Limitations on Warranty Claims. The limitations set out in this clause 6 shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 2 contracts
Samples: Subscription and Shareholders' Agreement, Subscription and Shareholders' Agreement
Limitations on Warranty Claims. 4.3.1. The limitations set out in this clause 6 Purchaser and/or Workstream shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser and/or Workstream has been advised in writing or otherwise has actual knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfilment or breach which is the basis for such Warranty Claim and the Purchaser and/or Workstream completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfilment or breach.
4.3.2. The amount of any damages which may be claimed by the Purchaser and/or Workstream pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser and/or Workstream after giving effect to any insurance proceeds available to the Purchaser and/or Workstream in relation to the matter which is the subject of the Warranty Claim.
4.3.3. The Purchaser and/or Workstream shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser and/or Workstream as a result of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account section 4.3.2 of this section, is capable equal to $15,000. After the aggregate amount of remedy such damages, losses, liabilities and is remedied expenses incurred by the Purchaser and/or Workstream exceeds $15,000, the Purchaser and/or Workstream shall only be entitled to make Warranty Claims to the reasonable satisfaction extent that such aggregate amount, after taking into account the provisions of section 4.3.2 of this section, exceeds $15,000.
4.3.4. Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability Vendor together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser and/or Workstream will be limited to an amount equal to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rightsPurchase Price.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 2 contracts
Samples: Asset Purchase Agreement (Workstream Inc), Asset Purchase Agreement (Peopleview Inc)
Limitations on Warranty Claims. The limitations set out in this clause 6 shall not apply to any Claim which is: (a) Neither the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of Purchaser nor the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors Vendor shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser or the Vendor, as applicable, has been advised in writing or otherwise has actual knowledge prior to the Completion Time of the inaccuracy, non-performance, non-fulfillment or breach which is the basis for such Warranty Claim and the Purchaser or the Vendor, as applicable, completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfillment or breach.
(b) The amount of any damages which may be claimed by the Purchaser or the Vendor, as applicable, pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser or the Vendor, as applicable, after giving effect to:
(i) any insurance proceeds available to the Purchaser or the Vendor, as applicable, in relation to the matter which is the subject of the Claim is capable Warranty Claim, and
(ii) the value of remedy and is remedied any related, determinable tax benefits realized, or to be realized within a two year period following the date of incurring such cost or loss, by the Purchaser or the Vendor, as applicable, in relation to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability matter which is the subject of the Warranty Claim.
(c) The Purchaser or the Vendor, as applicable, shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser or the Vendor, as applicable, as a Claimresult of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account paragraph (b) of this section, is equal to $100,000. [At After the option aggregate amount of each Founder but at all times subject such damages, losses, liabilities and expenses incurred by the Purchaser or the Vendor, as applicable, exceeds $100,000, the Purchaser or the Vendor, as applicable, shall only be entitled to Investor Majority Consentmake Warranty Claims to the extent that such aggregate amount, after taking into account the provisions of paragraph (b) of this section, exceeds $100,000.
(d) Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, except the provisions of section 2.7(c), which shall not be so limited, the maximum aggregate liability of the Vendor or the Purchaser, as applicable, together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant FounderPurchaser or the Vendor, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred as applicable, will be limited to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights$1,500,000.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. (1) The limitations set out in this clause 6 Purchaser shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser has been advised in writing or otherwise has actual knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfilment or breach which is the basis for such Warranty Claim and the Purchaser completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfilment or breach.
(2) The amount of any damages which may be claimed by the Purchaser pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser after giving effect to
(a) any insurance proceeds available to the Corporation in relation to the matter which is the subject of the Claim is capable Warranty Claim, and
(b) the value of remedy and is remedied any related, determinable tax benefits realized, or which will (with reasonable certainty) be realized within a 3 year period following the date of incurring such cost or loss, by the Corporation or the Purchaser in relation to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability matter which is the subject of the Warranty Claim.
(3) The Purchaser shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser as a Claimresult of all misrepresentations and breaches of warranties contained in this agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account paragraph (2) of this section, is equal to $ 100,000.00. [At After the option aggregate amount of each Founder but at all times subject such damages, losses, liabilities and expenses incurred by the Purchaser exceeds $100,000.00, the Purchaser shall only be entitled to Investor Majority Consentmake Warranty Claims to the extent that such aggregate amount, after taking into account the provisions of paragraph (2) of this section, exceeds $ 100,000.00.
(4) Notwithstanding any other provisions of this agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Vendor together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser will be limited to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights$100,000.00.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Samples: Share Purchase Agreement (Futurelink Distribution Corp)
Limitations on Warranty Claims. 8.1 The limitations set out in this clause 6 shall not apply to Purchaser acknowledges and agrees with the Seller that:
8.1.1 the Warranties are the only representations, warranties or other assurances of any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation kind given by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 Seller and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; Purchaser may rely in entering into and performing this Agreement;
8.1.2 no other statement, promise or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise forecast made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the InvestorsSeller may be relied on or form the basis of, or be pleaded in connection with, any claim by the Purchaser under or in connection with this Agreement; and
8.1.3 any claim by the Purchaser or any person deriving title from it in connection with the Warranties (a “Warranty Claim”) shall be subject to the following provisions of this Clause.]
8.2 The Warrantors liability of the Seller under or in respect of this Agreement shall be limited as follows:
8.2.1 any breach of the Warranties in respect of which the amount of the damages to which the Purchaser would otherwise be entitled is less than Euro 25,000 will be disregarded for all purposes;
8.2.2 the Purchaser shall not be liable entitled to recover any damages unless the amount of damages in respect of any Claim unless such breach or breaches (damages in respect of each breach individually exceeding the amount stipulated in Clause 8.2.1 above), exceeds in aggregate the sum of Euro 250,000; and
8.2.3 the maximum aggregate liability of the Seller in respect of this Agreement shall not exceed the amount of the Consideration, with the exception of the matters set out in Paragraph 4 of Schedule 1.
