This excerpt taken from the VRSN 10-K filed Mar 16, 2005.
Should any of the representations or warranties contained in Section 5 be inaccurate in full or in part, the SELLERS shall use their best efforts to put the PURCHASER or the
COMPANY, at the PURCHASERs sole discretion, within a period of four weeks after receipt of written notice by the PURCHASER, in the situation which corresponds to the situation warranted. After futile expiry of the four week period or if a cure
(Herstellung) of the warranted situation is not possible, the PURCHASER shall be entitled to claim money damages (Schadensersatz) in the amount necessary to put it or the COMPANY or its SUBSIDIARIES, at the PURCHASERs sole
discretion, in the economic situation it would have been in if the representations or warranties had been accurate. In case of a breach of a representation or warranty contained in Section 5, PURCHASERs rights are limited to those set out in
the AGREEMENT and other statutory rights are hereby explicitly
excluded, including but not limited to rescission of this AGREEMENT (Rücktritt), price reductions (Minderung), performance (Nacherfüllung), avoidance
on the grounds of lack of material characteristics (Anfechtung wegen Fehlen einer wesentlichen Eigenschaft) or all claims based on the violations of contractual or pre-contractual duties (positive Vertragsverletzung or culpa in
contrahendo, Section 311 para 2 of the German Civil Code) or due to frustration of the contract (Wegfall der Geschäftsgrundlage, Section 313 Civil Code), unless otherwise provided in this AGREEMENT or in case of fraud or intentional
The SELLERS shall indemnify (freistellen) the PURCHASER or the COMPANY, at the PURCHASERs sole discretion, immediately from any damage claims
(Schadensersatzansprüchen) or obligations towards third parties for which the SELLERS are liable under this AGREEMENT. In the event the PURCHASER becomes aware of a third-party claim which the PURCHASER believes may result in a demand
against the ESCROW FUND, the PURCHASER shall promptly notify the SELLERS REPRESENTATIVE of such claim, and the SELLERS REPRESENTATIVE shall be entitled, at its expense, to participate in any defense of such claim. The PURCHASER shall have the right
to settle any such claim; provided, however, that the PURCHASER may not effect the settlement of any such claim without the prior written consent of the SELLERS REPRESENTATIVE, which consent shall not be unreasonably withheld.
In case (i) not all the SHARES are validly assigned to the PURCHASER, (ii) the SHARES do not constitute the entire share capital of the COMPANY or (iii) further stock options or
related subscription rights (Bezugsrechte) other than those listed in APPENDIX 5.1.2 exist and SELLERS therefore breach a warranty under Section 5, SELLERS shall in addition to damage claims under Section 6.1 pay to the
PURCHASER, at PURCHASERs sole discretion, (i) any amount necessary to purchase any shares or stock options not held by the PURCHASER or (ii) all costs necessary to prepare and execute a squeeze-out within the meaning of § 327a German
Stock Corporation Act (AktG) et seq., including, but not limited to, all reasonable legal costs incurred by the PURCHASER. PURCHASER is free to choose any law firm at customary hourly rates in order to purchase shares not held by it or to
prepare and execute the squeeze-out.
No liability under Section 6.1 and 6.2 (to the extent a third party claim constitutes a breach of the representations and warranties contained in Section 5.1) or under Section 7.3
shall arise for the SELLERS if the aggregate amount of claims under Sections 6.1 and 6.2 (to the extent a third party
claim constitutes a breach of the representations and warranties contained in Section 5.1) and 7.3 (inclusive of reasonable legal, accounting or other fees and expenses) of the
PURCHASER falls short of an amount of USD 500,000 (the DEMINIMIS CAP); if the amount of USD 500,000 is exceeded, the PURCHASER shall have the right to recover the total amount of the claim from the first US Dollar. The DEMINIMIS
CAP is not applicable if (i) a claim resulted from a breach of a SPECIAL REPRESENTATION, excluding a claim for breach of Sections 5.1.55, 5.1.58 or 7.3, as to which the DEMINIMIS CAP shall apply, or (ii) fraud or intentional misconduct of the
SELLERS. For purposes of this AGREEMENT, the term intentional misconduct shall mean a knowing or intentional (vorsätzlich) act or omission irrespective of whether damages arising from such act or omission were foreseeable.
Purchaser shall not have a claim for breach of representations and warranties under Section 5 if and to the extent to which a provision has been made in the ACCOUNTS with respect to
a specific matter which is the subject of an inaccurate guarantee. In case the PURCHASER has made a claim for breach of representations and warranties under Section 5 against the SELLERS which SELLERS have satisfied, the PURCHASER shall pay to the
SELLERS any amounts received in case if and to the extent such damage is (a) recovered by insurance or (b) PURCHASER and/or the COMPANY or the relevant SUBSIDIARY enforces a claim for compensation against a third person.
