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Section 1: 8-K (8-K)

8-K
TechTarget Inc false 0001293282 0001293282 2020-12-09 2020-12-09

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 9, 2020

 

 

TechTarget, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   1-33472   04-3483216

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

275 Grove Street,

Newton, MA

  02466
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 431-9200

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of exchange

on which registered

Common Stock, $0.001 per value per share   TTGT   NASDAQ Global Market

 

 

 


Item 1.01.

Entry into a Material Definitive Agreement.

Purchase Agreement

On December 9, 2020, TechTarget, Inc. (the “Company”) and BrightTalk Limited, a private company limited by shares incorporated in England (“BrightTalk”) entered into an Equity Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to purchase the issued and outstanding equity interests of BrightTalk. BrightTalk is a technology media company that provides customers with a platform to create, host, and promote webinar and video content to reach new audiences and engage relevant business professionals.

The purchase price to be paid at the closing of the transaction by the Company pursuant to the Purchase Agreement is equal to $150 million, subject to working capital and other adjustments set forth in the Purchase Agreement. The Company has secured committed financing in the form of a bridge loan from JPMorgan Chase Bank, N.A., as described below, to cover the purchase price in combination with cash on hand, and is contemplating options for permanent financing which may include public or private offerings of equity or debt securities or facilities. The Company’s obligation to complete the transaction is not subject to a financing condition. The Company expects the transaction to close by the end of 2020.

The Purchase Agreement contains customary representations, warranties, covenants, closing conditions and other provisions, including indemnification obligations of the Company and the BrightTalk equity holders for, among other matters, breaches of representations, warranties and covenants, in each case subject to the applicable limitations specified in the Purchase Agreement.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.

The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of the Purchase Agreement, were made as of specific dates, were made solely for the benefit of the parties to the Purchase Agreement and may not have been intended to be statements of fact but, rather, as a method of allocating risk and governing the contractual rights and relationships between the parties to the Purchase Agreement. The assertions embodied in those representations and warranties may be subject to important qualifications and limitations agreed to by the Company and BrightTalk in connection with negotiating their respective terms. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to stockholders. For the foregoing reasons, none of the Company’s stockholders or any other person should rely on such representations and warranties, or any characterizations thereof, as statements of factual information at the time they were made or otherwise.

Bridge Loan Commitment Letter

Also on December 9, 2020 and in connection with the execution of the Purchase Agreement, the Company executed a commitment letter (the “Commitment Letter”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), pursuant to which JPMorgan has committed to provide the Company with a 6-month term loan facility in an aggregate principal amount of $145 million to fund the Company’s acquisition of BrightTalk pursuant to the Purchase Agreement. Amounts drawn under the facility will bear interest, at the Company’s option, at an adjusted rate of LIBOR plus 2.50% or a rate equal to 1.50% plus the highest of (a) the prime rate, (b) the higher of (x) the federal funds effective rate and (y) the overnight bank funding rate, in each case plus 0.50% and (c) one-month LIBOR plus 1.00%.

 

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The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

 

Item 1.02.

Termination of Material Definitive Agreement.

On December 9, 2020, the Company terminated its Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank as the lender. The Loan Agreement provided for a $25 million term loan facility, which the Company repaid on December 9, 2020, and a $20 million revolving line of credit, which had no outstanding balance.

 

Item 9.01.

Financial Statements and Exhibits.

(d)     Exhibits. The following exhibits are filed or furnished, as applicable, with this report:

 

Exhibit
No.

  

Document

  2.1    Equity Purchase Agreement, dated December 9, 2020, by and between the Company and BrightTalk.*
10.1    Commitment Letter, dated December 9, 2020, by and between the Company and JPMorgan.*
 104    Cover Page Interactive Data File (formatted as Inline XBRL).

 

*

Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the U.S. Securities and Exchange Commission; except that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished. A list identifying the contents of all omitted exhibits and schedules can be found on page (iv) to Exhibit 2.1 to this Current Report. Exhibits A, C and D, and all schedules and annexes thereto, and all exhibits, schedules and annexes to Exhibit B have been omitted from Exhibit 10.1 to this Current Report.

