax benefit, counterclaim or breach ofotherwise) received by a Buyer Indemnified Party or the Company from a third party (including any insurer or taxing authority) less any current or prospective cost associated with receiving such recovery; (iv) prior to the Effective Time, neither the Seller nor the Company shall have any Fundamental Representation liability to any Buyer Indemnified Parties in respect of this Agreement or the other transactions and arrangements contemplated hereby; (v) from and after the Effective Time, neither the Seller nor the Company shall have any Tax Representation liability to any Buyer Indemnified Parties in respect of this Agreement or the other transactions and arrangements contemplated hereby except as expressly provided in Section 9.1; provided, however, that the total amount of such liability shall be limited in the aggregate, as of any time from and after the Effective Time, to three million dollars (ii$3,000,000) claims (the “Seller Liability Cap”) except in the case of any claim based on fraudulent misrepresentation, in which case the total amount of such liability in the aggregate shall not exceed the Total Purchase Price; and (vi) neither the Seller nor the Company shall have any liability to any Buyer Indemnified Parties arising from fraud by Seller. For or as a result of the avoidance termination of doubtemployment with the Company of the employees set forth on Exhibit E hereto, except to the extent that any and all breaches and inaccuracies in Fundamental Representations and Tax Representations and indemnification pursuant such employee is entitled to Section 7.1(b), Section 7.1(c), Section 7.1(d), Section 7.1(e), Section 7.1(f), Section 7.1(ga severance payment due to a contract with the Company (other than the Release Agreements) or Article VIII shall not be subject to under any Company Employee Benefit Plan in excess of the Indemnity Cap or other limitations amount set forth in this Section 7.3(b) and instead shall be recoverable from “dollar one.”on Exhibit E.

Limitations on Seller’s Indemnification. Seller will have no obligation Notwithstanding anything to indemnify the Purchaser contrary set forth in this Agreement: (i) Sellers shall not be liable to the Buyer Indemnified Parties for under Section 9.1(a) (other than as a result of any breach of any representation or warranty contained in Sections 2.1, 2.3 and 2.4, the first three sentences of Section 5.1(a), Section 5.1(b), Section 5.1(c), Section 5.2 and Section 5.3) unless and until the Losses pursuant to Section 7.1(a) until such time incurred by all Buyer Indemnified Parties as such Lossesa result thereof exceed, in the aggregate, exceed three million seven hundred thousand dollars ($3,700,000) 251,750 (the “Threshold Basket Amount”) at which point Seller ); and in the event that such Losses exceed the Basket Amount, Sellers shall be liable severally, and not jointly, indemnify any Buyer Indemnified Party only for the amount of such Losses in excess of such amount; provided, that no Loss may be claimed by the Purchaser Indemnified Parties or shall be reimbursable by Seller or shall be included in calculating the aggregate Losses set forth above other than Losses in excess of thirty-seven thousand dollars ($37,000) resulting from any single claim or an aggregated series of related claims arising out of the same facts, events or circumstances. The maximum amount of indemnifiable Losses for which Seller shall be liable pursuant to Section 7.1(a) shall be thirty-seven million dollars ($37,000,000) (the “Indemnity Cap”)Basket Amount. Notwithstanding the foregoing, the limitations contained Basket Amount shall not apply to any Losses resulting from any fraudulent misrepresentation by the Company or Sellers; (ii) the indemnification provided for in this Section 7.3(b9.1(a) shall not apply to the extent that the Losses at issue have already been reflected as a accrual, reserve or liability (or a reduction in computing a net asset such as net accounts receivable) on the Interim Financial Statements; (iii) any Losses as to which the indemnification provided for in Section 9.1(a) may apply shall be determined net of any actual recovery (whether by way of payment, discount, credit, off-set, tax benefit, counterclaim or otherwise) received by a Buyer Indemnified Party, Merger Sub or the Company from a third party (including without limitation any insurer or taxing authority) less any current or prospective cost associated with receiving such recovery; (iv) prior to the Effective Time, neither Sellers nor the Company shall have any liability to any Buyer Indemnified Parties in respect of this Agreement or the other transactions and arrangements contemplated by this Agreement; (v) from and after the Effective Time, neither of the Sellers shall have any liability to any Buyer Indemnified Parties in respect of this Agreement or the other transactions and arrangements contemplated by this Agreement or the Transaction Documents except as expressly provided in Section 9.1; provided, however, that the total amount of such liability shall be limited in the aggregate, as of any time from and after the Effective Time, to an amount equal to the portion of the Escrow Amount then remaining in the Escrow Account (the “Sellers Liability Cap”) except: (i) in the case of any inaccuracy in, claim based on either a fraudulent misrepresentation by the Company or a Seller prior to the Closing or a breach of, of any Fundamental Representation representation or any Tax Representation or warranty in Section 5.3 in which case the total amount of such liability in the aggregate shall be limited to and shall not exceed the dollar amount of the Total Merger Consideration as of the Closing; (ii) claims arising a breach of a representation or warranty in Section 5.8 in which case the total amount of such liability in the aggregate shall be limited to and shall not exceed 25% of the dollar amount of the Total Merger Consideration as of the Closing; (iii) a breach of Section 7.2 by a Seller, in which case the total amount of such Seller’s liability in the aggregate shall be limited to and shall not exceed 50% of the dollar amount of the Total Merger Consideration as of the Closing and Buyer shall retain all choices of remedies provided by Section 11.10 of this Agreement; or (iv) as may be provided in any Transaction Document that explicitly references this Section 9.5(b)(v). (vi) without in any way limiting the application of Sellers Liability Cap, all Losses for which a Buyer Indemnified Party is entitled to indemnification under Section 9.1 shall first be satisfied from fraud by Seller. For the avoidance Escrow Amount; (vii) without in any way limiting the application of doubt, any and all breaches and inaccuracies in Fundamental Representations and Tax Representations and indemnification pursuant to Section 7.1(b9.5(b)(v), if any Losses for which any Buyer Indemnified Party is entitled to indemnification under Section 7.1(c9.1 are based on a claim of fraudulent misrepresentation by a Seller and such Losses exceed the Sellers Liability Cap, then, with respect to the amount of Losses in excess of the Sellers Liability Cap (the “Excess”), Section 7.1(d)the Buyer Indemnified Parties entitled to seek indemnification for such Excess may seek recovery for such Excess solely from Seller that made the fraudulent misrepresentation and, Section 7.1(e), Section 7.1(f), Section 7.1(g) or Article VIII shall not be subject to the Indemnity Cap or other limitations on liability set forth in this Section 7.3(b) and instead 9.5(b)(v), the total amount of such Seller’s liability in the aggregate for such Excess shall be recoverable from “limited to the remainder of (a) the dollar oneamount of the Total Merger Consideration as of the Closing received by such Seller minus (b) the Escrow Amount; (viii) without in any way limiting the application of subsections (i) through (vii) of Section 9.5(b), in no event shall the total amount of liability in the aggregate of each Seller for Losses pursuant to this Article IX exceed in the aggregate an amount equal to 50 percent of the dollar amount of the Total Merger Consideration as of the Closing; and (ix) notwithstanding anything in this Article IX to the contrary, in no event shall a Seller have any liability under this Article IX for any breach of Section 7.2 by the other Seller.”