Common use of Limitations to Indemnification Clause in Contracts

Limitations to Indemnification. (a) Seller Indemnitors will have no liability for indemnification with respect to any of the matters described in Section 7.2 unless the total of all Buyer Damages with respect to such matters exceeds a threshold of $250,000, in which event Seller Indemnitors shall have liability for all Buyer Damages in excess of $250,000 as provided in this Section 7.6. Any Buyer Damages arising under Section 4.10 shall not be counted for the purposes of calculating the $250,000 threshold. Seller Indemnitors shall have liability for Buyer Damages and indemnification under this Agreement up to a maximum of $6,000,000 (subject to Section 7.6(b)) solely as follows: (i) The first $2,000,000 of Buyer Damages for which Buyer Indemnitees may be entitled to indemnification with respect to a claim under this Article 7 shall be paid to Buyer Indemnitees by offset adjustment from the amount otherwise payable to Seller pursuant to Section 2.4(b); and (ii) Any Buyer Damages in excess of $2,000,000 for which Buyer Indemnitees may be entitled to indemnification with respect to a claim under this Section 7 shall be paid to Buyer Indemnitees by offset of any amounts due or that become due to Seller pursuant to the Earnout. If, however, any of the Earnout or the amount payable pursuant to Section 2.4(b) has been paid to Seller before the assertion of a claim under this Section 7, Seller Indemnitors shall be liable to pay to Buyer Indemnitees up to the amount of all Earnout Payments previously distributed by Seller and Subsidiary but shall in no event be liable for any amount in excess of such previously distributed Earnout payments and payments pursuant to Section 2.4(b).