8.3 If the Warranty Claim in question is as a result of or in connection with a liability or alleged liability to a third party:
8.3.1 the Purchaser shall procure the Company or the Subsidiaries, as the case may be, to take such action to avoid, dispute, resist, appeal, compromise or contest the liability as may be requested by the Seller which shall be entitled to have the conduct of any appeal, dispute, compromise or defence of the dispute and of any incidental negotiations but at the Seller’s expense; and
8.3.2 the Purchaser shall procure the Company or the Subsidiaries, as the case may be, to make available to the Seller such persons and all such information as the Seller may reasonably require for all Claims exceeds £ [Note: insert amount]avoiding, disputing, resisting, appealing, compromising or contesting any such liability.
8.4 The Seller shall cease to have any liability under or in respect of the Warranties on the date which is two (2) years after Completion, except in respect of:
8.4.1 a Warranty Claim in respect of the matters set out in Paragraph 4 of Schedule 1, in which case the Warrantors Seller shall be liable cease to have any liability only after 21 September 2009; or
8.4.2 a Warranty Claim under any other Paragraph of Schedule 1 of which the Purchaser gives written notice to the Seller before the expiry of the two (2) year period and in accordance with Clause 8.3 above.
8.5 If the Seller makes any payment by way of damages for breach of the Warranties (the “Damages Payment”) and the Company, the Subsidiaries or any member of the Purchaser’s Group receives any benefit otherwise than from the Seller which would not have been received but for the entire circumstance giving rise to the claim in respect of which the Damages Payment was made the Purchaser shall, once it or the Company or the Subsidiaries or the member of the Purchaser’s Group has received such benefit, immediately repay to the Seller an amount equal to the lesser of the amount of such benefit and not merely the excess. [In calculating liability for Claims for Damages Payment.
8.6 Where the purposes of clause 6.4 aboveSeller has made a payment to the Purchaser in respect of, or relating to, any Claim which is less than £ claim under the Warranties and the Company, the Subsidiaries or the Purchaser have a right of reimbursement against any other person in respect of or relating to that claim the Purchaser shall notify the Seller as soon as reasonably possible of that fact and shall (excluding interest, if indemnified to its reasonable satisfaction against the costs and expensesexpenses of taking such action) shall be disregarded. For these purposes, a number of Claims arising out of the same take all reasonable steps or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claimproceedings to enforce such right.] No liability of the Warrantors
8.7 If any amount in respect of any breach of the Warranties is paid by the Seller to the Purchaser and any Warranty shall arise: if subsequent event or circumstances happens or arises by virtue of which the loss attributable to such breach occurs by reason of any matter which would not have arisen but for is reduced or removed altogether, then the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; Purchaser shall forthwith repay to the extent Seller that specific allowance, provision amount or reserve the appropriate proportion thereof less the Purchaser’s reasonable costs and expenses (if any) incurred in recovering any relevant amount.
8.8 The parties acknowledge and agree that the Consideration has been made calculated to take account of limitations on the Seller’s liability agreed by the parties in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). this Agreement.
8.9 The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors Seller shall not be liable for any Claim if unless it receives from the alleged breach which is the subject Purchaser written notice containing details of the Claim is capable of remedy and is remedied to including the reasonable satisfaction Purchaser’s estimate (on a without prejudice basis) of the Investors amount of such Claim as soon as reasonably practicable.
8.10 If the Purchaser becomes aware that any claim has been made against the Company or the Seller, by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability a third party after Completion which is likely to result in the subject of Purchaser being entitled to make a Claim. [At Claim against the option of each Founder but at all times subject to Investor Majority Consent, any liability Seller in respect of a breach of any Claims may be settled (in whole or in part) in Shares held by Warranty the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] Purchaser shall give notice of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred claim to the Investors shall, if they are Ordinary Shares, be re-designated Seller as Series A Shares soon as reasonably practicable and each of shall give the parties (other than the Company) hereby irrevocably agrees Seller all reasonable facilities to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of investigate any such pre-emption rightsclaim.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Samples: Share Purchase Agreement (Hungarian Telephone & Cable Corp)
Limitations on Warranty Claims. 8.1 The limitations set out in this clause 6 shall not apply to Purchaser acknowledges and agrees with the Seller that:
8.1.1 the Warranties are the only representations, warranties or other assurances of any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation kind given by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 Seller and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; Purchaser may rely in entering into and performing this Agreement;
8.1.2 no other statement, promise or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise forecast made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the InvestorsSeller may be relied on or form the basis of, or be pleaded in connection with, any claim by the Purchaser under or in connection with this Agreement; and
8.1.3 any claim by the Purchaser or any person deriving title from it in connection with the Warranties (a “Warranty Claim”) shall be subject to the following provisions of this Clause.]
8.2 The Warrantors liability of the Seller under or in respect of this Agreement shall be limited as follows:
8.2.1 any breach of the Warranties in respect of which the amount of the damages to which the Purchaser would otherwise be entitled is less than Euro 25,000 will be disregarded for all purposes;
8.2.2 the Purchaser shall not be liable entitled to recover any damages unless the amount of damages in respect of any Claim unless such breach or breaches (damages in respect of each breach individually exceeding the amount stipulated in Clause 8.2.1 above), exceeds in aggregate the sum of Euro 250,000; and
8.2.3 the maximum aggregate liability of the Seller in respect of this Agreement shall not exceed the amount of the Consideration, with the exception of the matters set out in Paragraph 4 of Schedule 1 and in the Declaration under Schedule 3, in respect of which matters the Seller’s liabilities are regulated in accordance with the respective agreements (or in the absence of such regulation, in accordance with the provisions of the applicable law).
8.3 If the Warranty Claim in question is as a result of or in connection with a liability or alleged liability to a third party:
8.3.1 the Purchaser shall procure the Company or the Subsidiaries, as the case may be, to take such action to avoid, dispute, resist, appeal, compromise or contest the liability as may be requested by the Seller which shall be entitled to have the conduct of any appeal, dispute, compromise or defence of the dispute and of any incidental negotiations but at the Seller’s expense; and
8.3.2 the Purchaser shall procure the Company or the Subsidiaries, as the case may be, to make available to the Seller such persons and all such information as the Seller may reasonably require for all Claims exceeds £ [Note: insert amount]avoiding, disputing, resisting, appealing, compromising or contesting any such liability.
