Common use of Limitations on Warranty Claims Clause in Contracts

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 1 contract

Samples: Subscription and Shareholders' Agreement

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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 realized, or which will (with reasonable certainty) be realized within a [number] 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 $-. After the aggregate amount of such damages, losses, liabilities and expenses incurred by the Purchaser exceeds $ [At amount], the option Purchaser shall only be entitled to make Warranty Claims to the extent that such aggregate amount, after taking into account the provisions of each Founder but at all times subject paragraph (b) of this section, exceeds $-. (d) Notwithstanding any other provisions of this Agreement or of any agreement, certificate or other document made in order to Investor Majority Consentcarry out the transactions contemplated hereby, any the maximum aggregate liability of the Vendor 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 (iPurchaser will be limited to $-. ) 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.]39

Appears in 1 contract

Samples: Share Purchase Agreement

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 Buyer shall not be entitled to make a claim for indemnification on account of the date inaccuracy, non-performance, non- fulfilment or breach of any of the representations and warranties of the Sellers contained in (S)3 or (S)4 (a "Warranty Claim") if the Buyer had actual knowledge prior to the Closing of the inaccuracy, non-performance, non-fulfilment or breach which is six months after the date on which basis for such Warranty Claim and completed the Company delivers purchase and sale transaction notwithstanding such inaccuracy, non-performance, non-fulfilment or breach. For purposes of this provision, the Buyer shall be deemed to the Investors the Board approved audited accounts have actual knowledge of the Company for inaccuracy, non-performance, non-fulfilment or breach of any such representations and warranties, if: (i) such inaccuracy, non-performance, non-fulfilment or breach is disclosed in this Agreement or in any document listed in the Financial Year of the Company ending [insert date]Disclosure Schedule; or (ii) two years after there is clear independent evidence that the Warranties were last given, whichever is the later. [Note: consider extending term for second tranche warranties] Failure Buyer had such actual knowledge prior to give reasonable details Closing. (ii) The amount of any Claims shall not prevent damages which may be claimed by the Investors from proceeding with any Buyer pursuant to a Warranty 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 calculated to be the case of the Company, an amount equal cost or loss 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 Buyer after giving effect to: (A) 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; insurance proceeds available to the extent that specific allowance, provision Target or reserve has been made IISC in the Accounts or in the Management Accounts in respect of relation to 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 Warranty Claim; and (B) the value of remedy and is remedied any related, determinable tax benefits realized within a two year period following the date of incurring such cost or loss, by the Target, IISC or the Buyer 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. (iii) The Buyer shall not be entitled to make any Warranty Claim until the aggregate amount of all damages, losses, liabilities and expenses incurred by the Buyer 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 (ii) of this section, is equal to $200,000. [At After the option aggregate amount of each Founder but at all times subject such damages, losses, liabilities and expenses incurred by the Buyer exceeds $200,000, the Buyer shall be entitled to Investor Majority Consentmake Warranty Claims, after taking into account the provisions of paragraph (ii) of this section, for the full aggregate amount of such damages, losses, liabilities and expenses. (iv) 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 liability of the Sellers in respect of any 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 Buyer will be limited to the Investors shall, if they are Ordinary Shares, be re-designated as Series A Shares and each sum 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$18,000,000.] 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

Samples: Share Purchase Agreement (Sonic Foundry Inc)

