American Home Shield 2009 Annual Report Download - page 18

Table of Contents
other intellectual property infringement against us, or any other successful challenge to the use of our intellectual property, could subject us to damages or
prevent us from providing certain services under our recognized brand names, which could have a material adverse effect on our financial position, results of
operations and cash flows.
Disruptions or security failures in our information technology systems could create liability for us and/or limit our ability to effectively monitor,
operate and control our operations and adversely affect our operating results.
Our information technology systems facilitate our ability to monitor, operate and control our operations. Any disruption in or failure of our information
technology systems to operate as expected could, depending on the magnitude of the problem, adversely affect our financial position, results of operations and
cash flows by limiting, among other things, our capacity to monitor, operate and control our operations effectively. If our disaster recovery plans do not work
as anticipated, or if the third party vendor to which we have outsourced certain information technology services fails to fulfill its obligations to us, our
operations may be adversely impacted. In addition, because our systems contain information about individuals and businesses, our failure to maintain the
security of the data we hold, whether the result of our own error or the malfeasance or errors of others, could harm our reputation or give rise to legal
liabilities relating to violations of privacy laws or otherwise, which may lead to lower revenues, increased costs and other material adverse effects on our
financial position, results of operations and cash flows.
If we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions or
private litigation and our reputation could suffer.
We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential
customer information, such as payment card and personal information. The systems currently used for transmission and approval of payment card
transactions, and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and controlled by the
payment card industry, not by us. Improper activities by third parties, advances in computer and software capabilities and encryption technology, new tools
and discoveries and other events or developments may facilitate or result in a compromise or breach of our systems. Any compromises, breaches or errors in
application could cause interruptions in our operations, damage to our reputation and customers' willingness to purchase our services, result in a violation of
applicable laws, regulations, orders and agreements and subject us to costs and liabilities which could have a material adverse effect on our financial position,
results of operations and cash flows.
We are subject to various restrictive covenants that could adversely impact our operations.
From time to time, we enter into noncompetition agreements that restrict us from entering into lines of business or operating in certain areas into which
we may desire to expand our business. We also are subject to various non-solicitation and no hire covenants that may restrict our ability to solicit potential
customers or employees. To the extent that such restrictive covenants prevent us from taking advantage of business opportunities, or we fail to comply with
them, our operations may be adversely impacted.
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