Safe Harbor For Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this Current Report that address activities, events or developments which we expect will or may occur in the future are forward-looking statements, including statements regarding our intent, beliefs or current expectations and those of our management team. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Important factors that may cause or contribute to such differences include the risk that the parties will not be able to complete the transaction on the anticipated timeline or at all; the risk that the conditions to the completion of the transaction will not be satisfied on a timely basis or at all; the

 

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risk that the Company is unable to raise requisite financing for the transaction on acceptable terms or at all; the risk that the Company will not realize the anticipated benefits of the transaction; the risk that the Company will not be able to successfully integrate BrightTalk’s business into the Company’s business; the risk that the Company will incur higher than expected or unexpected costs in connection with the transaction; the risk that the Company will not be able to retain or hire key personnel; the risk that disruption from the transaction may adversely affect the Company’s business, including its relationships with its customers and employees; and such other factors as are set forth in the risk factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including, without limitation, the risk factors detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements, except to the extent required by law.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    TechTarget, Inc.  
Date: December 11, 2020     By:  

/s/ Daniel Noreck

 
      Daniel Noreck  
      Chief Financial Officer and Treasurer  
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Section 2: EX-2.1 (EX-2.1)

EX-2.1

EXHIBIT 2.1

EQUITY PURCHASE AGREEMENT

by and among

TECHTARGET, INC,

BRIGHTTALK LIMITED,

THE SELLERS LISTED ON SCHEDULE 1-A HERETO,

AND

SOLELY IN HIS CAPACITY AS EQUITYHOLDER REPRESENTATIVE,

RUSSELL PYLE

Dated as of December 9, 2020


TABLE OF CONTENTS

 

         Page  

Article I PURCHASE AND SALE

     1  

1.1

  Purchase and Sale      1  

1.2

  Closing; Actions at the Closing      2  

1.3

  Closing Payment Certificate; Closing Date Payments      3  

1.4

  Escrow      4  

1.5

  Equityholder Representative      4  

1.6

  Adjustment Before and After the Closing      7  

1.7

  Closing Date Allocation Schedule; Payment of Future Payments      10  

1.8

  Payment Fund      10  

1.9

  Company Options      11  

1.10

  Withholding Rights      13  

1.11

  Further Assurances      13  

Article II REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS

     13  

2.1

  Legal Capacity      13  

2.2

  Ownership of Equity Interests in the Company      14  

Article III REPRESENTATIONS AND WARRANTIES REGARDING THE GROUP COMPANIES

     15  

3.1

  Organization, Standing and Corporate Power      15  

3.2

  Capitalization      15  

3.3

  Subsidiaries      17  

3.4

  Authority; No Conflict; Required Filings and Consents      18  

3.5

  Solvency      19  

3.6

  Financial Statements      20  

3.7

  Absence of Certain Changes      21  

3.8

  Undisclosed Liabilities      21  

3.9

  Books, Records and Filings      21  

3.10

  Tax Matters      22  

3.11

  Assets      26  

3.12

  Owned and Leased Real Property      27  

3.13

  Intellectual Property      28  

3.14

  Contracts      34  

3.15

  Litigation      36  

3.16

  Environmental Matters      36  

3.17

  Labor and Employment      37  

3.18

  Employee Benefit Plans      41  

3.19

  Compliance with Laws      45  

3.20

  Unlawful Payments      45  

3.21

  Permits      46  

3.22

  Insurance      46  

3.23

  Customers and Suppliers      46  

 

- i -


3.24

  Certain Business Relationships With Affiliates      46  

3.25

  Accounts Receivable      47  

3.26

  Government Contracts      47  

3.27

  Brokers      47  

3.28

  Powers of Attorney      47  

3.29

  Privacy      47  

Article IV REPRESENTATIONS AND WARRANTIES OF THE BUYER

     49  

4.1

  Organization, Standing and Power      50  

4.2

  Authority; No Conflict; Required Filings and Consents      50  

4.3

  Financial Ability      51  

4.4

  No Additional Representations; Disclaimer      51  

Article V CONDUCT OF BUSINESS

     52  

5.1

  Operation of Business      52  

5.2

  Confidentiality      54  

Article VI ADDITIONAL PRE-CLOSING AGREEMENTS

     54  

6.1

  No Solicitation      54  

6.2

  Access to Information      54  

6.3

  Closing Efforts; Legal Conditions to the Transactions Contemplated by this Agreement; Third-Party Consents      55  

