Common use of Warranty Claims Against Seller Clause in Contracts

Warranty Claims Against Seller. 5.1. Subject to the provisions of this AGREEMENT, the SELLER shall be liable to ENTRUST for any breach of the representations made in Sec. 4 above (a "DEFECT"), and shall indemnify and hold ENTRUST (or at the option of ENTRUST, the COMPANY) harmless against any damage incurred by ENTRUST or by the COMPANY, unless ENTRUST was aware of the DEFECT at SIGNING. 5.2. In order to account for the effective participation of the SELLER in the COMPANY's capital, the liability of the SELLER for the damage caused by the DEFECT shall be reduced to 59.274 % of the damage, unless such damage affects directly the SHARES. 5.3. For the purpose of any claim for the reduction of the PURCHASE PRICE in connection with any DEFECT, such DEFECT shall be deemed to affect pro rata the value of the SHARES in the same manner as it affects the value of the COMPANY. The hypothetical value of the SHARES without the DEFECT shall be deemed to be equal to -28- Share Purchase Agreement -------------------------------------------------------------------------------- the PURCHASE PRICE, or, if no PRICE ADJUSTMENT was payable, to the BASIS PRICE. 5.4. ENTRUST shall notify the SELLER in writing of any DEFECT no later than 45 days after ENTRUST has become aware of such DEFECT. ENTRUST shall not be deemed to have been aware of, or to have accepted any DEFECT, unless such DEFECT has been clearly disclosed by the COMPANY (i) in the course of the due diligence or (ii) in the documents and information provided to ENTRUST and listed in the answers to the due diligence questionnaire dated 10 May 1998, as attached in Exhibit DIL. The requirement that ENTRUST examine the object of the sale after CLOSING pursuant to Art. 201 CO is waived. 5.5. The claims of ENTRUST in connection with any DEFECT shall be subject to a statute of limitation of 24 months after CLOSING and of one year after the notification of the DEFECT by ENTRUST pursuant to Sec. 5.2., provided, however, that claims raised in connection with taxes for any given tax period shall expire one year after the final assessment for such tax period. 5.6. No claim may be raised against the SELLER in connection with any DEFECT, unless the aggregate amount of the damage claimed by ENTRUST against the SELLER and/or any other person in connection with DEFECTS exceeds CHF 100,000.--. The maximum aggregate amount of warranty claims against the SELLER shall be limited to 59.274% of CHF 15,000,000. If a DEFECT affects only the value of the SHARES, without any damage for the COMPANY, the claim of ENTRUST shall be limited to the PURCHASE PRICE paid. 5.7. A rescission of the sale of the SHARES is excluded.

Warranty Claims Against Seller. 5.1. Subject to the provisions of this AGREEMENT, the SELLER shall be liable to ENTRUST for any breach of the representations made in Sec. 4 above (a "DEFECT"), and shall indemnify and hold ENTRUST (or at the option of ENTRUST, the COMPANY) harmless against any damage incurred by ENTRUST or by the COMPANY, unless ENTRUST was aware of the DEFECT at SIGNING. 5.2. In order to account for the effective participation of the SELLER in the COMPANY's capital, the liability of the SELLER for the damage caused by the DEFECT shall be reduced to 59.274 0.986 % of the damage, unless such damage affects directly the SHARES. 5.3. For the purpose of any claim for the reduction of the PURCHASE PRICE in connection with any DEFECT, such DEFECT shall be deemed to affect pro rata the value of the SHARES in the same manner as it affects the value of the COMPANY. The hypothetical value of the SHARES without the DEFECT shall be deemed to be equal to -28- Share Purchase Agreement -------------------------------------------------------------------------------- the PURCHASE PRICE, or, if no PRICE ADJUSTMENT was payable, to the BASIS PRICE. 5.4. ENTRUST shall notify the SELLER in writing of any DEFECT no later than 45 days after ENTRUST has become aware of such DEFECT. ENTRUST shall not be deemed to have been aware of, or to have accepted any DEFECT, unless such DEFECT has been clearly disclosed by the COMPANY (i) in the course of the due diligence or (ii) in the documents and information provided to ENTRUST and listed in the answers to the due diligence questionnaire dated 10 May 1998, as attached in Exhibit DIL. The requirement that ENTRUST examine the object of the sale after CLOSING pursuant to Art. 201 CO is waived. 5.5. The claims of ENTRUST in connection with any DEFECT shall be subject to a statute of limitation of 24 months after CLOSING and of one year after the notification of the DEFECT by ENTRUST pursuant to Sec. 5.2., provided, however, that claims raised in connection with taxes for any given tax period shall expire one year after the final assessment for such tax period. 5.6. No claim may be raised against the SELLER in connection with any DEFECT, unless the aggregate amount of the damage claimed by ENTRUST against the SELLER and/or any other person in connection with DEFECTS exceeds CHF 100,000.--100'000.--. The maximum aggregate amount of warranty claims against the SELLER shall be limited to 59.2740.986 % of CHF 15,000,00015'000'000. If a DEFECT affects only the value of the SHARES, without any damage for the COMPANY, the claim of ENTRUST shall be limited to the PURCHASE PRICE paid. 5.7. A rescission of the sale of the SHARES is excluded.