8.4 The Seller shall cease to have any liability under or in respect of the Warranties on the date which is two (2) years after Completion, except in respect of:
8.4.1 a Warranty Claim in respect of the matters set out in Paragraph 4 of Schedule 1 and in the Declaration under Schedule 3, in which case the Warrantors Seller shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not cease to have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claimonly after 31 March 2048; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Samples: Share Purchase Agreement (Hungarian Telephone & Cable Corp)
Limitations on Warranty Claims. (1) The limitations set out in this clause 6 shall not apply Purchaser acknowledges to and agrees with the Seller that:
(a) the Warranties are the only representations, warranties or other assurances of any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation kind given by or on behalf of the Warrantors; Seller or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details any member of the Claim by (i) no later than the date which is six months after the date Remaining Group and on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under Purchaser may rely in entering into and performing this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company;
(b) no other statement, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred promise or forecast made by or on behalf of the InvestorsSeller or any other member of the Remaining Group may be relied on or form the basis of, or be pleaded in connection with, any claim by the Purchaser under or in connection with this agreement;
(c) any claim by the Purchaser in connection with the Warranties (a "WARRANTY CLAIM") shall be subject to the following provisions of this Clause; and
(d) at the time of entering into this agreement it is not aware of any matter or thing which is inconsistent with the Warranties or constitutes a breach of any of them and which, in either case, the Purchaser might reasonably recognise as something which could lead to a Warranty Claim being made against the Seller.]
(2) The Warrantors liability of the Seller shall be limited as follows:
(a) the Seller shall not be liable in respect of any Claim unless breach of the aggregate liability Warranties if and to the extent that the matter giving rise to the breach is the subject of a claim under the Environmental Indemnity or the Tax Deed;
(b) there shall be disregarded for all Claims exceeds £ [Note: insert amount], purposes any breach of the Warranties in respect of which case the Warrantors shall amount of the damages to which the Purchaser would otherwise be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which entitled is less than £ (excluding interest, costs and expensesPounds)20,000;
(c) the Purchaser shall not be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors entitled to recover any damages in respect of any breach or breaches of the Warranties unless the amount of damages in respect of such breach or breaches, exceeds in aggregate the sum of (Pounds)100,000 when the whole of such amount shall be recoverable; and
(d) the maximum aggregate liability of the Seller in respect of all and any Warranty Claims (and any claims under the Tax Deed) and under the Environmental Indemnity shall arise: if such breach occurs by reason not exceed the Consideration.
(3) The Purchaser shall not be entitled to make any Warranty Claim:
(a) to the extent that provision or allowance for the matter or liability which would otherwise give rise to the claim in question has been specifically made in the Accounts;
(b) in respect of anything arising directly or indirectly from any transaction, matter which or thing fairly disclosed in the Disclosure Letter;
(c) to the extent that the claim would not have arisen but for a change in legislation announced or enacted on or after the coming into force date of this agreement (whether relating to Taxation, rates of Taxation or otherwise) or the withdrawal after the date of this agreement of any legislation practice or extra-statutory concession previously published by the Inland Revenue or other taxing authority (whether or not the change purports to be effective retrospectively in force at the Completion Date whole or by reason of any change to HMRC’s practice occurring after the Completion Date; in part);
(d) to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change changes in the accounting bases policies or policies in accordance with practices upon which the Company values its Companies value their respective assets or calculate its liabilities or made after Completion unless such changes are either:
(i) necessary to comply with generally accepted accounting principles statements of standard accounting practice; or
(ii) to obtain an auditors' opinion that the accounts of any other change in accounting practice from the treatment or application of the same used Companies give a true and fair view of the affairs of that company;
(e) to the extent occasioned by any voluntary act or omission of any member of the Purchaser's Group or one of the Companies after Completion where the member of the Purchaser's Group or the relevant Company knew or ought reasonably to have known that such act or omission would or might give rise to the liability in preparing question; or
(f) in respect of anything arising from any matter or thing of which any member of the Accounts Purchaser's Group is aware as being something which could lead to a Warranty Claim being made against the Seller; or
(save g) to the extent that such changes are required any loss or liability is caused or increased by the Purchaser's failure to correct errors mitigate; or
(h) to the extent that the claim arises from the Purchaser's failure to perform its obligations under subclause (4) below, and to the extent that any Warranty Claim is increased as a result of any of the matters set out in this subclause, the Seller shall not be liable in respect of the amount by which any claim is so increased.
(4) If the Purchaser or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled one of the Companies becomes aware of a matter which could give rise to make a Warranty Claim (other than a Warranty Claim in respect of liability a breach of a Warranty contained in Part B of Schedules 3 and 4, to which is contingent or unascertained provided that the provisions of clause 10 of the Tax Deed shall apply as if the Warranty Claim were a Tax Claim) the Purchaser shall give written notice of the Claim (giving relevant facts as far soon as practical the amount reasonably practicable and details in any event within 45 days of the Claim) is given Purchaser or one of the Companies becoming aware of those facts, unless the Warranty Claim relates to a matter where there has been an assessment, notice or other document served on one of the Warrantors before Companies in respect of Taxation in circumstances where there are statutory time limits for appealing against or otherwise responding to any such notice or other document, the expiry Purchaser shall give written notice of the relevant periods specified facts to the Seller as soon as reasonably practicable and in clause 6.2any event within 30 days provided that, in each case, the Purchaser's failure to give notice within the 45 or 30 day limit (as applicable) shall not be an absolute bar to that claim. In addition, (subject to the provisions of the Tax Deed in relation to any matter which may form the subject of a claim under it) if the Warranty Claim in question is as a result of or in connection with a liability or alleged liability to a third party:
(a) the Purchaser shall procure the Companies to take such action to avoid, dispute, resist, appeal, compromise or contest the liability as may reasonably be requested by the Seller and the Purchaser shall not, and shall ensure that none of the Companies shall, admit liability in respect of, or compromise or settle the matter, without the prior written consent of the Seller (not to be unreasonably withheld or delayed), provided that nothing in this subclause 5(4)(a) shall require the Purchaser or any Company to take any action which it reasonably considers likely to adversely affect its or the Companies' relationships with customers or suppliers or to result in the Purchaser or any of the Companies incurring any expenditure which the Seller has not agreed to reimburse to the Purchaser or Company concerned; and
(b) the Purchaser shall procure the relevant Companies to make available to the Seller such employees or officers of the companies or other members of the Purchaser's Group and all such information as the Seller may reasonably require for avoiding, disputing, resisting, appealing, compromising or contesting any such liability.
