QSFT » Topics » 10.2 Indemnification.

This excerpt taken from the QSFT DEF 14A filed Jan 15, 2009.

Indemnification

 

California law requires indemnification when the individual has defended the action successfully on the merits. Delaware law requires indemnification of expenses when the individual being indemnified has successfully defended any action, claim, issue or matter therein, on the merits or otherwise. Delaware law generally permits indemnification of expenses, including attorneys’ fees, actually and reasonably incurred in the defense or settlement of a derivative or third-party action, provided there is a determination by a majority vote of a disinterested quorum of the directors, by independent legal counsel or by the shareholders that the person seeking indemnification acted in good faith and in a manner reasonably believed to be in best interests of the corporation. Without court approval, however, no indemnification may be made in respect of any derivative action in which such person is adjudged liable for negligence or misconduct in the performance of his or her duty to the corporation. Expenses incurred by an officer or director in defending an action may be paid in advance under Delaware law or California law, if the director or officer undertakes to repay such amounts if it is ultimately determined that he or she is not entitled to indemnification. In addition, the laws of both states authorize a corporation to purchase indemnity insurance for the benefit of its officers, directors, employees and agents whether or not the corporation would have the power to indemnify against the liability covered by the policy.

 

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California law permits a California corporation to provide rights to indemnification beyond those provided therein to the extent such additional indemnification is authorized in the corporation’s articles of incorporation. Thus, if so authorized, rights to indemnification may be provided pursuant to agreements or bylaw provisions which make mandatory the permissive indemnification provided by California law. The California Articles authorize indemnification to the fullest extent permissible under California law. Delaware law also permits a Delaware corporation to provide indemnification in excess of that provided by statute. Delaware law does not require authorizing provisions in the certificate of incorporation.

 

This excerpt taken from the QSFT 10-Q filed Nov 6, 2008.

4.2 Indemnification.

(a) From and after the Effective Time (but subject to Section 4.1(b) and Section 4.3), the Indemnitees shall be entitled to be held harmless and indemnified from the Escrow Fund from and against, and shall be entitled to be compensated and reimbursed from the Escrow Fund for, any Damages which are suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are connected with:

(i) any inaccuracy in or breach of any representation or warranty set forth in Section 2; provided, however that solely for purposes of Section 4 and the determination of the indemnification obligations under this Section 4.2(a)(i) and the determination of the amount of Damages with respect thereto, any qualifications by the terms “material” or “Material Adverse Effect” set forth in the text of the Company’s representations and warranties in Section 2 shall be ignored (i.e., the representations and warranties in Section 2 shall be read as though the terms “material” or “Material Adverse Effect” have been deleted);

(ii) any breach of any obligation of the Company set forth in this Agreement;

(iii) any claim asserted by any Person who is or was, or who claims to be or to have been, the holder of, or entitled to acquire or receive, any stock, option or other security of any of the Acquired Corporations;

(iv) the exercise by any stockholder of the Company of such stockholder’s appraisal rights under the DGCL (it being understood that any portion of the Closing Consideration and Escrow Fund released to Parent with respect to such stockholder pursuant to Section 1.9(a) shall be taken into account in calculating Damages with respect to this clause “(iv)”);

(v) any inaccuracy in Schedule 1.5(d); provided, however that if the inaccuracy relates to an accrual or reserve specifically listed in Schedule 1.5(d) and taken into account in calculating the Adjustment Amount, then:(A) any other accrual or reserve specifically listed in Schedule 1.5(d) and taken into account in calculating the Adjustment Amount which was, in the case of liabilities, in an amount greater than the actual liabilities applicable to that reserve and greater than the amount to be reserved in accordance with GAAP (applied on a basis

 

