Delaware Business Litigation Report

Court of Chancery Holds Contractually Granted Advancement Rights Not Abrogated by Subsequent Indemnification Agreement Containing Integration Clause

Brady v. i2 Technologies Inc., C.A. No. 1543-N, 2005 WL 3691286 (Del. Ch. Dec. 14, 2005). A former executive and director sought advancement of his expenses in connection with the defense of certain proceedings based on a standard corporate advancement provision in a 1996 indemnification agreement. Defendant corporation argued that an integration clause in a subsequent 2002 severance agreement, which stated that the 2002 agreement expressed the entire agreement between the parties "with respect to the subject matter hereof," abrogated the advancement obligation imposed by 1996 agreement. In the context of granting summary judgment in Plaintiff's favor, the court ruled that the integration clause did not abrogate Plaintiff's advancement rights. The court explained that the advancement contemplated by the 1996 agreement was wholly different from the indemnity payment contemplated by the 2002 agreement, leaving the 1996 agreement's advancement provision unaffected by the 2002 agreement's integration clause. Share