(5) The Warrantors Seller shall cease to have any liability under or in respect of the Warranties:
(a) on the seventh anniversary of the date of this agreement in respect of Warranties B.1 to B.17 in Schedule 3 and B.1 in Schedule 4; or
(b) (in respect of any other Warranties) on the date which is 20 months after the date of this agreement, except in respect of a Warranty Claim of which the Purchaser gives written notice (setting out the Warranty Claim in reasonable detail) to the Seller before the relevant date and in accordance with subclause 5(4) but the liability of the Seller in respect of any Warranty Claim shall terminate absolutely if proceedings in respect of it have not been commenced within twelve months of service of notice of that Warranty Claim.
(6) Without prejudice to the Purchaser's duty to mitigate any loss in respect of any breach of the Warranties, if, in respect of any matter which would otherwise give rise to a breach of the Warranties, one of the Companies is entitled to claim under any policy of insurance the amount of insurance monies to which that Company recovers shall reduce pro tanto or extinguish the claim for breach of the Warranties.
(7) If the Seller makes any payment by way of damages for breach of the Warranties (the "DAMAGES PAYMENT") and one of the Companies or any member of the Purchaser's Group receives any benefit otherwise than from the Seller which would not have been received but for the circumstance giving rise to the claim in respect of which the Damages Payment was made the Purchaser shall, once it or one of the Companies or the member of the Purchaser's Group has received such benefit net of taxation thereon and any reasonable costs of recovery, immediately repay to the Seller an amount equal to the lesser of the amount of such benefit net of taxation thereon and any reasonable costs of recovery and the Damages Payment.
(8) Where the Seller has made a payment to the Purchaser in respect of, or relating to, any claim under the Warranties and one of the Companies or the Purchaser has a right of reimbursement against any other person in respect of or relating to that claim the Purchaser shall notify the Seller within a reasonable period of that fact and shall take all reasonable steps or proceedings to enforce such right provided that nothing in this subclause (8) shall require the Purchaser or any Company to take any action which it reasonably considers is likely to materially adversely affect its or that Company's relationship with customers or suppliers and provided that the Seller shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate extent that any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole caused or in part) in Shares held increased by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser's failure to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rightsmitigate.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. (a) The limitations set out in this clause 6 Purchaser shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser has been advised in writing or otherwise has actual knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfilment or breach which is the basis for such Warranty Claim and the Purchaser completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfilment or breach.
(b) The amount of any damages which may be claimed by the Purchaser pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser after giving effect to:
(i) any insurance proceeds available to the Corporation in relation to the matter which is the subject of the Claim is capable Warranty Claim, and
(ii) the value of remedy and is remedied any related, determinable tax benefits realised, or which will (with reasonable certainty) be realised within a 2 year period following the date of incurring such cost or loss, by the Corporation or the Purchaser in relation to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability matter which is the subject of the Warranty Claim.
(c) The Purchaser shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser as a Claimresult of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account (b) of this section, is equal to $100,000.00. [At After the option aggregate amount of each Founder but at all times subject such damages, losses, liabilities and expenses incurred by the Purchaser exceeds $100,000.00, the Purchaser shall only be entitled to Investor Majority Consentmake Warranty Claims to the extent that such aggregate amount, after taking into account the provisions of paragraph (b) of this section, exceeds $200,000.00.
(d) Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Corporation and the Shareholder together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser will be limited to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights$500,000.00.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Samples: Acquisition Agreement (Jupiter Global Holdings Corp)
Limitations on Warranty Claims. 4.3.1. The limitations set out in this clause 6 Purchaser and/or Workstream shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser and/or Workstream has been advised in writing or otherwise has actual knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfilment or breach which is the basis for such Warranty Claim and the Purchaser and/or Workstream completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfilment or breach.
4.3.2. The amount of any damages which may be claimed by the Purchaser and/or Workstream pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser and/or Workstream after giving effect to any insurance proceeds available to the Purchaser and/or Workstream in relation to the matter which is the subject of the Warranty Claim.
4.3.3. The Purchaser and/or Workstream shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser and/or Workstream as a result of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account section 4.3.2 of this section, is capable equal to $20,000. After the aggregate amount of remedy such damages, losses, liabilities and is remedied expenses incurred by the Purchaser and/or Workstream exceeds $20,000, the Purchaser and/or Workstream shall only be entitled to make Warranty Claims to the reasonable satisfaction extent that such aggregate amount, after taking into account the provisions of section 4.3.2 of this section, exceeds $20,000.