Warranty Claims Against Seller. 5.1. 5.1 Subject to the provisions of this AGREEMENT, the SELLER shall be liable to ENTRUST for any breach of the representations made in Sec. 4 above (a "DEFECT"), and shall indemnify and hold ENTRUST (or at the option of ENTRUST, the COMPANY) harmless against any damage incurred by ENTRUST or by the COMPANY, unless ENTRUST was aware of the DEFECT at SIGNING. 5.2. 5.2 In order to account for the effective participation of the SELLER in the COMPANY's capital, the liability of the SELLER for the damage caused by the DEFECT shall be reduced to 59.274 19.757 % of the damage, unless such damage affects directly the SHARES. 5.3. 5.3 For the purpose of any claim for the reduction of the PURCHASE PRICE in connection with any DEFECT, such DEFECT shall be deemed to affect pro rata the value of the SHARES in the same manner as it affects the value of the COMPANY. The hypothetical value of the SHARES without the DEFECT shall be deemed to be equal to -28- Share Purchase Agreement -------------------------------------------------------------------------------- the PURCHASE PRICE, or, if no PRICE ADJUSTMENT was payable, to the BASIS PRICE. 5.4. 5.4 ENTRUST shall notify the SELLER in writing of any DEFECT no later than 45 days after ENTRUST has become aware of such DEFECT. ENTRUST shall not be deemed to have been aware of, or to have accepted any DEFECT, unless such DEFECT has been clearly disclosed by the COMPANY (i) in the course of the due diligence or (ii) in the documents and information provided to ENTRUST and listed in the answers to the due diligence questionnaire dated 10 May 1998, as attached in Exhibit DIL. The requirement that ENTRUST examine the object of the sale after CLOSING pursuant to Art. 201 CO is waived. 5.5. 5.5 The claims of ENTRUST in connection with any DEFECT shall be subject to a statute of limitation of 24 months after CLOSING and of one year after the notification of the DEFECT by ENTRUST pursuant to Sec. 5.2., provided, however, that claims raised in connection with taxes for any given tax period shall expire one year after the final assessment for such tax period. 5.6. 5.6 No claim may be raised against the SELLER in connection with any DEFECT, unless the aggregate amount of the damage claimed by ENTRUST against the SELLER and/or any other person in connection with DEFECTS exceeds CHF 100,000.--100'000.--. The maximum aggregate amount of warranty claims against the SELLER shall be limited to 59.27419.757 % of CHF 15,000,00015'000'000. If a DEFECT affects only the value of the SHARES, without any damage for the COMPANY, the claim of ENTRUST shall be limited to the PURCHASE PRICE paid. 5.7. A rescission of the sale of the SHARES is excluded.