Shortfall Liability Clause Samples
The Shortfall Liability clause defines the responsibility of a party to cover any deficit that arises when expected payments or obligations are not fully met. In practice, this means that if there is a gap between what is owed and what has been paid—such as in financial settlements, loan repayments, or delivery of goods—the liable party must make up the difference. This clause ensures that the non-defaulting party is protected from losses due to underpayment or incomplete performance, thereby allocating risk and promoting financial certainty in contractual relationships.
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Shortfall Liability. Shortfall liability applies to any SN-TVDP Customer that fails to meet the minimum arrangement volumes for its designated commitment level. Shortfall liability is based on the difference between the monthly rate for the designated commitment level and the monthly rate for the commitment level that should have been charged based upon the actual quantity of billed Frontier lnfospeed DSL Solutions arrangements at the end of the Subscription Year. The shortfall liability is equal to the difference in the monthly rate multiplied by the sum of all arrangements billed at the end of each month during such Subscription Year. For example, at the end of Subscription Year Two, a SN-TVDP Customer with Commitment Level C and only 10,000 arrangements in-service will be assessed the difference in the monthly rate between Commitment Level B and Commitment Level C for each arrangement billed at the end of each month during the Subscription Year. Customer may stay in its commitment level by paying an alternative shortfall liability equal to the minimum arrangement volume applicable to its Commitment Level less the actual number of Frontier lnfospeed DSL arrangements billed at the end of the Subscription Year multiplied by the current monthly rate for the selected commitment level, multiplied by six. An additional payment of 10% of the shortfall liability is assessed those Customers who fail to meet the minimum arrangement volume after moving to a higher commitment level the previous year. Customers who fall below the minimum arrangement volume for Commitment Level A in any Subscription Year will be terminated from the SN-TVDP and will be subject to termination liability. All of Customer's Frontier lnfospeed DSL Solutions arrangements will revert to the basic month• to-month rates. If a Customer falls below the minimum volume for Commitment Level A and is terminated from the SN- TVDP twice, in consecutive Subscription Years, the Customer may not subscribe to any term plan for 12 months after being moved to month-to-month rates.
Shortfall Liability. (a) Without limiting the generality of the provisions of Section 6.2, the Parties shall cooperate with each other to obtain the Consent of AT&T to the transfer of the AT&T Contract to Buyer (if such Contract will not by its terms expire prior to the Closing Date) and/or to obtain an extension, modification, or replacement of the AT&T Contract effective following the Closing Date on terms reasonably satisfactory to Buyer. The Parties also agree to cooperate with each other in all discussions and negotiations with AT&T concerning the Shortfall Liability. Both before and after the Closing, each Party shall receive reasonable notice of and have the right to participate in all such discussions and negotiations and shall provide the other with all correspondence given to or received from AT&T in connection with the foregoing, provided that Seller shall not have access to pricing or other terms of any extension, modification, or replacement of the AT&T Contract except to the extent that such pricing or other terms bears on the outcome of the Shortfall Liability negotiations. The Shortfall Liability shall be treated as provided in Schedule 1.7 hereto. Neither Buyer nor Seller may agree with AT&T to any settlement of the Shortfall Liability other than in accordance with this Section 1.7 and Schedule 1.7.
(b) The Parties agree that the provisions of this Section 1.7 and Schedule 1.7, as well as all actions taken by the Parties in the performance hereof, shall be strictly confidential and shall not be disclosed to any Person. In the event either Party becomes legally compelled (by disposition, interrogatory, request of documents, subpoena, civil investigative demand or similar process) to disclose any information required to be kept confidential pursuant to this Section 1.7, such Party shall provide the other Party with prompt prior written notice of such requirement and the Parties, at their joint expense, shall seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Section 1.7. In the event that such protective order or other remedy is not obtained, or the Parties waive compliance with the provisions hereof, the disclosing Party agrees to use its reasonable efforts to furnish only such portion of the confidential information which is legally required to be furnished.
Shortfall Liability. 8 1.8. Certain Pending Litigation.........................................9 1.8.1 Administration.............................................9 1.8.2. Liabilities..............................................10 1.8.3. No Right to Indemnification..............................10