PRVT » Topics » 9.9 Indemnification of Directors and Officers .

This excerpt taken from the PRVT 8-K filed Oct 16, 2009.

9.9 Indemnification of Directors and Officers.

(a) From and after the Closing, Buyer will cause Amalco to fulfill and honor in all respects the obligations of the Company pursuant to any indemnification provision under the Organizational Documents of the Company on the date of this Agreement (the Persons to be indemnified pursuant to the provisions referred to in this Section 9.9 shall be referred to as, collectively, the “Company Indemnified Parties”), and if any statute is amended to provide for benefits that are more favorable to the Company Indemnified Parties, then each Company Indemnified Party shall be entitled to the benefits of such amendment. The Organizational Documents of Amalco shall contain the provisions with respect to indemnification, reimbursement, contribution, hold harmless and exculpation from liability set forth in the Organizational Documents of the Company on the date of this Agreement, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years after the Closing in any manner that would adversely affect the rights thereunder of any Company Indemnified Party (and if any statute is amended to provide for benefits that are more favorable to

 

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the Company Indemnified Parties, then each Company Indemnified Party shall be entitled to the benefits of such amendment). From and after the Closing, Amalco shall be jointly and severally obligated to pay the reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Company Indemnified Parties in enforcing the rights provided in this Section 9.9 and shall make any advances of such expenses to the Company Indemnified Parties that would be available under the Organizational Documents or other agreements of the Company (in each case as in effect as of the date of this Agreement) with regard to the advancement of expenses.

(b) Each of Buyer and the Company Indemnified Parties shall cooperate, and cause their respective affiliates to cooperate, in the defense of any action and shall provide access to properties and individuals as reasonably requested and furnish or cause to be furnished records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith. If Buyer and/or Amalco merges into, consolidates with or transfers all or substantially all of its assets to another Person or liquidates, dissolves or winds up its operations, then and in each such case, Buyer and/or Amalco, as the case may be, shall make proper provision so that the surviving or resulting entity or the transferee in such transaction assumes the obligations of the Buyer and/or Amalco under this Section 9.9. The obligations of Buyer and Amalco under this Section 9.9 shall not be terminated or modified in such a manner as to adversely affect any Company Indemnified Party to whom this Section 9.9 applies without the written consent of each affected Company Indemnified Party. The provisions of this Section 9.9 shall be in addition to any other rights available to the Company Indemnified Parties, shall survive the Closing, and are expressly intended for the benefit of the Company Indemnified Parties.

(c) Notwithstanding the other provisions of this Section 9.9, the provisions of this Section 9.9 shall not apply in respect of a claim involving a breach by any Seller or the Company of any representation, warranty or covenant contained in this Agreement.

9.10 Nomination to Buyer Board of Directors. Buyer agrees to appoint Eric Johnson to Private’s Board of Directors on or before December 31, 2009 and to nominate Eric Johnson to continue to serve as a director at each annual meeting of shareholders of Private until not earlier than the end of the Earnout Periods; provided that Eric Johnson remains employed with Private or its Affiliates at the time of appointment and each such annual meeting of shareholders.

9.11 Conduct of Business Prior to Closing. Without in any way limiting any other obligation of the Company or any Company Subsidiary hereunder, during the period from the date hereof to the time of Closing, each of Sellers, the Company and the Company Subsidiaries covenant and agree as follows:

(a) Prior to Closing, each of Sellers, the Company and the Company Subsidiaries shall conduct the Company’s Business only in the Ordinary Course of Business and shall not, without Buyer’s prior written consent, enter into any transaction or refrain from doing any action which, if effected before the date of this Agreement, would constitute a breach of any representation, warranty, covenant or other obligation of the Company, the Company Subsidiaries or Sellers contained herein or have a Material Adverse Effect on the Company. If the Company, the Company Subsidiaries or Sellers consider any material change, alteration or modification to the

 

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Company’s Business that is out of the Ordinary Course of Business, the Company and Sellers shall notify Buyer, and such change, alteration or modification shall not be made without consultation with Buyer. If Buyer disagrees with the proposed material change, alteration or modification and the Company implements such proposal notwithstanding Buyer’s disagreement, this Agreement shall be voidable, at Buyer’s option, by written notice to Sellers given not more than ten (10) days following the date Buyer had actual notice of the implementation of such proposal, such right to be without prejudice to any other rights or remedies available to Buyer. The Sellers shall notify Buyer forthwith of the implementation of any such proposal with which Buyer had disagreed.

(b) The Company and the Company Subsidiaries shall continue to maintain in full force and effect all policies of insurance or renewals thereof now in effect and shall give all notices and present all claims under all policies of insurance in a due and timely fashion.

(c) Sellers shall cause the Company and the Company Subsidiaries to maintain and the Company and the Company Subsidiaries shall maintain the books and records and all other documents, files, and other data, financial or otherwise relating to the Company and the Company Subsidiaries or their business.

