Common use of Limitations of Indemnity Clause in Contracts

Limitations of Indemnity. Notwithstanding any provisions herein to the contrary, (i) no Indemnifying Party shall be required to indemnify, defend or hold harmless Indemnified Parties pursuant to Section 3.4, until such time as the aggregate amount of Losses sustained, suffered or incurred, or which may be sustained, suffered or incurred exceeds in the aggregate the sum of $50,000 (the "THRESHOLD AMOUNT"), and then such recovery shall include the full amount of any such Losses, including the Threshold Amount, provided that for the sole purpose of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, and (ii) the aggregate liability of Spectra for Losses as to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP"); provided, however, (1) that the Cap shall not be applicable to a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Sections 3.1(cc) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) that the Threshold Amount shall not be applicable to a Claim for indemnification which may be sought pursuant to Section 3.4(b) and (3) that neither the Threshold Amount nor the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of non-compliance with the covenants set forth in Sections 4.1 (hh), (B) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholders.

Limitations of Indemnity. Notwithstanding The UGH Indemnified Parties’ primary recourse against the Indemnifying Directors with respect to any provisions herein right to indemnification hereunder or other claims arising after the date hereof with respect to the contrary, (i) no Indemnifying Party Mergers or otherwise arising under or with respect to this Agreement shall be required to indemnify, defend or hold harmless Indemnified Parties pursuant to Section 3.4, until such time as the aggregate amount of Losses sustained, suffered or incurred, or which may be sustained, suffered or incurred exceeds in the aggregate Escrow Shares (as defined below) and any disbursement or transfer of the sum Indemnification Escrow Shares to SeaBridge shall first constitute satisfaction of $50,000 (the "THRESHOLD AMOUNT"), and then such recovery shall include the full amount of any such Losses, including the Threshold Amount, provided that for the sole purpose of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, and (ii) the aggregate liability of Spectra for Losses as indemnity obligations to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP")all Indemnified Parties hereunder; provided, however, that nothing contained in this Section 4 shall in any way limit, impair, modify or otherwise affect the rights of a UGH Indemnified Party nor shall there be any limitation of liability of an Indemnifying Director in connection with any of such rights of the UGH Indemnified Party (1) to bring any claim, demand, suit or cause of action otherwise available to the UGH Indemnified Party based upon an allegation or allegations that the Cap shall not be applicable Indemnifying Director, or any of them, had an intent to defraud or made a Claim for indemnification willful misrepresentation or willful omission of a material fact in connection with this Agreement and the transactions contemplated hereby which may be sought pursuant to Section 3.4(a) relating to was relied upon by the UGH Entities or arising out of any alleged misstatement of or omission from the representations and warranties contained in Sections 3.1(cc) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) to enforce any order of a court of competent jurisdiction which finds or determines that the Threshold Amount shall not be applicable Indemnifying Directors had an intent to defraud or made a Claim for indemnification willful misrepresentation or willful omission of a material fact in connection with this Agreement and the transactions contemplated under the Reorganization Agreement which may be sought pursuant to Section 3.4(b) and was relied upon by the UGH Entities, or (3) that neither the Threshold Amount nor Indemnifying Directors may control any defense of third party claims covered by this Agreement if the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to UGH Indemnified Parties cannot or arising out of non-compliance with the covenants set forth in Sections 4.1 (hh), (B) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholderswill not actively defend such claims.

