Common use of Limitations on Indemnification Obligation Clause in Contracts

Limitations on Indemnification Obligation. The Sellers shall not be liable for indemnification to Buyer under Sections ‎10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers under Section ‎10.2(c)(i), under this Agreement until the aggregate amount of all Claims of Buyer or the Sellers under Sections ‎10.2(a)(i) or ‎10.2(c)(i), as the case may be, exceeds Twenty-Five Thousand Dollars ($25,000) (the “Threshold Amount”), at which time Buyer or the Sellers, as the case may be, shall be entitled to recover the aggregate amount of all Claims, including the Threshold Amount. Buyer shall provide the Sellers, and the Sellers shall provide Buyer, with Notice of all Claims included in the Threshold Amount. The maximum liability of Buyer or the Sellers under this Agreement for indemnification obligations under Sections ‎10.2(a)(i) or ‎10.2(c)(i), as the case may be, shall not exceed the Purchase Price (such maximum liability amount, the “Cap”). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) in the event of fraud or willful misrepresentation by the indemnifying party; or (ii) to indemnification obligations for Damages in connection with (x) a breach of the representations and warranties contained in Sections ‎3.1‎3.1 (“No Violation; Authorization”), ‎3.4 (“Capitalization”), ‎3.13 (“Employee Plans; ERISA”), ‎3.16 (“Taxes”), Section ‎3.22 (“Environmental Claims”) and ‎3.33 (“Seller Representations”) or (y) a breach of any covenants of the Company or the Sellers, including, without limitation, Sections ‎5.2 (“Agreement not to Compete or Solicit, and to Maintain Confidentiality”), ‎6.6 (“Tax Covenants”) and ‎6.9 (“Confidentiality Obligations”). For the sole purpose of calculating the amount of monetary damages that Buyer may be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), the representations and warranties of the Company and the Sellers shall not be deemed qualified by any references to materiality, Material Adverse Effect or Knowledge. All indemnification payments under Section ‎10.2 shall be deemed adjustments to the Purchase Price.

Limitations on Indemnification Obligation. The Sellers Seller shall not be liable for indemnification to Buyer under Sections ‎10.2(a)(i10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers Seller under Section ‎10.2(c)(i10.2(b)(i), under this Agreement until the aggregate amount of all Claims of Buyer or the Sellers Seller under Sections ‎10.2(a)(i10.2(a)(i) or ‎10.2(c)(i10.2(b)(i), as the case may be, exceeds Twenty-Five Thousand Dollars ($25,0005,000) (the “Threshold Amount”), at which time Buyer or the SellersSeller, as the case may be, shall be entitled to recover the aggregate amount of all Claims, including the Threshold Amount. Buyer shall provide the SellersSeller, and the Sellers Seller shall provide Buyer, with Notice of all Claims included in the Threshold Amount. The maximum liability of Buyer or the Sellers Seller under this Agreement for indemnification obligations under Sections ‎10.2(a)(i10.2(a)(i) or ‎10.2(c)(i10.2(b)(i), as the case may be, shall not exceed the Purchase Price (such maximum liability amount, the “Cap”). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) in the event of fraud or willful misrepresentation by the indemnifying party; or (ii) to indemnification obligations for Damages in connection with (x) a breach of the representations and warranties contained in Sections ‎3.1‎3.1 (“No Violation; Authorization”), ‎3.4 (“Capitalization”), ‎3.13 (“Employee Plans; ERISA”), ‎3.16 (“Taxes”), Section ‎3.22 (“Environmental Claims”) and ‎3.33 (“Seller Representations”) or (y) a breach of any covenants of the Company or the SellersSeller, including, without limitation, Sections ‎5.2 (“Agreement not to Compete or Solicit, and to Maintain Confidentiality”), ‎6.6 6.55 (“Tax Covenants”) and ‎6.9 6.7 (“Confidentiality Obligations”). For the sole purpose of calculating the amount of monetary damages that Buyer may be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), the representations and warranties of the Company and the Sellers Seller shall not be deemed qualified by any references to materiality, Material Adverse Effect or Knowledge. All indemnification payments under Section ‎10.2 10.2 shall be deemed adjustments to the Purchase Price.

