Common use of BACKGROUND OF THE ACTION Clause in Contracts

BACKGROUND OF THE ACTION. On September 13, 2013, Petitioner ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“Petitioner”) filed a shareholder derivative petition (the “Petition”) in the Court, captioned ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ et al, Cause No. D-1-GN-13-003230 (the “Okumura Action”), on behalf of Active Power and against Active Power’s Board of Directors and certain officers of Active Power (collectively, the “Individual Defendants”). The Petition alleges that, from approximately April 30, 2013 through September 5, 2013, the Individual Defendants issued or authorized the issuance of materially false or misleading statements regarding a purported strategic partnership between Active Power and Digital China Information Service Company Limited “Digital China”). On September 5, 2013, however, Active Power, through a press release, revealed that it did not have a strategic partnership with Digital China as previously announced. The Petition alleged that the Individual Defendants breached their fiduciary duties owed to Active Power and its shareholders by issuing or authorizing the issuance of materially false or misleading statements regarding its purported relationship with Digital China and by failing to implement, maintain, or follow adequate internal controls to ensure that the information disclosed about Active ▇▇▇▇▇’s purported relationship with Digital China was accurate. Based on these allegations, the Petition asserted claims for breach of fiduciary duty and unjust enrichment against the Individual Defendants.

BACKGROUND OF THE ACTION. On September 13, 2013, Petitioner ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“Petitioner”) filed a shareholder derivative petition (the “Petition”) in the Court, captioned ▇▇▇▇▇▇▇ Okumura ▇. ▇▇▇▇▇▇▇ et al, Cause No. D-1-GN-13-003230 (the “Okumura Action”), on behalf of Active Power and against Active Power’s Board of Directors and certain officers of Active Power (collectively, the “Individual Defendants”). The Petition alleges that, from approximately April 30, 2013 through September 5, 2013, the Individual Defendants issued or authorized the issuance of materially false or misleading statements regarding a purported strategic partnership between Active Power and Digital China Information Service Company Limited “Digital China”). On September 5, 2013, however, Active Power, through a press release, revealed that it did not have a strategic partnership with Digital China as previously announced. The Petition alleged that the Individual Defendants breached their fiduciary duties owed to Active Power and its shareholders by issuing or authorizing the issuance of materially false or misleading statements regarding its purported relationship with Digital China and by failing to implement, maintain, or follow adequate internal controls to ensure that the information disclosed about Active ▇▇▇▇▇Power’s purported relationship with Digital China was accurate. Based on these allegations, the Petition asserted claims for breach of fiduciary duty and unjust enrichment against the Individual Defendants.