Limitations of Indemnity. Notwithstanding any provisions herein to the contrary, (i) no Indemnifying Party 7.5.1. Neither VASCO nor SSI shall be required to indemnify, defend or hold harmless Indemnified Parties make a Claim for indemnifiable Losses pursuant to Section 3.47.2(a) or Section 7.3(a), until such time as the case may be, unless the aggregate amount of such indemnifiable Losses sustainedfor either VASCO or SSI, suffered or incurredas the case may be, or which may be sustained, suffered or incurred exceeds in the aggregate the sum of Ten Thousand Dollars ($50,000 10,000) (the "THRESHOLD AMOUNT"), and then ) at which point such recovery shall include the full amount of any such indemnifiable Losses, including the Threshold AmountAmount and such claim is made within three (3) years from the Effective Date. Except for Third Party Claims or Losses set forth in Section 7.4.2 above, each of VASCO's and SSI's respective indemnifiable Losses, at any time within the indemnity period (as provided that in the preceding sentence), shall be limited to an amount (such amount being the "CAP") equal to (a) $3,073,093.83 minus (b) the sum of: (i) the then fair market value of the SSI Preferred Stock Certificates held by VASCO plus the value of any consideration received by VASCO for the sole purpose sale of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, shares of such SSI Preferred Stock Certificates; and (ii) the aggregate liability then fair market value of Spectra for Losses as to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP"); providedPromissory Note plus all payments previously made on such Promissory Note, provided however, (1) that if SSI is not then in default on such Promissory Note, the Cap fair market value of the Promissory Note shall not be applicable deemed to a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or its then current balance including interest. For purposes of calculating the amount of an Indemnified Party's Losses incurred by such Indemnified Party arising out of or resulting from any alleged misstatement breach of a representation, covenant or omission from agreement, the representations and warranties contained in Sections 3.1(ccreferences to a "Material Adverse Effect" or materiality (or other correlative terms) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) that shall be disregarded. Neither the Cap nor the Threshold Amount shall apply to, nor shall either in any way limit the right of any party to pursue, any rights, remedies or Claims based on fraud. 7.5.2. SSI shall not be applicable entitled to indemnification under this Article 7, and VASCO shall have no liability whatsoever, for any Claim or Loss arising out of, related to or based on the assistance provided to SSI by employees of VASCO, including without limitation Cliff Bown, in the preparation of the SSI Business Plan. 7.5.3. No party shall be entitled to indemnification under this Article 7 if and to the extent that such party's claim for indemnification is directly or indirectly related to a Claim for indemnification which may be sought pursuant to Section 3.4(b) and (3) that neither the Threshold Amount nor the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to breach by such Person of any representation, warranty, covenant or arising out of non-compliance with the covenants other agreement set forth in Sections 4.1 (hh)this Agreement. 7.5.4. No claim under this Article 7 shall be made unless an Indemnity Notice, (B) or a Claim for indemnification which may be sought pursuant Notice (as applicable) has been given prior to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholdersapplicable survival period.

Limitations of Indemnity. Notwithstanding any provisions herein to the contraryforegoing, (i) no Indemnifying Party amounts shall be required to indemnify, defend or hold harmless Indemnified Parties pursuant to Section 3.4, payable under §9(b)(i)(A) unless and until such time as the aggregate amount of Losses sustained, suffered or incurred, or which may be sustained, suffered or incurred exceeds otherwise payable in the aggregate the sum absence of this clause exceeds $50,000 1,000,000 (the "THRESHOLD AMOUNT"“Deductible”), and then such recovery shall include the full amount of any such Losses, including the Threshold Amount, provided that for the sole purpose of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties which event Sellers shall be disregarded, liable for all amounts in excess of the Deductible and (iipayable under §9(b)(i)(A). In no event shall the amount payable under §9(b)(i)(A) the aggregate liability of Spectra for Losses as to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 15,000,000 (the "CAP"“Cap”); provided, however, (1) that the Cap for a breach of §3(a)(ii) and (v) (Authorization; Ownership of Company Shares), §4(b)(ii) (Authorization; Binding Obligations), §4(f) (Ownership of Subsidiaries) shall be 100% of the Purchase Price. Notwithstanding anything herein to the contrary, the Deductible shall not be applicable apply to a Claim claim for breach of any representation and warranty set forth in §3(a)(ii) and (v) (Authorization; Ownership of Company Shares), §4(a)(iii) (Binding Obligations), §4(d) (Brokers), the first sentence of §4(e) (No Liens), §4(f) (Ownership of Subsidiaries), §4(k) (Tax Matters) or §4(s) (Health Care Laws). Additionally, no claim for indemnification which may shall be sought pursuant brought unless the amount of such claim (or series of related claims in the aggregate) exceeds $10,000. Neither the Cap nor the Deductible shall apply to Section 3.4(aa claim for willful misconduct or fraud. Seller and Buyer have agreed that separate standards will apply to the use of the terms “material,” “in all material respects,” and “Material Adverse Effect” (together, the “Materiality Terms”) relating for purposes of determining the rights to or arising out indemnification under this §9. For purposes of any alleged misstatement of or omission from indemnification, the representations and warranties contained in Sections 3.1(cc) to (kk) §3 and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) that the Threshold Amount shall not be applicable to a Claim for indemnification which may be sought pursuant to Section 3.4(b) and (3) that neither the Threshold Amount nor the Cap §4 shall be applicable to (A) construed as if they were not qualified by the Materiality Terms. As so construed, no indemnification for Adverse Consequences for any representation or warranty, including any representation or warranty containing a Claim for indemnification which may Materiality Term, under §9 shall be sought pursuant to Section 3.4(a) relating to required unless the untruth or arising out of non-compliance with the covenants set forth in Sections 4.1 (hh), (B) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out breach of any alleged misstatement such representation or warranty applied without the relevant Materiality Terms results in Adverse Consequences of $10,000 or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholdersmore.