Limitations on Indemnification Obligation. The Sellers A party (the "Indemnifying Party") shall not be liable and the party seeking indemnification hereunder (the "Claimant") agrees not to enforce any claim for indemnification to Buyer under Sections ‎10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers under Section ‎10.2(c)(i), under this Agreement until the aggregate amount of all Claims of Buyer or such claims exceeds $10,000 (the Sellers under Sections ‎10.2(a)(i) or ‎10.2(c)(i"Threshold Amount"), as and then the case may be, exceeds Twenty-Five Thousand Dollars ($25,000) (the “Threshold Amount”), at which time Buyer or the Sellers, as the case may be, Claimant shall be entitled to recover the aggregate amount of on all Claimsclaims, including the Threshold Amount. Buyer The Claimant shall provide the Sellers, and the Sellers shall provide Buyer, Indemnifying Party with Notice of all Claims claims included in the Threshold Amount. The Threshold Amount shall not apply to the Claims under Section 9.6 or Excess Expenses (as hereinafter defined). The maximum liability of Buyer the Indemnifying Party for all claims and damages of every kind and character arising under or the Sellers under in connection with this Agreement for indemnification obligations under Sections ‎10.2(a)(i) or ‎10.2(c)(i)and the transactions contemplated hereby, including indemnification, shall be the Purchase Price, as increased by any signing bonuses granted pursuant to the Employment Agreements, subject to the further limitations set forth below for the Company Stockholders. It is specifically agreed that the maximum aggregate liability of each of the parties with respect to any indemnity obligation hereunder shall be in the case may beof (i) Parent, shall not exceed limited to the Purchase Price (such maximum liability amountprovided that with respect to the Tax Indemnity, the “Cap”maximum aggregate liability shall be as set forth in Section 9.2 above). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) in the event of fraud or willful misrepresentation by the indemnifying party; or (ii) the Company Stockholders limited to indemnification obligations for Damages in connection with (x) a breach the sum of the representations and warranties contained in Sections ‎3.1‎3.1 (“No Violation; Authorization”)value of Parent Common Stock received by each respective Company Stockholder under this Agreement, ‎3.4 (“Capitalization”), ‎3.13 (“Employee Plans; ERISA”), ‎3.16 (“Taxes”), Section ‎3.22 (“Environmental Claims”) and ‎3.33 (“Seller Representations”) or (y) a breach of any covenants of the Company or the Sellers, including, without limitation, Sections ‎5.2 (“Agreement not to Compete or Solicitsigning bonus, and any Parent stock options granted pursuant to Maintain Confidentiality”), ‎6.6 an Employment Agreement with such Company Stockholder (“Tax Covenants”) and ‎6.9 (“Confidentiality Obligations”collectively the "Parent Stock Value"). For the sole purpose purposes of calculating such maximum liability for each Company Stockholder, the "Parent Stock Value" received by each Company Stockholder shall mean the combined value of (x) the value of the Merger Shares received by such Company Stockholder which is the product of (A) the number of Merger Shares received by such Company Stockholder at the Closing which are not subject to Escrow and (B) the value of each such Merger Share received by each Company Stockholder which value shall be deemed as the closing last sale price of the Parent Common Stock on the OTC Bulletin Board, or other national stock exchange, on the earlier of (1) the day the registration of such Merger Shares with the SEC is made effective, (2) the day such Merger Shares are freely tradable by such Company Stockholder pursuant to Rule 144 under the Securities Act, or (3) the day such Company Stockholder or Company is found liable to Parent for an indemnity obligation hereunder, and (y) the total value of the Escrow Shares released from Escrow and delivered to such Company Stockholder (with the value of each such Escrow Share to be deemed the closing last sale price of the Parent Common Stock on the OTC Bulletin Board, or other national stock exchange, on the day immediately prior to the day such Escrow Shares are released from Escrow and delivered to such Company Stockholder). In applying the foregoing and otherwise determining the amount subject to any claim for indemnification, the amount of monetary damages that Buyer may any insurance proceeds received by the Claimant shall be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), deducted from the representations and warranties amount of the Company and the Sellers shall not be deemed qualified by any references to materiality, Material Adverse Effect or Knowledge. All required indemnification payments under Section ‎10.2 shall be deemed adjustments to the Purchase Pricepayments.