4.3.4. Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability Vendor together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser and/or Workstream will be limited to an amount equal to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rightsPurchase Price.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. The limitations set out in this clause 6 shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in Parties with respect of all and to any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of claims under Subsections 10.1.2 or 10.2.2 (each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expensesa “Warranty Claim”) shall be disregarded. For these purposes, subject to the following:
10.3.1 The amount of any damages which may be claimed by a number of Claims arising out of the same or similar subject matter, facts, events or circumstances Party pursuant to a Warranty Claim shall be aggregated calculated to be the Loss to such Party after giving effect to any insurance proceeds available to such Party and form a single Claim.] No liability of the Warrantors any and all recoveries from any other Persons against which there may be indemnity rights pursuant to Contracts in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; relation to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Warranty Claim. A Party shall use all commercially reasonable efforts to collect such insurance proceeds or claims with respect to indemnity rights against other Persons under the Contracts;
10.3.2 That no Warranty Claim for Losses may be made by either the Vendor or the Purchaser for any individual item where the Loss relating thereto is capable less than fifty thousand dollars ($50,000) and any items which are less than such amount shall not be aggregated for the purposes of remedy and Section 10.3.3;
10.3.3 The Purchaser shall not be entitled to make any Warranty Claim until the aggregate amount of all Losses incurred by its as a result of all breaches of warranties contained in this Agreement, after taking into account Section 10.3.1, is remedied equal to $1,100,000. After the reasonable satisfaction aggregate amount of the Investors such Losses incurred by the Warrantors within 30 days of Purchaser exceeds $1,100,000, the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement Purchaser shall prejudice each Investor’s duty under common law be entitled to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability make Warranty Claims only in respect of Losses which exceed, in the aggregate $1,100,000;
10.3.4 Notwithstanding any Claims may be settled (other provisions of this Agreement or of any agreement, certificate or other document made in whole or in part) in Shares held by order to carry out the relevant Foundertransactions contemplated hereby, whereby the number of Shares is calculated by dividing the value maximum aggregate liability of the Claim by Vendors in respect of all Warranty Claims will be limited to $45,000,000;
10.3.5 Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the [lower of (i) transactions contemplated hereby, the Fair Value [Note: add definition] of such Shares at the time maximum aggregate liability of the settlement Purchaser in respect of all Warranty Claims will be limited to the Share Value of the Claim; and (ii) the] Subscription Purchase Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
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Limitations on Warranty Claims. 6.1. The limitations set out in this clause 6 shall not apply to any Claim which is: :
(a) the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or or
(b) which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5.
6.2. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement.
6.3. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: :
(a) in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and and
(b) in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] ]
6.4. The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ • [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess.
6.5. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ • (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] ]
6.6. No liability of the Warrantors in respect of any breach of any Warranty shall arise: :
(a) if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; ;
(b) to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; ;
(c) to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with).
6.7. The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2.
6.8. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach.
6.9. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim.
6.10. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
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Limitations on Warranty Claims. 4.3.1. The limitations set out in this clause 6 Purchaser and/or Workstream shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser and/or Workstream has been advised in writing or otherwise has actual knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfilment or breach which is the basis for such Warranty Claim and the Purchaser and/or Workstream completes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfilment or breach.
4.3.2. The amount of any damages which may be claimed by the Purchaser and/or Workstream pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser and/or Workstream after giving effect to any insurance proceeds available to the Purchaser and/or Workstream in relation to the matter which is the subject of the Warranty Claim.
4.3.3. The Purchaser and/or Workstream shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser and/or Workstream as a result of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account section 4.3.2 of this section, is capable equal to $5,000. After the aggregate amount of remedy such damages, losses, liabilities and is remedied expenses incurred by the Purchaser and/or Workstream exceeds $5,000, the Purchaser and/or Workstream shall only be entitled to make Warranty Claims to the reasonable satisfaction extent that such aggregate amount, after taking into account the provisions of section 4.3.2 of this section, exceeds $5,000.
4.3.4. Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability Vendor together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser and/or Workstream will be limited to an amount equal to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated Purchase Price actually received by this clause 6.10 to proceed free of any such pre-emption rightsVendor.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. (1) The limitations set out in this clause 6 shall not apply Purchaser acknowledges to and agrees with the Seller that:
(a) the Warranties are the only representations, warranties or other assurances of any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation kind given by or on behalf of the Warrantors; Seller or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details any other member of the Claim by (i) no later than the date which is six months after the date Seller's Group and on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under Purchaser may rely in entering into and performing this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company;
(b) no other statement, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred promise or forecast made by or on behalf of the InvestorsSeller or any other member of the Seller's Group may be relied on or form the basis of, or be pleaded in connection with, any claim by the Purchaser under or in connection with this agreement;
(c) any claim by the Purchaser in connection with the Warranties (a "Warranty Claim") shall be subject to the following provisions of this clause; and
(d) at the time of entering into this agreement it will not take action in respect of any matter of which it is actually aware which would give rise to a Warranty Claim immediately after Completion.]
(2) The Warrantors liability of the Seller under or in respect of the Warranties shall be limited as follows:
(a) the Seller shall not be liable in respect of any Claim unless breach of the Warranties if and to the extent that the matter giving rise to the breach is the subject of a successful claim under the Tax Deed;
(b) there shall be disregarded for all purposes any breach, or any number of connected breaches, of the Warranties in respect of which the aggregate liability for all Claims exceeds £ [Note: insert amount], in amount of the damages to which case the Warrantors shall Purchaser would otherwise be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which entitled is less than £ (excluding interest, costs and expensespound)10,000;
(c) the Purchaser shall not be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors entitled to recover any damages in respect of any breach or breaches of the Warranties unless the amount of damages in respect of such breach or breaches exceeds in aggregate the sum of (pound)100,000; and
(d) the maximum aggregate liability of the Seller in respect of all and any Warranty Claims (and any claims under the Tax Deed) shall arise: not exceed the Consideration.
(3) The Purchaser shall not be entitled to make any Warranty Claim:
(a) to the extent that specific provision or allowance for the matter or liability which would otherwise give rise to the claim in question has been made or falls to be made in the Accounts, the Completion Accounts or the calculation of the Deferred Payment or it is otherwise specifically taken account of in the Accounts, the Completion Accounts or the calculation of the Deferred Payment;
(b) in respect of anything arising directly or indirectly from any transaction, matter or thing fairly disclosed in the Disclosure Letter or in the documents specifically referred to in paragraphs 1 to 47 of Part A of the Disclosure Letter and paragraphs 1 to 24 of Part B of the Disclosure Letter, or in the Final Disclosure Letter;
(c) if such breach occurs by reason of any matter which the claim would not have arisen but for a change in legislation announced or enacted on or after the coming into force date of this agreement (whether relating to Taxation, rates of Taxation or otherwise) or the withdrawal after the date of this agreement of any legislation practice or extra-statutory concession previously published by the Inland Revenue or other taxing authority (whether or not the change purports to be effective retrospectively in force at the Completion Date whole or by reason of any change to HMRC’s practice occurring after the Completion Date; in part);
(d) to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change changes in the accounting bases policies or policies in accordance with practices upon which the any Group Company values its assets made after Completion;
(e) to the extent occasioned by any voluntary act or calculate its liabilities or omission of any other change in accounting practice from the treatment or application member of the same used in preparing Purchaser's Group or the Accounts Group Companies after Completion done or suffered outside the ordinary course of business and other than pursuant to a legally binding obligation entered into by any Group Company before Completion; or
(save f) to the extent that any loss or liability is caused or increased by the failure of any member of the Purchaser's Group to mitigate any loss suffered by it, and to the extent that any Warranty Claim is increased as a result of any of the matters set out in this subclause, the Seller shall not be liable in respect of the amount by which any claim is so increased.