Limitations of Indemnity. (a) Notwithstanding the foregoing, (i) no amount shall be payable under Section 9.1(a) unless and until the aggregate amount payable by Seller exceeds $150,000 (the “Deductible”), in which event Seller shall only be liable for all amounts in excess of the Deductible, and (ii) no claim for indemnification under Section 9.1(a)(i) shall first be asserted after the two year anniversary of the Closing Date; provided, however, that a claim for indemnification under Sections 4.3 (Authorization; Binding Obligations), 4.7(b) (Title to Stock) and 5.1 (Ownership of Capital Stock), 4.13 (Employee Benefit Plans; ERISA), 4.14 and 7.1 (Taxes), 4.20 (Environmental Matters) and 4.31 (Compliance with Laws) may be asserted at any provisions time prior to the expiration of the statute of limitations applicable thereto. Subject to the following sentence, in no event shall the amount payable under Section 7.1(b) or Section 9.1(a)(i) by Seller exceed (i) with respect to any claims for indemnification asserted on or prior to March 31, 2009, the aggregate Merger Consideration payable to Seller under this Agreement, (ii) with respect to any claims for indemnification asserted after March 31, 2009 but on or prior to the first anniversary of the Closing Date, 66% of the aggregate Merger Consideration payable to Seller under this Agreement, and (ii) with respect to any claims for indemnification asserted after the first anniversary of the Closing Date, 33% of the aggregate Merger Consideration payable to Seller under this Agreement. For purposes of this Section 9.2(a), the value of any share of Buyer Common Stock shall be equal to the closing price of Buyer Common Stock on the NASDAQ Global Market on the date prior to the date requiring a calculation. Notwithstanding anything herein to the contrary, the Deductible shall not apply to a claim for breach of any representation and warranty set forth in Section 4.3 (iAuthorization; Binding Obligations), Section 4.13 (Employee Benefit Plans; ERISA), Section 4.14 and Section 7.1 (Taxes), Section 4.20 (Environmental Matters) no Indemnifying Party or Section 4.30 (Brokers; Certain Expenses) and neither the Deductible nor the other limitations set forth in this Section 9.2(a) shall not apply to a claim for fraud. (b) The liability of Seller under the indemnification provisions of Section 7.1(b) or this Article IX shall be required to indemnify, defend or hold harmless Indemnified Parties recovered first from the proceeds of any available insurance and second from the escrow fund held pursuant to Section 3.4, until such time as the aggregate amount of Losses sustained, suffered or incurred, or which may be sustained, suffered or incurred exceeds in the aggregate the sum of $50,000 Escrow Agreement. (the "THRESHOLD AMOUNT"), and then such recovery shall include the full amount of any such Losses, including the Threshold Amount, provided that for the sole purpose of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, and (iic) the aggregate The liability of Spectra for Losses as to which Buyer under the indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP"); provided, however, (1) that the Cap provisions of this Article IX shall not be applicable subject to a Claim minimum amount in order to assert a claim for indemnification which nor subject to maximum amount of liability. Furthermore, a claim may be sought pursuant asserted against Buyer by Seller at any time prior to Section 3.4(a) relating to or arising out the expiration of any alleged misstatement the statute of or omission from the representations and warranties contained in Sections 3.1(cc) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) that the Threshold Amount shall not be limitations applicable to a Claim for indemnification which may be sought pursuant to Section 3.4(b) and (3) that neither the Threshold Amount nor the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of non-compliance with the covenants set forth in Sections 4.1 (hh), (B) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholdersthereto.

Limitations of Indemnity. Notwithstanding The UGH Indemnified Parties’ primary recourse against the Indemnifying Persons with respect to any provisions herein right to indemnification hereunder or other claims arising after the date hereof with respect to the contrary, (i) no Indemnifying Party Mergers or otherwise arising under or with respect to this Agreement shall be required to indemnify, defend or hold harmless Indemnified Parties pursuant to Section 3.4, until such time as the aggregate amount of Losses sustained, suffered or incurred, or which may be sustained, suffered or incurred exceeds in the aggregate Escrow Shares (as defined below) and any disbursement or transfer of the sum Indemnification Escrow Shares to SeaBridge shall first constitute satisfaction of $50,000 (the "THRESHOLD AMOUNT"), and then such recovery shall include the full amount of any such Losses, including the Threshold Amount, provided that for the sole purpose of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, and (ii) the aggregate liability of Spectra for Losses as indemnity obligations to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP")all Indemnified Parties hereunder; provided, however, that nothing contained in this Section 4 shall in any way limit, impair, modify or otherwise affect the rights of a UGH Indemnified Party nor shall there be any limitation of liability of an Indemnifying Person in connection with any of such rights of the UGH Indemnified Party (1) to bring any claim, demand, suit or cause of action otherwise available to the UGH Indemnified Party based upon an allegation or allegations that the Cap shall not be applicable Indemnifying Person, or any of them, had an intent to defraud or made a Claim for indemnification willful misrepresentation or willful omission of a material fact in connection with this Agreement and the transactions contemplated hereby which may be sought pursuant to Section 3.4(a) relating to was relied upon by the UGH Entities or arising out of any alleged misstatement of or omission from the representations and warranties contained in Sections 3.1(cc) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) to enforce any order of a court of competent jurisdiction which finds or determines that the Threshold Amount shall not be applicable Indemnifying Persons had an intent to defraud or made a Claim for indemnification willful misrepresentation or willful omission of a material fact in connection with this Agreement and the transactions contemplated under the Reorganization Agreement which may be sought pursuant to Section 3.4(b) and was relied upon by the UGH Entities, or (3) that neither the Threshold Amount nor Indemnifying Directors may control any defense of third party claims covered by this Agreement if the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to UGH Indemnified Parties cannot or arising out of non-compliance with the covenants set forth in Sections 4.1 (hh), (B) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholderswill not actively defend such claims.