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Limitations on Warranty Claims. 12.1 The limitations set out in this clause 6 Vendor shall not apply to be liable for any Warranty Claim which is: unless it receives from the consequence of fraud, dishonesty, wilful concealment or wilful misrepresentation by or on behalf Purchaser written notice containing specific details of the Warrantors; Warranty Claim including the Purchaser's estimate (on a without prejudice basis) of the amount of such Warranty Claim on or before the Final Payment Date. 12.2 If the Purchaser becomes aware of any third party claim, potential claim, matter or event (a third party claim) which is reasonably likely to lead to a result of a breach of warranty statements 1.1 Part B Warranty Claim being made, (subject to being fully indemnified to its reasonable satisfaction by the Vendor against all reasonable out-of-pocket costs and 1.2 expenses incurred by the Purchaser or each Group Company) the Purchaser: (share capitala) and 2.4 (questionnaires) of [part 1 of] schedule 5. No Claim may be made against the Warrantors unless written shall procure that notice of such Claim third party claim is served on promptly given to the Warrantors giving reasonable details Vendor; (b) shall not make (or, as appropriate, shall co-operate to procure that each Group Company shall not make) any admission of liability, agreement or compromise with any person, body or authority in relation to any such third party claim without prior consultation and with the prior agreement of the Claim Vendor which shall not be unreasonably withheld or delayed; (c) shall take (or, as appropriate, shall co-operate to procure that each Group Company shall take) such action as the Vendor may reasonably request to avoid, dispute, resist, appeal, compromise or defend such third party claim or any adjudication in respect of that third party claim; and (d) if so required by the Vendor in writing, shall ensure (i) no later than or, as appropriate, shall co-operate to procure that each Group Company shall ensure), at the date which is six months after the date on which the Company delivers to the Investors the Board approved audited accounts request in writing of the Vendor, that the Vendor is placed in a position to take on or take over the conduct of all proceedings and/or negotiations of whatsoever nature arising in connection with the third party claim in question and provide (or, as appropriate, co-operate to procure that each Group Company provides) such information and assistance as the Vendor may reasonably require in connection with the preparation for the Financial Year and conduct of such proceedings and/or negotiations. 12.3 The aggregate amount of the Company ending [insert date]; or (ii) two years after liability of the Warranties were last given, whichever is the later. [Note: consider extending term Vendor for second tranche warranties] Failure to give reasonable details of any all Part A Warranty Claims shall not prevent exceed the Investors from proceeding with any Claim otherwise made properly under this agreementamount of the Initial Cash Consideration. The Purchaser is entitled to treat any Part A Warranty Claim as an Event of Default under clause 8. 12.4 The Vendor shall not be liable for any Part B Warranty Claim unless the aggregate amount of the liability of the Warrantors in respect Vendor for all Part B Warranty Claims exceeds US$100,000. 12.5 The aggregate amount of the liability of the Vendor for all and any Part B Warranty Claims shall be limited to: in not exceed the case lesser of US$150,000,000 and the actual amount of the Company, an amount equal consideration payable to the aggregate amount subscribed by the Investors Vendor 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 clause 4.3 (before any deductions pursuant to clause 4. 12.6 The Vendor shall not be liable for any Warranty Claim 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]fact, 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 event 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; circumstance to the extent that specific that: (a) such fact, matter, event or circumstance has been fairly and reasonably disclosed in this Agreement, the Disclosure Letter or in any document which has been disclosed to the Purchaser and is listed in Schedule 4; or (b) allowance, provision or reserve has been made for such fact, matter, event or circumstance in the Last Accounts or in to the Management Accounts in respect extent that payment or discharge of the relevant matter to which such liability relates; has been taken into account therein or to the extent that such breach or claim arises as a result matter was specifically referred to in the notes to such Last Accounts. 12.7 The Parties hereby agree and acknowledge that there shall only be fair and reasonable disclosure of any change matter in any Disclosure Letter Supplement which is delivered to the accounting bases or policies in accordance with which Purchaser within 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 two week period after this Agreement to the extent that the Purchaser expressly acknowledges acceptance of such changes are required to correct errors or because relevant generally accepted accounting principles have matters in writing (and mere acknowledgment of receipt shall not been complied withbe sufficient). The Investors No Disclosure Letter Supplement shall be entitled to make a Claim in respect capable 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 delivery after 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 two week period after 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 of 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 rightsAgreement.] 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: Agreement for the Sale and Purchase of Shares (Tom Online Inc)

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