(4) If the Purchaser or any of the Group Companies becomes aware of a matter which is likely to give rise to a Warranty Claim:
(a) the Purchaser shall give written notice of the relevant facts to the Seller as soon as reasonably practicable; and
(b) the Purchaser shall claim under any applicable policy of insurance before making a Warranty Claim against the Seller but without prejudicing its ability to notify a claim within the relevant period.
(5) Subject to the provisions of the Tax Deed in relation to any matter which may form the subject of a claim under it, if the Warranty Claim in question is as a result of or in connection with a liability or alleged liability to a third party:
(a) the Purchaser shall procure the relevant Group Company to take such changes are required action to correct errors avoid, dispute, resist, appeal, compromise or because relevant generally accepted accounting principles have not been complied with). The Investors contest the liability as may be reasonably requested by the Seller which shall be entitled to have the conduct of any appeal, dispute, compromise or defence of the dispute and of any incidental negotiations and the Seller shall, to the extent reasonably practicable, keep the Purchaser fully informed of such matters; and
(b) the Purchaser shall procure the relevant Group Company to make a Claim available to the Seller such persons and all such information as the Seller may reasonably require for avoiding, disputing, resisting, appealing, compromising or contesting any such liability; in each case provided that the Purchaser and the relevant Group Company is indemnified to its reasonable satisfaction against the costs and expenses of taking such action including all reasonable legal and professional expenses.
(6) The Seller shall, in the absence of fraud or wilful concealment, cease to have any liability under or in respect of liability the Warranties:
(a) on the seventh anniversary of the date of this agreement in respect of Warranties in Part B of Schedule 3;
(b) on 31st October, 2001 in respect of any other Warranties, except in respect of a Warranty Claim of which is contingent or unascertained provided that the Purchaser gives written notice to the Seller before the relevant date and in accordance with subclause (3) but the liability of the Seller in respect of any Warranty Claim (giving as far as practical the amount and details shall terminate if proceedings in respect of it have not been commenced within six months of the Claim) is given to the Warrantors before the expiry termination of the relevant periods specified period in clause 6.2. subclause (6) above.
(7) The Warrantors Seller shall, in the absence of fraud or wilful concealment, cease to have any liability under or in respect of the Tax Deed on the seventh anniversary of Completion.
(8) Without prejudice to the Purchaser's duty to mitigate any loss in respect of any breach of the Warranties, if, in respect of any matter which would otherwise give rise to a breach of the Warranties, a Group Company is entitled to claim under any policy of insurance (or would have been so entitled had it maintained in force its insurance cover current at Completion) the amount of insurance monies to which that Group Company actually receives shall reduce pro tanto or extinguish the claim for breach of the Warranties.
(9) If the Seller makes any payment by way of damages for breach of the Warranties (the "Damages Payment") and a Group Company or any member of the Purchaser's Group receives any benefit otherwise than from the Seller which would not have been received but for the circumstance giving rise to the claim in respect of which the Damages Payment was made the Purchaser shall, once it or a Group Company or the member of the Purchaser's Group has received such benefit, immediately repay to the Seller an amount equal to the lesser of the amount of such benefit and the Damages Payment less the Purchaser's reasonable costs and expenses (if any) incurred in paying such benefit to the Seller.
(10) The Purchaser shall not intentionally do, and shall procure that each Group Company shall not intentionally do, any act or thing which is reasonably likely to give rise to a Warranty Claim which would not otherwise arise other than pursuant to a legally binding obligation entered into by any Group Company before Completion or in the proper course of the relevant Group Company's business or activities.
(11) Where the Seller has made a payment to the Purchaser in respect of, or relating to, any claim under the Warranties and a Group Company or the Purchaser has a right of reimbursement against any other person in respect of or relating to that claim the Purchaser shall notify the Seller within a reasonable period of that fact and shall (if indemnified to its reasonable satisfaction against the costs and expenses of taking such action) take all reasonable steps or proceedings to enforce such right.
(12) If any amount in respect of any breach of the Warranties is paid by the Seller to the Purchaser and any subsequent event or circumstances happens or arises by virtue of which the loss attributable to such breach is reduced or removed altogether, then the Purchaser shall forthwith repay to the Seller that amount or the appropriate proportion thereof less the Purchaser's reasonable costs and expenses (if any) incurred in recovering any relevant amount.
(13) The Purchaser shall not be liable for entitled to recover more than once in respect of any Claim if claim under the alleged breach which is Warranties, the subject of the Claim is capable of remedy and is remedied Tax Deed or to the reasonable satisfaction extent that any claim has been taken into account in accordance with Schedule 5 arising from the same subject matter or set of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. circumstances.
(14) Nothing in this agreement shall prejudice each Investor’s duty under in any way restrict or limit the common law obligation of the Purchaser to mitigate any loss or liability damage which is it may suffer in relation to the subject of a Claim. [At matters contained in this agreement.
(15) The Purchaser shall not be entitled to rescind this agreement after Completion in any circumstances and the option of each Founder but at all times subject Purchaser shall be entitled to Investor Majority Consent, any liability rescind this agreement before Completion only in respect of any Claims may be settled accordance with clause 9.
