A disclosure letter is a document provided during a transaction, typically accompanying a sale agreement, where the seller discloses specific information and any exceptions to the warranties stated in the contract. It serves to clarify details and protect the seller against potential future claims by informing the buyer of actual circumstances that might differ from contractual assumptions.
“Disclosure Letter” means that certain disclosure letter dated as of the Closing Date, as amended on or prior to the Fourth Amendment Effective Date, containing certain schedules delivered by the Credit Parties to the Administrative Agent and the Purchasers (with respect to Schedules 1.01 and 6.17 to the Disclosure Letter, as such schedules are supplemented from time to time in accordance with the terms of this Agreement).
Except as set forth in the disclosure letter delivered by Seller to Purchaser (the “Seller Disclosure Letter”) concurrently with the execution of this Agreement (it being agreed that any matter disclosed pursuant to any Section of the Seller Disclosure Letter shall be deemed disclosed for purposes of any other Section of the Seller Disclosure Letter to the extent the applicability of the disclosure to such other Section is reasonably apparent on the face of such disclosure), Seller represents and warrants to Purchaser as of the date hereto and as of the Closing as follows:
The Company Disclosure Letter sets out a complete list of all employees of Company and its subsidiaries who are on disability leave, maternity leave, parental leave or other authorized or unauthorized leave of absence from Company or its subsidiaries, as the case may be, which list indicates each employee's reason for leave, expected date of return from leave (if known) and entitlement to or eligibility for benefits while on leave.
The Company Disclosure Letter sets forth all Company Employee Costs, and except for such Company Employee Costs disclosed in the Company Disclosure Letter, neither Company nor its subsidiaries has paid and will not be required to pay any bonus, fee, distribution, remuneration or other compensation to any employee or contractor as a result of the transactions contemplated by this Agreement (other than salaries, wages or fees paid or payable to employees and contractors in the ordinary course of business).
Company Material Contracts. The Company Disclosure Letter lists all of the Contracts, correct, current and complete copies of which have been made available to Purchaser, which: (i) are outside of the ordinary course of the business, (ii) are non-industry standard, (iii) relate to indebtedness for borrowed money, (iv) involve aggregate payments to or by Company in any fiscal year in excess of $2,000,000, (v) restrict the business or activities of Company; (vi) are for any material liability or obligation of Company, or (vii) are otherwise material to Company and its subsidiaries (the "Company Material Contracts"). Except as would not reasonably be expected to have a Material Adverse Effect on Company's business, each of the Company Material Contracts constitutes a legally valid and binding agreement of Company, enforceable in accordance with its respective terms and, to the knowledge of Company, no party thereto is in default in the observance or performance of any term or obligation to be performed by it under any such Company Material Contract, and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default. Except as would not reasonably be expected to have a Material Adverse Effect on Company's business, neither Company nor its subsidiaries has received any written notice or verbal communications that any party to a Company Material Contract intends to modify, cancel, terminate or not renew its relationship with Company or its subsidiaries, as the case may be, and, to the knowledge of Company, no such action is pending or threatened.
First Nations, Métis and Native Matters. The Company Disclosure Letter discloses all of the contracts, agreements, arrangements or understandings to which Company is a party with First Nations, Métis, tribal or native authorities or communities in relation to the environment or development of communities in the vicinity of any of the assets or properties of Company or its subsidiaries which are material. Except as set out in the Company Disclosure Letter, neither Company nor its subsidiaries has received notice of any claim with respect to any of the assets or properties of Company or its subsidiaries for which Company or its subsidiaries, as the case may be, has been served, either from First Nations, Métis, tribal or native authorities or any Governmental Authority, indicating that any of such assets or properties infringe upon or has an adverse effect on any aboriginal rights or interests of such First Nations, Métis, tribal or native authorities.
Outstanding AFE's. Except as set out in the Company Disclosure Letter, to the knowledge of Company, there are no outstanding cash calls, equalization payments or authorizations for expenditure which exceed $250,000 pursuant to which expenditures will or may be made in respect of the assets of Company.
The Company Disclosure Letter sets forth a complete list of the Owned Real Property in each case by reference to the owner, municipal address and legal description.
ComSovereign hereby represents and warrants to DA, subject to such exceptions as are specifically disclosed in the disclosure letter supplied by ComSovereign to DA, dated as of the Closing Date (the “ComSovereign Disclosure Letter”), as set forth in this Article III. As used in this Article III, unless the context indicates otherwise, the term “ComSovereign Group” (as defined in Section 2.1(a) below) means each entity comprising the ComSovereign Group.
Except (i) as disclosed in the Level One Disclosure Letter or (ii) as disclosed in any registration statement, prospectus, report, schedule or definitive proxy statement filed with or furnished to the Securities and Exchange Commission (the “SEC”) by Level One between January 1, 2020 and the date hereof (but disregarding disclosures of risks under the heading “Risk Factors” or in any “forward-looking statements” disclaimer or any other statements that are similarly nonspecific or cautionary, predictive or forward-looking in nature), Level One hereby makes the representations and warranties set forth below to First Merchants with respect to itself and the Subsidiaries. For the purposes of this Agreement, “Level One Disclosure Letter” is defined as the disclosure letter prepared by Level One and delivered to First Merchants contemporaneously with the execution of this Agreement.
6.08 Disclosure Letter. Any fact or item that is disclosed in any specific section of the Disclosure Letter in a way as to make its relevance or applicability to information called for by any other section of the Disclosure Letter reasonably apparent shall be deemed to be disclosed in such other specific section of the Disclosure Letter, notwithstanding the omission of a reference or cross-reference thereto.
A Disclosure Letter is a document often used in transactions, such as mergers and acquisitions, to clarify and disclose specific information between parties involved. It outlines exceptions, conditions, or details relating to the representations and warranties made within the main contractual agreement. This letter helps to ensure that all parties have a clear and transparent understanding of any issues or omissions prior to finalizing a deal.
A Disclosure Letter should be used in scenarios where detailed disclosures are necessary for the transparency and protection of parties involved. Common situations include:
When writing a Disclosure Letter, follow these guidelines:
Example:
“This Disclosure Letter is made and delivered in connection with that certain Purchase Agreement dated September 1st, 2023, by and between XYZ Corp (“Purchaser”) and ABC Inc. (“Seller”).”
Disclosure Letters are typically found alongside contracts that involve:
These contracts often require a comprehensive understanding of the factual and legal circumstances surrounding the agreement, making disclosure letters a critical component for full transparency and risk management.
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