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consistent with the Company’s Financial Statements and determined at Closing) or, in the case of an allowance for doubtful accounts, in an amount greater than the amount of accounts receivable which have not been collected); and (B) any deposit received in the Company’s bank account on September 11, 2008 and which was not included in the Company’s account receivables shall also be included in determining whether there has been a net inaccuracy in the Adjustment Amount (e.g., if Parent claims that the accrual amount for a particular liability listed on Schedule 1.5(d) was too low but other accruals were determined to have been too high, then Parent shall only be entitled to indemnification under this Section 4.3(a)(iv) for the amount such under-accrual(s) exceeds the over-accrual(s);

(vi) any of the following items:

(A) the disclosure in Section A of Part 2.2 of the Disclosure Schedule; or

(B) any inaccuracy in the disclosure in Section 2(a) of Part 2.15(c) of the Disclosure Schedule; or

(vii) any Legal Proceeding brought by a third party relating to any inaccuracy, breach, claim, appraisal rights, expense or fee of the type referred to in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(v)” or clause “(vi)” above and any such Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 4.2(a) with respect to which the Indemnitee is the prevailing party pursuant to a final, non-appealable judgment.

(b) The parties acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its ownership of the stock of the Surviving Corporation, to have incurred Damages as a result of and in connection with such inaccuracy or breach (it being understood that any Damages suffered or incurred by the Surviving Corporation shall be recoverable under this Section 4 by either Parent or the Surviving Corporation, but not both of them).

This excerpt taken from the QSFT 10-Q filed Dec 31, 2007.

10.2 Indemnification.

(a) Without limiting the rights of any Indemnitee under Section 10.2(b) or Section 10.2(c), from and after the Effective Time (but subject to Section 10.1(a)), the Indemnitees shall be entitled to be held harmless and indemnified from the Escrow Fund from and against, and shall be entitled to be compensated and reimbursed from the Escrow Fund for, any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim), and that arise from or as a result of, or are directly or indirectly connected with:

(i) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as of the date of this Agreement (without giving effect to (A) any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty (other those set forth in Sections 2.5, 2.8, 2.9(c)(iii), 2.10(a)(vii), 2.10(a)(xviii), 2.10(d), 2.12(b) (first sentence), 2.17 (first sentence) and 2.25), or (B) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

(ii) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to (A) any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty (other those set forth in Sections 2.5, 2.8, 2.9(c)(iii), 2.10(a)(vii), 2.10(a)(xviii), 2.10(d), 2.12(b) (first sentence), 2.17 (first sentence) and 2.25), or (B) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

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(iii) any breach of any covenant or obligation of the Company;

(iv) 50% of any Transaction Expenses in excess of the amount set forth in the Closing Payment Schedule;

(v) any liability of any Acquired Corporation for any delinquent state sales and use Taxes owed in any jurisdiction relating to transactions effected or activities conducted at or prior to the Effective Time (it being understood that the Damages recoverable by the Indemnitees pursuant to this clause “(v)” shall include the amount of all such liabilities for any delinquent state sales and use Taxes paid by the Acquired Corporations since March 31, 2007 and all Damages relating to the matters disclosed in Part 2.14(a) of the Disclosure Schedule regarding state sales and use taxes, and it being further understood that Parent shall consult with management of the Company regarding the determination and mitigation of such Taxes), to the extent the total amount of all such liabilities exceeds $100,000 in the aggregate;

(vi) the exercise by any stockholder of the Company of such stockholder’s appraisal rights under the DGCL; or

(vii) any Legal Proceeding relating to any inaccuracy, breach, Transaction Expenses, liability or appraisal rights of the type referred to in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(v)” or clause “(vi)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(a)).

Recourse by the Indemnitees to the Escrow Fund shall be the Indemnitees’ exclusive remedy after the Effective Time for any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Company set forth in this Agreement, except for: (I) inaccuracies in or breaches of the Specified Representations; and (II) Willful Breaches of the Company’s representations, warranties, covenants and obligations.