(in whole or in part16) in Shares held Any payment made by the relevant Founder, whereby Seller under this agreement or the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Tax Deed shall be deemed to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares a pro tanto reduction in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rightsConsideration.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. (a) The limitations set out in this clause 6 Purchaser shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Warranty Claim if the alleged Purchaser has knowledge prior to the Closing Time of the inaccuracy, non-performance, non-fulfillment or breach which is the basis for such Warranty Claim and the Purchaser competes the transactions hereunder notwithstanding such inaccuracy, non-performance, non-fulfillment or breach.
(b) The amount of any damages which may be claimed by the Purchaser pursuant to a Warranty Claim shall be calculated to be the cost or loss to the Purchaser after giving effect to:
(i) any insurance proceeds available to the Purchaser in relation to the matter which is the subject of the Claim is capable Warranty Claim, and
(ii) the value of remedy and is remedied any related, determinable tax benefit realized, or to be realized within 5 years following the date of incurring such cost or loss, by the Purchaser in relation to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability matter which is the subject of the Warranty Claim.
(c) The Purchaser shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Purchaser as a Claimresult of all misrepresentations and breaches of warranties contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby, after taking into account paragraph (b) of this section is equal to $250,000. [At After the option aggregate amount of each Founder but at all times subject such damages, losses, liabilities and expense incurred by the Purchaser exceeds $250,000 the Purchaser shall only be entitled to Investor Majority Consentmake Warranty Claims to the extent that such aggregate amount, after taking into account the provisions of paragraph (b) of this section, exceeds $250,000.
(d) Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to carry out the transactions contemplated hereby, the maximum aggregate liability of the Vendor together in respect of any all Warranty Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred Purchaser will be limited to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rightsPurchase Price.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
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Limitations on Warranty Claims. 6.1 The limitations set out in under this clause 6 shall not apply to any Claim which is: is the consequence result of the fraud, dishonestywilful misstatement, wilful concealment misconduct or wilful misrepresentation by or concealment on behalf the part of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No .
6.2 The Warrantors shall not be liable for any Claim may be made against unless the Investors have given written notice to the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the thing or matter giving rise to such Claim by (i) no later than before 5.00 pm on the date which is six falling twelve (12) months after from the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. Agreement.
6.3 The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: not exceed:
6.3.1 in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreementAgreement; and and
6.3.2 in the case of each of the Founders, Founders [£[ ] [Note: insert amount] [together with ], and the proper and reasonable Investors shall be precluded from recovering their costs of recovery in respect of any Claim incurred by or on behalf of the Investors, save for Claims made pursuant to clause 6.1.
6.4 The Warrantors shall not be liable for any Claim unless and until the aggregate liability of the Warrantors in respect of all Claims exceeds £[insert financial threshold], in which case the Warrantors shall (subject clauses 6.3 and 6.7) be liable for the initial £[insert financial threshold stated above] and the excess.
6.5 The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter or thing giving rise to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors (acting reasonably) within 30 days of the date on which notice of such Claim is given to the notice in clause 6.2 Warrantors.
6.6 The Warrantors shall be under no liability under the Warranties to the extent that the matter or circumstance giving rise to such liability is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Disclosed.
6.7 Nothing in this agreement Agreement shall prejudice each Investor’s 's duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. The limitations set out in this clause 6 shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the WarrantorsCompany; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule Schedule 5. No Claim may be made against the Warrantors Company unless written notice of such Claim is served on the Warrantors Company, giving reasonable details of the Claim by (i) no later than Claim, within the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years 18] month period after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors Company in respect of all and any Claims shall be limited to: in the case of the Company, (subject to clause 5.6) to an amount equal to the aggregate amount subscribed for the New Shares by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] agreement [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors Without prejudice to the overall cap set out in clause 6.3 above, in respect of any Claim(s) that is or are brought by only some Investors, the aggregate liability of the Company in respect of all such Claims shall not be liable the aggregate amount subscribed for the New Shares pursuant to this agreement by those Investors bringing the Claim(s) [together with the proper and reasonable costs of recovery in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes incurred by or on behalf of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claimsuch Investors.] No liability of the Warrantors Company in respect of any breach of any Warranty shall arise: if such breach occurs [or to the extent that the liability is increased] by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Execution Date or by reason of any change to existing legislation, HMRC’s practice (or that of any other Taxing Authority) or in rates of taxation occurring after the Completion Execution Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors Company before the expiry of the relevant periods specified in clause 6.2. The Warrantors 6.2 and the Company shall not be liable for to make any payment in respect of such Claim if unless and until the alleged breach which is liability becomes an actual liability or (as the subject of the Claim is case may be) becomes capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breachbeing quantified. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Samples: Subscription Agreement
Limitations on Warranty Claims. The limitations set out in this clause 6 7 shall not apply to any Claim which is: the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf of the Warrantors; or which is a result of a breach of warranty statements 1.1 and 1.2 (share capital) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details of the Claim by (i) no later than the date which is six months after the date on which the Company delivers delivery to the Investors of the Board approved audited accounts of the Company for the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors in respect of all and any Claims shall be limited to: in the case of the Company, an amount equal to the aggregate amount subscribed by the Investors pursuant to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of any Claim incurred by or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 7.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims arising out of the same or similar subject matter, facts, events or circumstances shall be aggregated and form a single Claim.] No liability of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs by reason of any matter which would not have arisen but for the coming into force of any legislation not in force at the Completion Date or by reason of any change to HMRC’s HM Revenue & Customs' practice occurring after the Completion Date; to the extent that specific allowance, provision or reserve has been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.27.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors by the Warrantors within 30 days of the date on which the notice in clause 6.2 7.2 above is received by the Warrantors and no Investor suffers any losses in connection with the alleged breachWarrantors. Nothing in this agreement shall prejudice each Investor’s duty under common law to mitigate any loss or liability which is the subject of a Claim. [At the option of each Founder but at all times subject to Investor Majority Consent, any liability in respect of any Claims may be settled (in whole or in part) in Shares held by the relevant Founder, whereby the number of Shares is calculated by dividing the value of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 7.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
Limitations on Warranty Claims. The limitations set out Notwithstanding the foregoing, save in this clause 6 shall not apply to any Claim which is: the consequence case of fraud, dishonesty, dishonesty or wilful concealment by the Seller, its agents or wilful misrepresentation advisors, the Seller's liability for breach of Warranty shall be subject to the following provisions:
(a) The Seller shall not be liable for any breach of Warranty claim pursuant to Section 8.1 in relation to those matters fairly disclosed or referred to in the Disclosure Schedule including without limitation SECTION 8.2(a) of the Disclosure Schedule.