Limitations of Indemnity. Notwithstanding any provisions herein to the contrary, (i) no Indemnifying Party 7.5.1. Neither VASCO nor SSI shall be required to indemnify, defend or hold harmless Indemnified Parties make a Claim for indemnifiable Losses pursuant to Section 3.47.2(a) or Section 7.3(a), until such time as the case may be, unless the aggregate amount of such indemnifiable Losses sustainedfor either VASCO or SSI, suffered or incurredas the case may be, or which may be sustained, suffered or incurred exceeds in the aggregate the sum of Ten Thousand Dollars ($50,000 10,000) (the "THRESHOLD AMOUNTThreshold Amount"), and then ) at which point such recovery shall include the full amount of any such indemnifiable Losses, including the Threshold AmountAmount and such claim is made within three (3) years from the Effective Date. Except for Third Party Claims or Losses set forth in Section 7.4.2 above, each of VASCO's and SSI's respective indemnifiable Losses, at any time within the indemnity period (as provided that in the preceding sentence), shall be limited to an amount (such amount being the "Cap") equal to (a) $3,073,093.83 minus (b) the sum of: (i) the then fair market value of the SSI Preferred Stock Certificates held by VASCO plus the value of any consideration received by VASCO for the sole purpose sale of calculating whether the Threshold Amount has been reached, any materiality provisions contained in the representations and warranties shall be disregarded, shares of such SSI Preferred Stock Certificates; and (ii) the aggregate liability then fair market value of Spectra for Losses as to which indemnification may be sought pursuant to Section 3.4 shall not exceed $7,365,500 (the "CAP"); providedPromissory Note plus all payments previously made on such Promissory Note, provided however, (1) that if SSI is not then in default on such Promissory Note, the Cap fair market value of the Promissory Note shall not be applicable deemed to a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to or its then current balance including interest. For purposes of calculating the amount of an Indemnified Party's Losses incurred by such Indemnified Party arising out of or resulting from any alleged misstatement breach of a representation, covenant or omission from agreement, the representations and warranties contained in Sections 3.1(ccreferences to a "Material Adverse Effect" or materiality (or other correlative terms) to (kk) and Section 3.1(yyy) relating to Spectra's Intellectual Property, (2) that shall be disregarded. Neither the Cap nor the Threshold Amount shall apply to, nor shall either in any way limit the right of any party to pursue, any rights, remedies or Claims based on fraud. 7.5.2. SSI shall not be applicable entitled to indemnification under this Article 7, and VASCO shall have no liability whatsoever, for any Claim or Loss arising out of, related to or based on the assistance provided to SSI by employees of VASCO, including without limitation Cliff Bown, in the pxxxxxxxxxx of the SSI Business Plan. 7.5.3. No party shall be entitled to indemnification under this Article 7 if and to the extent that such party's claim for indemnification is directly or indirectly related to a Claim for indemnification which may be sought pursuant to Section 3.4(b) and (3) that neither the Threshold Amount nor the Cap shall be applicable to (A) a Claim for indemnification which may be sought pursuant to Section 3.4(a) relating to breach by such Person of any representation, warranty, covenant or arising out of non-compliance with the covenants other agreement set forth in Sections 4.1 (hh)this Agreement. 7.5.4. No claim under this Article 7 shall be made unless an Indemnity Notice, (B) or a Claim for indemnification which may be sought pursuant Notice (as applicable) has been given prior to Section 3.4(a) relating to or arising out of any alleged misstatement of or omission from the representations and warranties contained in Section 3.1(w) relating to loans to current or former employees, directors or consultants of Spectra or (C) a Claim that is based on fraud on the part of Spectra or the Spectra Shareholdersapplicable survival period.