SELLERS aggregate liability under Section 6.1 and 6.2 (to the extent a third party claim constitutes a breach of the representations and warranties contained in Section 5.1)
shall be limited to the VERISIGN COMMON STOCK held in the ESCROW FUND under the ESCROW AGREEMENT (the LIABILITY CAP); provided, however, that claims made by the PURCHASER for breach of Sections 5.1.2, 5.1.3, 5.1.55, 5.1.58 and
5.1.66 (the SPECIAL REPRESENTATIONS) and claims under Section 7.3, and claims resulting from fraud or intentional (vorsätzlich) misconduct of the SELLERS are not subject to the LIABILITY CAP. If a claim is made by the
PURCHASER for a breach of a SPECIAL REPRESENTATION, SELLERS aggregate liability under this AGREEMENT shall be limited to the PURCHASE PRICE, unless a claim has been caused by fraud or intentional misconduct of the SELLERS, in which case no
limitation of liability shall apply. In case of a claim for breach of a SPECIAL REPRESENTATION, excluding a claim for breach of Sections 5.1.55 and 5.1.58, or in case of a claim resulting from fraud or intentional misconduct of the SELLERS, the
PURCHASER shall not be obligated to claim damages against the ESCROW FUND prior to claiming damages against the SELLERS. Claims for breaches of Sections 5.1.55, 5.1.58 and
7.3 have to be made against the ESCROW FUND prior to claiming damages against the SELLERS, provided that there are sufficient assets in the ESCROW FUND that are not subject to
another claim of the PURCHASER.
With respect to claims of the PURCHASER for breach of SPECIAL REPRESENTATIONS or claims for fraud or intentional misconduct, SELLERS shall be severally liable (teilschuldnerische
Haftung) to the PURCHASER; provided, however, that SELLERS shall be jointly and severally liable with respect to claims of the PURCHASER for breach of Sections 5.1.3, 5.1.55 and 5.1.58 and claims under Section 7.3. In case fraud or intentional
misconduct was performed by more than one of the SELLERS, the acting SELLERS shall be jointly and severally liable (gesamtschuldnerische Haftung). No SELLER shall be responsible for fraud or intentional misconduct of any other SELLER unless
he participated therein. In case of a breach of a SPECIAL REPRESENTATION a SELLERs liability shall be limited pro rata (im Verhältnis) of his INDIVIDUAL PURCHASE PRICE PORTION compared to the PURCHASE PRICE. In case of fraud or
intentional misconduct a SELLERs liability shall be unlimited.
Any VERISIGN COMMON STOCK held in the ESCROW FUND shall serve exclusively as a security for all claims of the PURCHASER until released in accordance with the AGREEMENT and the
ESCROW AGREEMENT. The ESCROW FUND shall be governed by the terms set forth herein and in the ESCROW AGREEMENT. Within five days after the CLOSING DATE, the PURCHASER shall deposit the ESCROW FUND with the ESCROW AGENT. Any disposal of the ESCROW
FUND shall only be effected by the ESCROW AGENT in accordance with this AGREEMENT and the ESCROW AGREEMENT.
In case an EMPLOYEE claims against the COMPANY that he or she has not validly waived his or her rights under the STOCK OPTION PLAN including the right to exercise STOCK OPTIONS or
that he or she should have received stock options or related subscription rights (Bezugsrechte) of the COMPANY under the employment law principle of equal treatment (arbeitsrechtlicher Gleichbehandlungsgrundsatz) or from customary
operations (betriebliche Übung), SELLERS shall upon first written demand of the PURCHASER indemnify PURCHASER or the COMPANY, at PURCHASERs sole discretion, from any and all claims made by such EMPLOYEE, including but not limited
to all reasonable legal, accounting or advisory fees involved in defending such claims. In case an EMPLOYEE is awarded stock options or related subscription rights (Bezugsrechte) by a
court, Section 6.3 shall apply accordingly. Sections 6.4 to 6.7, inclusive, shall not apply. A SELLERs aggregate liability under Section 6.9 and the other sections of this
Section 6 and under Section 7.3 shall not exceed his INDIVIDUAL PURCHASE PRICE PORTION of the PURCHASE PRICE, with the exception of fraud and intentional misconduct.
It is the understanding of the PARTIES that any payment of indemnification hereunder shall be treated for tax purposes as an adjustment to the PURCHASE PRICE.