(b) The Seller shall not be liable for any breach of Warranty claim pursuant to Section 8.1 unless the total of all claims for breach of Warranty pursuant to Section 8.1 shall exceed One Hundred Thousand Pounds ((pound)100,000) in the aggregate;
(c) The Seller shall not be liable for any breach of Warranty claim pursuant to Section 8.1 for amounts in excess of the Purchase Price in the aggregate; and
(d) The Seller shall not be liable for any breach of Warranty claim pursuant to Section 8.1 unless the Buyer has notified the Seller of any claim no later than one year from Closing; and
(e) The Seller shall not be liable for any breach of Warranty claim pursuant to Section 8.1:
(i) if it would not have arisen but for some voluntary act, omission, transaction or arrangement of or carried out after Closing (otherwise than pursuant to a legally binding commitment binding on the Buyer in force at Closing) by or on behalf of the Warrantors; Buyer;
(ii) to the extent that the claim arises or which is increased as a result of a breach all or any change to rates of warranty statements 1.1 Tax or any introduction or change in any legislation or governmental regulation or any administrative or judicial decision after the Closing Date;
(iii) if the fact, event or circumstance giving rise to the claim or otherwise relevant thereto is disclosed in this Agreement (including the Disclosure Schedule and 1.2 (share capitalExhibits) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against or in the Warrantors unless written notice of such Claim is served on the Warrantors giving reasonable details Financial Statements or in any other document or communication referred to in any of the Claim by foregoing;
(iiv) no later than the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts of the Company for extent that provision, allowance, reserve or note is made in the Financial Year of the Company ending [insert date]; or (ii) two years after the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure to give reasonable details of any Claims shall not prevent the Investors from proceeding with any Claim otherwise made properly under this agreement. The aggregate liability of the Warrantors Statements in respect of all and any Claims shall be limited to: in the case of matter to which the Company, an amount equal liability relates or that payment or discharge thereof is or has been taken into account therein;
(v) to the aggregate amount subscribed by extent that the Investors pursuant Buyer is entitled to this agreement; and in the case of each of the Founders, £[ ] [Note: insert amount] [together with the proper and reasonable costs of recovery in respect of claim indemnity against any Claim incurred by loss or on behalf of the Investors.] The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for all Claims exceeds £ [Note: insert amount], in which case the Warrantors shall be liable for the entire amount and not merely the excess. [In calculating liability for Claims for the purposes of clause 6.4 above, any Claim which is less than £ (excluding interest, costs and expenses) shall be disregarded. For these purposes, a number of Claims damage arising out of the same breach or similar subject matterclaim under the terms of any insurance policy from time to time in force or would be so entitled if it maintained valid, facts, events or circumstances shall be aggregated and form a single Claim.] No liability adequate insurance of the Warrantors in respect of any breach of any Warranty shall arise: if such breach occurs type maintained by reason of any matter the Seller at Closing;
(vi) which would not have arisen but for the coming into force of any legislation not in force anything expressly provided to be done or omitted to be done pursuant to this Agreement or which is otherwise done or omitted to be done at the Completion Date request or by reason with the consent of the Buyer or any change to HMRC’s practice occurring after the Completion Date; director, officer or employee thereof;
(vii) to the extent that specific allowance, provision or reserve has the claim would have been made in the Accounts or in the Management Accounts in respect of the matter to which such liability relates; to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculate its liabilities or any other change in accounting practice from the treatment or application of the same used in preparing the Accounts (save to the extent that such changes are required to correct errors or because relevant generally accepted accounting principles have not been complied with). The Investors shall be entitled to make a Claim in respect of liability which is contingent or unascertained provided that written notice of the Claim (giving as far as practical the amount and details of the Claim) is given to the Warrantors before the expiry of the relevant periods specified in clause 6.2. The Warrantors shall not be liable for any Claim if the alleged breach which is the subject of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the Investors reduced by the Warrantors within 30 days of the date on which the notice in clause 6.2 is received by the Warrantors and no Investor suffers any losses in connection with the alleged breach. Nothing in this agreement shall prejudice each Investor’s duty under Buyer properly performing its common law duty to mitigate any loss or liability which damage incurred by it;
(viii) to the extent that the Buyer is the subject entitled (whether by right of a Claim. [At the option of each Founder but at all times subject indemnity, reimbursement or any other means) to Investor Majority Consent, recover from some other person any liability sum or benefit in respect of any Claims may be settled (matter the subject of such a claim and in whole or in part) in Shares held the event that payment is made by the relevant FounderSeller in respect of a claim and the Buyer or any agent on its behalf subsequently recovers from the third party a sum or benefit which is referable to the subject matter of such claim, whereby the number Buyer shall forthwith after the receipt of Shares is calculated by dividing such sum or benefit pay it to the value Seller (after deducting any costs and expenses reasonably incurred in recovering such sum or benefit from the third party) but not in any event exceeding the amount originally paid in respect of the Claim by the [lower of (i) the Fair Value [Note: add definition] of such Shares at the time of the settlement of the Claimclaim; and (ii) the] Subscription Price [Note: add definition]. [Any Shares so transferred to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each of the parties (other than the Company) hereby irrevocably agrees to approve such re-designation and waives any pre-emption rights on transfer he or his nominees may have pursuant to the Company's articles of association or otherwise so as to enable the transfer of any Shares in the capital of the Company contemplated by this clause 6.10 to proceed free of any such pre-emption rights.] The transfer of the adequate number of Shares (or, where Shares are transferred in partial settlement, the adequate number of Shares together with the adequate cash payment) to the Investors by a relevant Founder shall fully and finally discharge such Founder from any liability for a Claim.] [Note: Authority for re-designation and transfer to be added to New Articles if not all shareholders party to the agreement.]
Appears in 1 contract