Limitations on Indemnification Obligation. The Sellers shall not be liable for indemnification to Buyer under Sections ‎10.2(a)(i?10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers under Section ‎10.2(c)(i?10.2(b)(i), under this Agreement until the aggregate amount of all Claims of Buyer or the Sellers under Sections ‎10.2(a)(i?10.2(a)(i) or ‎10.2(c)(i?10.2(b)(i), as the case may be, exceeds Twenty-Five Thousand Dollars ($25,0005,000) (the “Threshold Amount”), at which time Buyer or the Sellers, as the case may be, shall be entitled to recover the aggregate amount of all Claims, including the Threshold Amount. Buyer shall provide the Sellers, and the Sellers shall provide Buyer, with Notice of all Claims included in the Threshold Amount. The maximum liability of Buyer or the Sellers under this Agreement for indemnification obligations under Sections ‎10.2(a)(i?10.2(a)(i) or ‎10.2(c)(i?10.2(b)(i), as the case may be, shall not exceed the Purchase Price (such maximum liability amount, the “Cap”). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) in the event of fraud or willful misrepresentation by the indemnifying party; or (ii) to indemnification obligations for Damages in connection with (x) a breach of the representations and warranties contained in Sections ‎3.1‎3.1 ?3.1?3.1 (“No Violation; Authorization”), ‎3.4 ?3.4 (“Capitalization”), ‎3.13 ?3.13 (“Employee Plans; ERISA”), ‎3.16 ?3.16 (“Taxes”), ) and Section ‎3.22 ?3.22 (“Environmental Claims”) and ‎3.33 (“Seller Representations”) or (y) a breach of any covenants of the Company or the Sellers, including, without limitation, Sections ‎5.2 (“Agreement not to Compete or Solicit, and to Maintain Confidentiality”), ‎6.6 ?6.55 (“Tax Covenants”) and ‎6.9 6.7 (“Confidentiality Obligations”). For the sole purpose of calculating the amount of monetary damages that Buyer may be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), the representations and warranties of the Company and the Sellers shall not be deemed qualified by any references to materiality, Material Adverse Effect or Knowledge. All indemnification payments under Section ‎10.2 ?10.2 shall be deemed adjustments to the Purchase Price.