(b) Without limiting the rights of any Indemnitee under Section 10.2(a) or Section 10.2(c), from and after the Effective Time, each Key Stockholder shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, such Key Stockholder’s Allocable Percentage of the amount of any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim, except for clauses “(iii)” and “(iv)” (and clause “(vi)” to the extent relating to clauses “(iii)” or “(iv)”) for which such Damages must relate to a third-party claim), and that arise from or as a result of, or are directly or indirectly connected with:

(i) any inaccuracy in or breach of any Specified Representation (other than the Specified §2.9 Representations) as of the date of this Agreement (without giving effect to any “Material Adverse Effect” or other materiality qualification contained in such Specified Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

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(ii) any inaccuracy in or breach of any Specified Representation (other than the Specified §2.9 Representations) as if such Specified Representation had been made on and as of the Closing Date (without giving effect to any “Material Adverse Effect” or other materiality qualification contained such Specified Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

(iii) any inaccuracy in or breach of any Specified §2.9 Representation as of the date of this Agreement (without giving effect to any “Material Adverse Effect” or other materiality qualification contained in such Specified §2.9 Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement) resulting in a third-party claim, other than a third-party claim that would not have been made but for an action taken by Parent primarily with the intent to cause the third party to make such claim;

(iv) any inaccuracy in or breach of any Specified §2.9 Representation as if such Specified §2.9 Representation had been made on and as of the Closing Date (without giving effect to any “Material Adverse Effect” or other materiality qualification contained such Specified §2.9 Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement) resulting in a third-party claim, other than a third-party claim that would not have been made but for an action taken by Parent primarily with the intent to cause the third party to make such claim;

(v) any Willful Breach of any representation, warranty, covenant or obligation of the Company; or

(vi) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv)” or clause “(v),” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(b)).

An Indemnitee may only assert an indemnification claim under this Section 10.2(b) if it also asserts an indemnification claim under Section 10.2(a) with respect to the same inaccuracy or breach (unless the Escrow Fund has already been exhausted).

(c) Without limiting the rights of any Indemnitee under Section 10.2(a) or Section 10.2(b), from and after the Effective Time, subject to the terms of this Agreement, each Key Stockholder shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and that arise from or as a result of, or are directly or indirectly connected with:

(i) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as of the date of this Agreement (without giving effect to any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

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(ii) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

(iii) any breach of any covenant or obligation of such Key Stockholder; or

(iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clause “(i),” clause “(ii)” or clause “(iii)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(c)).

(d) The parties acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its ownership of the stock of the Surviving Corporation, to have incurred Damages as a result of and in connection with such inaccuracy or breach (it being understood that any Damages suffered or incurred by the Surviving Corporation shall be recoverable under this Section 10 by either Parent or the Surviving Corporation, but not both of them).

(e) “Material Adverse Effect” or other materiality qualifications contained in Sections 2.5, 2.8, 2.9(c)(iii), 2.10(a)(vii), 2.10(a)(xviii), 2.10(d), 2.12(b) (first sentence), 2.17 (first sentence) and 2.25 shall only be taken into account in determining whether an inaccuracy in or breach of such representations and warranties exists, but shall not be taken into account in determining the amount of any Damages with respect to such inaccuracy or breach.

This excerpt taken from the QSFT 8-K filed Jun 6, 2005.

10.2 Indemnification.

 

(a) Without limiting the rights of any Indemnitee under Section 10.2(b), from and after the Effective Time (but subject to Section 10.1(a) and Section 10.3), the Non-Dissenting Stockholders shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees (without duplication) for, any Damages which are suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are connected with:

 

(i) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as of the date of this Agreement (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement);

 

(ii) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement except to the extent of any matter set forth in such Disclosure Schedule Update that is the subject of a valid Notice of Termination Right);

 

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(iii) any inaccuracy in or breach of any representation or warranty set forth in any of the certificates referred to in Sections 7.7(i), 7.7(j) and 7.7(k) (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement except to the extent of any matter set forth in such Disclosure Schedule Update that is the subject of a valid Notice of Termination Right);

 

(iv) any breach of any covenant or obligation of the Company set forth in this Agreement;

 

(v) any claim asserted by any Person who is or was, or who claims to be or to have been, the holder of, or entitled to acquire or receive, any stock, option or other security of any of the Acquired Corporations;