6.4

  Financing Cooperation      56  

6.5

  Public Disclosure      57  

6.6

  Notification of Certain Matters      58  

6.7

  280G Covenant      58  

6.8

  Termination of Qualified Plan and other Benefits      59  

6.9

  Indemnification of Officers and Directors      59  

6.10

  R&W Policy      60  

Article VII CONDITIONS TO CLOSING

     60  

7.1

  Conditions to Obligations of the Buyer      60  

7.2

  Conditions to Obligations of the Company and the Participating Sellers      63  

Article VIII INDEMNIFICATION

     64  

8.1

  Indemnification by the Sellers      64  

8.2

  Indemnification Claims      64  

8.3

  Survival of Representations and Warranties      66  

8.4

  Limitations      67  

8.5

  Release of Escrow Funds      69  

Article IX OTHER POST-CLOSING AGREEMENTS

     70  

9.1

  No Claims      70  

9.2

  Employee Matters      71  

9.3

  Tax Matters      72  

 

- ii -


Article X TERMINATION AND AMENDMENT

     75  

10.1

  Termination      75  

10.2

  Effect of Termination      76  

10.3

  Fees and Expenses      76  

10.4

  Amendment      76  

10.5

  Extension; Waiver      76  

Article XI DEFINITIONS

     77  

Article XII MISCELLANEOUS

     97  

12.1

  Notices      97  

12.2

  Entire Agreement      99  

12.3

  Third-Party Beneficiaries      99  

12.4

  Assignment      99  

12.5

  Severability      99  

12.6

  Counterparts and Signature      100  

12.7

  Interpretation      100  

12.8

  Governing Law      101  

12.9

  Remedies      101  

12.10

  Submission to Jurisdiction      101  

12.11

  Financing Parties      102  

 

- iii -


Exhibits:

 

Exhibit A    Form of Seller Restrictive Covenant Agreement
Exhibit B    Closing Date Allocation Schedule
Exhibit C    Form of Escrow Agreement
Exhibit D    Form of Joinder Agreement
Exhibit E    Form of Option Exercise Agreement
Exhibit F    Form of Stock Transfer Form
Exhibit G    Form of Voting Power of Attorney

Schedules:

 

Schedule 1-A    Initial Participating Sellers
Schedule 1-B    Initial Participating Sellers
Schedule 2    Key Personnel
Schedule 3    Seller Restrictive Covenant Agreement Signatories
Schedule 1.6(a)    Closing Adjustment Items / Form of Closing Adjustment Statement
Schedule 6.10    Terms and Conditions of the R&W Policy
Schedule 7.1(f)    Required Consents
Schedule 7.1(g)    Affiliate Arrangements
Schedule 11    Knowledge Persons

Disclosure Schedule

 

- iv -


EQUITY PURCHASE AGREEMENT

This Equity Purchase Agreement (this “Agreement”) is entered into as of December 9, 2020, by and among TechTarget, Inc., a Delaware corporation (the “Buyer”); BrightTalk Limited, a private company limited by shares incorporated in England (the “Company”); the Persons listed on Schedule 1 under the heading “Participating Sellers” (the “Initial Participating Sellers”); and solely in such Person’s capacity as the Equityholder Representative, Russ Pyle (the “Equityholder Representative”).

RECITALS

1. The Company and its Subsidiaries (each, a “Group Company” and, collectively, the “Group Companies”) are engaged, among other matters, in the business of operating an online platform for customers to create, host and promote webinar and video content to business professionals (the “Business”).

2. The Initial Participating Sellers collectively own all of the issued and outstanding Company Shares as of the date of this Agreement.

3. On the terms and subject to the conditions of this Agreement, the Buyer desires to purchase from the Sellers, and the Sellers will sell to the Buyer, all of the Purchased Interests.

4. Concurrently with the execution of this Agreement, and as a condition to the willingness of the Buyer to enter into this Agreement, each of the employees and other service providers of the Group Companies named on Schedule 2 (collectively, the “Key Personnel”) has accepted an offer of employment or continued employment, or has entered into a consulting arrangement, and has entered into agreements regarding retention, confidentiality, non-competition and/or non-solicitation, with the Buyer or a Group Company, as the case may be, in each case on terms satisfactory to the Buyer and effective upon the Closing (the “Key Personnel Arrangements”).

5. Concurrently with the execution of this Agreement, and as a condition to the willingness of the Buyer to enter into this Agreement, each of the Sellers named on Schedule 3 is executing a confidentiality and restrictive covenant agreement in the form attached hereto as Exhibit A (the “Seller Restrictive Covenant Agreements”).

6. Capitalized terms used in this Agreement shall have the meanings ascribed to them in Article XI.

In consideration of the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows.