Limitations on Indemnification Obligation. The Sellers Seller shall not be liable for indemnification to Buyer under Sections ‎10.2(a)(i10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers Seller under Section ‎10.2(c)(i10.2(b)(i), under this Agreement until the aggregate amount of all Claims of Buyer or the Sellers Seller under Sections ‎10.2(a)(i10.2(a)(i) or ‎10.2(c)(i10.2(b)(i), as the case may be, exceeds Twenty-Five Thousand Dollars ($25,0005,000) (the “"Threshold Amount”"), at which time Buyer or the SellersSeller, as the case may be, shall be entitled to recover the aggregate amount of all Claims, including the Threshold Amount. Buyer shall provide the SellersSeller, and the Sellers Seller shall provide Buyer, with Notice of all Claims included in the Threshold Amount. The maximum liability of Buyer or the Sellers Seller under this Agreement for indemnification obligations under Sections ‎10.2(a)(i10.2(a)(i) or ‎10.2(c)(i10.2(b)(i), as the case may be, shall not exceed the Purchase Price (such maximum liability amount, the “"Cap”"). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) in the event of fraud or willful misrepresentation by the indemnifying party; or (ii) to indemnification obligations for Damages in connection with (x) a breach of the representations and warranties contained in Sections ‎3.1‎3.1 3.1 3.1 (“"No Violation; Authorization”"), ‎3.4 3.4 (“"Capitalization”"), ‎3.13 3.13 (“"Employee Plans; ERISA”"), ‎3.16 3.16 (“"Taxes”), ") and Section ‎3.22 3.22 (“"Environmental Claims”) and ‎3.33 (“Seller Representations”") or (y) a breach of any covenants of the Company or the SellersSeller, including, without limitation, Sections ‎5.2 6.55 (“Agreement not to Compete or Solicit, and to Maintain Confidentiality”), ‎6.6 (“"Tax Covenants”") and ‎6.9 6.7 (“"Confidentiality Obligations”"). For the sole purpose of calculating the amount of monetary damages that Buyer may be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), the representations and warranties of the Company and the Sellers Seller shall not be deemed qualified by any references to materiality, Material Adverse Effect or Knowledge. All indemnification payments under Section ‎10.2 10.2 shall be deemed adjustments to the Purchase Price.

Limitations on Indemnification Obligation. The Sellers shall not be liable for indemnification to Buyer under Sections ‎10.2(a)(i), and Buyer shall not be liable for indemnification to the Sellers under Section ‎10.2(c)(i), 10.2(a)(i) under this Agreement until the aggregate amount of all Claims of Buyer or the Sellers under Sections ‎10.2(a)(iSection 10.2(a)(i) or ‎10.2(c)(i), as the case may be, exceeds TwentyOne Hundred Seventy-Five Thousand Dollars ($25,000175,000) (the “Threshold Amount”), at which time Buyer or the Sellers, as the case may be, shall be entitled to recover the aggregate amount of all Claims, including the Threshold Amount. Buyer shall provide the Sellers, and the Sellers shall provide Buyer, with Notice of all Claims included in the Threshold Amount. The maximum liability of Buyer or the Sellers under this Agreement for indemnification obligations under Sections ‎10.2(a)(i10.2(a)(i) or ‎10.2(c)(i), as the case may be, shall not exceed ten percent (10%) of the Purchase Price (such maximum liability amount, the “Cap”). Notwithstanding the foregoing, the Threshold Amount and the Cap shall not apply: (i) apply in the event of fraud or willful misrepresentation by the indemnifying party; , or (ii) to indemnification obligations for Damages in connection with (x) a breach of the representations and warranties contained in Sections ‎3.1‎3.1 3.1(a)(i), (a)(ii) and (b) (“No Violation; Authorization”), ‎3.4 Section 3.2 (“Due Organization; Subsidiaries”), Sections 3.4 (“Capitalization”), ‎3.13 (“Employee Plans; ERISA”), ‎3.16 3.16 (“Taxes”), Section ‎3.22 3.22 (“Environmental Claims”) and ‎3.33 3.33 (“Seller Representations”) or (y) a breach of any covenants of the Company or the Sellers, including, without limitation, Sections ‎5.2 (“Agreement not to Compete or Solicit, and to Maintain Confidentiality”), ‎6.6 (“Tax Covenants”) and ‎6.9 (“Confidentiality Obligations”). For the sole purpose of calculating the amount of monetary damages that Buyer may be entitled to under this Article X (as opposed to determining if there has been a breach of a representation or warranty), the representations and warranties of the Company and the Sellers shall not be deemed qualified by any references to materiality, materiality or Material Adverse Effect or Knowledgecontained in such representation and warranties. Without limiting the effect of any other limitation contained in this Article X, for purposes of computing the amount of any Damages incurred by any indemnified party under this Article X, there shall be deducted an amount equal to the amount of any actual reduction in Taxes of such indemnified party as shown on a Tax Return of such indemnified party in connection with such Damages. All indemnification payments under Section ‎10.2 10.2 shall be deemed adjustments to the Purchase Price.