 

(vi) the exercise by any stockholder of the Company of such stockholder’s dissenters’ rights under the UBCA, including the excess, if any, of (A) the amount per share ultimately awarded to a holder of Dissenting Shares in any dissenters’ rights proceeding over (B) the Common Stock Per Share Closing Amount;

 

(vii) any Transaction Expenses, if not otherwise taken into account in determining the Common Stock Per Share Closing Amount under Section 1.5;

 

(viii) any Tax liability for which the Company is entitled to indemnification under the terms of the Tax Allocation Agreement, to the extent not paid by The Canopy Group, Inc. (and in the event that any Indemnitee actually receives any indemnification payment on account of this clause “(viii),” the Non-Dissenting Stockholders (other than The Canopy Group, Inc) who have made such payment or otherwise borne such obligation shall to such extent, and to the extent otherwise permitted by law and provided that The Canopy Group, Inc.’s obligations to the Company shall first have been fully satisfied, be thereafter subrogated to the Company’s indemnification rights against The Canopy Group, Inc. under the Tax Allocation Agreement); or

 

(ix) any Legal Proceeding relating to any inaccuracy, breach, claim, dissenters’ rights, expense or fee of the type referred to in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(v),” clause “(vi),” clause “(vii)” or clause “(viii)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(a)).

 

(b) Without limiting the rights of any Indemnitee under Section 10.2(a), from and after the Effective Time, each Key Stockholder shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not

 

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such Damages relate to any third-party claim) and that arise from or as a result of, or are directly or indirectly connected with:

 

(i) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as of the date of this Agreement (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement);

 

(ii) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement except to the extent of any matter set forth in such Disclosure Schedule Update that is the subject of a valid Notice of Termination Right);

 

(iii) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in the Key Stockholder Certificate (without giving effect to any Disclosure Schedule Update made or purported to have been made on or after the date of this Agreement except to the extent of any matter set forth in such Disclosure Schedule Update that is the subject of a valid Notice of Termination Right);

 

(iv) any breach of any covenant or obligation of such Key Stockholder set forth in this Agreement; or

 

(v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clause “(i),” clause “(ii),” clause “(iii)” or clause “(iv)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(b)).

 

(c) The parties acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its ownership of the stock of the Surviving Corporation, to have incurred Damages as a result of and in connection with such inaccuracy or breach (it being understood that any Damages suffered or incurred by the Surviving Corporation shall be recoverable under this Section 10 by either Parent or the Surviving Corporation, but not both of them).

 

This excerpt taken from the QSFT 8-K filed May 2, 2005.

10.2 Indemnification.

 

(a) Without limiting the rights of any Indemnitee under Section 10.2(b) or Section 10.2(c), from and after the Effective Time (but subject to Section 10.1(a)), the Indemnitees shall be entitled to be held harmless and indemnified from the Escrow Fund from and against, and shall be entitled to be compensated and reimbursed from the Escrow Fund for, any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim), and that arise from or as a result of, or are directly or indirectly connected with:

 

(i) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as of the date of this Agreement (without giving effect to (A) any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty (other those set forth in Sections 2.4(c), 2.8, 2.9(c)(iii), 2.10(a)(vii), 2.10(a)(xviii), 2.10(c), 2.10(d) and 2.25), (B) any “Knowledge” qualification contained in any representation or warranty set forth in Section 2.9, Section 2.10(c), Section 2.10(d), Section 2.14 or Section 2.15, or (C) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

(ii) any inaccuracy in or breach of any representation or warranty set forth in Section 2 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to (A) any “Material Adverse Effect” or other materiality qualification contained in such representation or warranty (other those set forth in Sections 2.4(c), 2.8, 2.9(c)(iii), 2.10(a)(vii), 2.10(a)(xviii), 2.10(c), 2.10(d) and 2.25), (B) any “Knowledge” qualification contained in any representation or warranty set forth in Section 2.9,

 

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Section 2.10(c), Section 2.10(d), Section 2.14 or Section 2.15, or (C) any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