(d) The Company and the Company Subsidiaries shall not sell, lease, license, transfer or otherwise dispose of any of the assets of the business, except in the Ordinary Course of Business.

(e) The Company and the Company Subsidiaries shall not increase the compensation of Sellers or any employee and shall not grant any increased bonuses, benefits or other forms of direct or indirect compensation to any Seller or employee, nor shall the Company nor any Company Subsidiary enter into or amend any severance, termination, notice or change-of-control agreement with any Seller or employee.

(f) The Company and the Company Subsidiaries shall not incur any indebtedness for borrowed money, whether under existing credit lines or otherwise, or guarantee any such indebtedness of another Person or issue or sell any debt securities or guarantee any debt securities of another Person.

(g) The Company and the Company Subsidiaries shall not, other than in the Ordinary Course of Business, (i) lend any money, other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business consistent with its past practices (provided that no proceeds of any such advances are used directly or indirectly to purchase shares of Company Shares), (ii) make any investments in or capital contributions to, any Person, (iii) forgive or discharge in whole or in part any outstanding loans or advances, or (iv) prepay any indebtedness for borrowed money.

(h) The Company and the Company Subsidiaries shall not enter into any contractual arrangements for the business which would be Material Agreements or Contracts, other than in the Ordinary Course of Business, or violate, terminate, amend or otherwise modify or waive any of the material terms of any Material Agreement or Contract, or enter into any material transaction or take any other action, in either case not in the Ordinary Course of Business.

 

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(i) The Company and the Company Subsidiaries shall use their best efforts to carry on the business as currently conducted, and Sellers shall each use their respective best efforts to promote and preserve for Buyer the goodwill of suppliers, clients and others having business relations with the Company and the Company Subsidiaries.

(j) Except as otherwise provided in this Agreement, the Company and the Company Subsidiaries shall pay and discharge their respective liabilities in the Ordinary Course of Business, except those contested in good faith.

(k) Neither the Company nor any Company Subsidiary shall adopt any amendment to its Organizational Documents (other than those expressly contemplated by this Agreement and the termination of that certain Shareholder’s Agreement, dated as of June 7, 2000, among the Company and each of the Sellers).

(l) The Company and the Company Subsidiaries shall not issue, reissue, sell, deliver, transfer, repurchase, redeem, acquire or pledge or authorize or propose the issuance, reissuance, sale, delivery, Transfer, repurchase, redemption, acquisition or pledge of shares or other voting or equity interest or any securities convertible into stock or other equity or voting interests, or any rights, warrants or options to acquire any voting or equity interest.

(m) The Company and the Company Subsidiaries will not materially change any of the accounting or Tax principles, practices or methods used by any of them, except as required by changes in applicable Tax laws, nor will the Company or any Company Subsidiary settle or compromise any material Tax liability or agree to any material adjustment of any Tax, or make or change any material election with respect to Taxes.

(n) Except as otherwise provided in this Agreement, neither the Company nor any Company Subsidiary will change past practice with respect to the payment of accounts payable or the collection of accounts receivable or change any of its accounting methods, unless required by GAAP.

(o) Neither the Company nor any Company Subsidiary will dispose of, permit to lapse, waive, release, or assign any rights or settle any claims with respect to, any material Intellectual Property rights or any material claim of the Company or the Company Subsidiaries.

(p) Neither the Company nor any Company Subsidiary will declare, set aside or pay any cash or stock dividend or other distribution (whether in cash, stock or property) in respect of its capital stock, or redeem, repurchase or otherwise acquire any of its capital stock or other securities or pay or distribute any cash or property to any of its securityholders in respect of their securities or make any other cash payment to any of its securityholders in respect of their securities.

(q) Neither the Company nor any Company Subsidiary will subdivide, split, combine or reverse split the outstanding shares of its capital stock of any class or series or enter into any recapitalization affecting the number of outstanding shares of its capital stock of any class or series or affecting any other of its securities.

 

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(r) Except as otherwise provided in this Agreement, neither the Company nor any Company Subsidiary will merge, consolidate or reorganize with, acquire, or enter into any other business combination with any corporation, partnership, limited liability company or any other entity, acquire a substantial portion of the assets of any such entity, or enter into any negotiations, discussions or agreement for such purpose.

(s) Neither the Company nor any Company Subsidiary will (i) initiate any litigation, action, suit, proceeding, claim or arbitration or (ii) settle or agree to settle any litigation, action, suit, proceeding, claim or arbitration.

9.12 Investment Canada Act Matters. Promptly following receipt of favorable written advice from the Department of Canadian Heritage that the transactions contemplated by this Agreement would not be reviewable under the Investment Canada Act satisfactory to Buyer, in its sole discretion, Buyer shall file the notification required under the Investment Canada Act.

"9.9 Indemnification of Directors and Officers ." elsewhere:

Gaming Partners International (GPIC)
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