(iii) any breach of any covenant or obligation of the Company;

 

(iv) any Transaction Expenses in excess of the amount set forth in the Closing Payment Schedule;

 

(v) any liability of any Acquired Corporation for any delinquent Taxes owed in any jurisdiction relating to transactions effected or activities conducted at or prior to the Effective Time (it being understood that the Damages recoverable by the Indemnitees pursuant to this clause “(v)” shall include the amount of all such liabilities paid by the Acquired Corporations since March 31, 2005), to the extent the total amount of all such liabilities exceeds $75,000 in the aggregate;

 

(vi) the exercise by any stockholder of the Company of such stockholder’s appraisal rights under the DGCL; or

 

(vii) any Legal Proceeding relating to any inaccuracy, breach, Transaction Expenses, liability or appraisal rights of the type referred to in clause “(i),” clause “(ii),” clause “(iii),” clause “(iv),” clause “(v)” or clause “(vi)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(a)).

 

Recourse by the Indemnitees to the Escrow Fund shall be the Indemnitees’ exclusive remedy after the Effective Time for any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Company set forth in this Agreement, except for (I) inaccuracies in or breaches of the Specified Representations, and (II) Willful Breaches of the Company’s representations, warranties, covenants and obligations; provided, however, that nothing contained in this Section 10.2(a) or elsewhere in this Agreement shall limit the rights of any Indemnitee to seek or obtain injunctive relief or any other equitable remedy to which such Indemnitee is otherwise entitled.

 

(b) Without limiting the rights of any Indemnitee under Section 10.2(a) or Section 10.2(c), from and after the Effective Time, each Key Stockholder shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, such Key Stockholder’s Allocable Percentage of the amount of any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim), and that arise from or as a result of, or are directly or indirectly connected with:

 

(i) any inaccuracy in or breach of any Specified Representation as of the date of this Agreement (without giving effect to any “Material Adverse Effect” or other materiality qualification or any “Knowledge” qualification contained in such Specified Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

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(ii) any inaccuracy in or breach of any Specified Representation as if such Specified Representation had been made on and as of the Closing Date (without giving effect to any “Material Adverse Effect” or other materiality qualification or any “Knowledge” qualification contained such Specified Representation, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

(iii) any Willful Breach of any representation, warranty, covenant or obligation of the Company; or

 

(iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clause “(i),” clause “(ii)” or clause “(iii)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(b)).

 

If an Indemnitee asserts an indemnification claim under this Section 10.2(b) with respect to any inaccuracy or breach, such Indemnitee may, but shall not be obligated to, simultaneously assert an indemnification claim under Section 10.2(a) with respect to the same inaccuracy or breach.

 

(c) Without limiting the rights of any Indemnitee under Section 10.2(a) or Section 10.2(b), from and after the Effective Time, subject to the terms of this Agreement, each Key Stockholder shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, any Damages that are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and that arise from or as a result of, or are directly or indirectly connected with:

 

(i) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as of the date of this Agreement (without giving effect to any “Material Adverse Effect” or other materiality qualification or any “Knowledge” qualification contained in such representation or warranty, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

(ii) any inaccuracy in or breach of any representation or warranty of such Key Stockholder set forth in Section 3 as if such representation and warranty had been made on and as of the Closing Date (without giving effect to any “Material Adverse Effect” or other materiality qualification or any “Knowledge” qualification contained in such representation or warranty, and without giving effect to any update of or modification to the Disclosure Schedule made or purported to have been made on or after the date of this Agreement);

 

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(iii) any breach of any covenant or obligation of such Key Stockholder; or

 

(iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clause “(i),” clause “(ii)” or clause “(iii)” above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 10.2(c)).

 

(d) The parties acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its ownership of the stock of the Surviving Corporation, to have incurred Damages as a result of and in connection with such inaccuracy or breach (it being understood that any Damages suffered or incurred by the Surviving Corporation shall be recoverable under this Section 10 by either Parent or the Surviving Corporation, but not both of them).

 

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