Article I

PURCHASE AND SALE

1.1 Purchase and Sale.


(a) At the Closing, upon the terms and subject to the conditions set forth herein, the Buyer shall purchase from each Seller, and each Seller shall severally sell, convey, assign, transfer, and deliver to the Buyer, all of such Seller’s legal and beneficial right, title and interest in, to and under such Purchased Interests, free and clear of all Liens (other than restrictions on transfer under applicable securities Laws), together with all rights attached or occurring thereto at the Closing (including the right to receive all distributions and dividends declared, paid or made, and any redemption proceeds payable, in respect of such Purchased Interests), in exchange for (x) in the case of Company Shares (other than Deferred Shares) its Pro Rata Share of the Aggregate Residual Closing Consideration represented by such Purchased Interests, as set forth on the Closing Date Allocation Schedule and (y) in the case of the Deferred Shares, the Deferred Shares Closing Consideration.

(b) Each of the Participating Sellers hereby waives any and all pre-emption rights or other rights or restrictions on transfer in respect of the Purchased Interests or interests in Company Shares or other Equity Interests to which they may be entitled under the constitution of the Company, any previous constitution of the Company, any shareholders agreement or otherwise, enforcement of or compliance with which may or might restrict, prevent or delay the performance of the provisions of this Agreement and/or of any of the other Transaction Documents. The Participating Sellers hereby terminate, and shall jointly and severally procure the termination of, any and all shareholders agreements relating to the Company and its affairs to which they are parties (including the Shareholders’ Agreement).

1.2 Closing; Actions at the Closing.

(a) [RESERVED].

(b) The Closing shall take place at 10:00 a.m., local time, on the Closing Date at the offices of Macfarlanes LLP, 20 Cursitor Street, EC4A 1LT, London, England, unless another date, place or time is agreed to in writing by the Buyer and the Equityholder Representative. Upon the agreement of the Participating Sellers and the Buyer, the Closing may take place remotely, via electronic exchange of documents.

(c) At the Closing:

(i) the Company and each Participating Seller shall deliver or cause to be delivered to the Buyer the various certificates, instruments and documents required to be delivered to the Buyer set forth in Section 7.1;

(ii) the Buyer shall deliver or cause to be delivered to the Equityholder Representative the various certificates, instruments and documents set forth in Section 7.2;

(iii) the Participating Sellers shall execute and deliver to Buyer, Stock Transfer Forms and a Voting Power of Attorney and deliver Certificates to the Buyer in respect of the Company Shares owned by each Participating Seller (collectively, the “Required Transfer Documents”) in order to effect the sale, conveyance, assignment, transfer and delivery to the Buyer of good and valid title to the Purchased Interests free and clear of all Liens (other than restrictions on transfer under applicable securities Laws);

 

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(iv) the Buyer shall make (or cause to be made) the payments contemplated by Section 1.3(b); and

(v) the Buyer, at its sole discretion, shall not be obliged to complete the purchase of any of the issued and outstanding Company Shares unless the purchase of all of the issued and outstanding Company Shares is completed simultaneously.

1.3 Closing Payment Certificate; Closing Date Payments.

(a) The Company shall deliver to the Buyer: (i) the Closing Payment Certificate; (ii) a pay-off letter, in customary form, duly executed by each holder of Closing Indebtedness for borrowed money (or any guarantee with respect thereto), which such payoff letter shall contain a complete release of all Liens (other than Permitted Liens) on any asset of any Group Company, duly executed by the holder of any such Closing Indebtedness; (iii) final invoices submitted by each Person to whom any Company Transaction Expenses are (or at the Closing will be) owed, with respect to the period through the Closing, in the case of clauses (i) through (iii) immediately foregoing, no later than three (3) Business Days prior to the Closing Date; and (iv) on the Closing Date, a certificate of the Secretary (or other executive officer) of the Company certifying, in such capacity, resolutions duly adopted by the board of directors of the Company providing for the termination and cancellation of all outstanding Company Options in accordance with the terms of the applicable Company Option Plan (other than, for the avoidance of doubt, any In-the-Money Company Options to be exercised contemporaneously with the Closing).

(b) On the Closing Date, the Buyer shall make (or cause to be made) the following payments, in each case in the respective amounts set forth in the Closing Payment Certificate:

(i) to the Paying Agent (a) for distribution to the Sellers, allocated among the Sellers as specified in the Closing Date Allocation Schedule, by wire transfer of immediately available funds, an aggregate amount equal to the portion of the Aggregate Closing Consideration payable pursuant to Section 1.1(a), and (b) for distribution to each Person specified in the Closing Payment Certificate as a recipient of payments in respect of Company Transaction Expenses that remain unpaid as of immediately prior to the Closing, by wire transfer of immediately available funds, the amount payable to such Person as specified in the Closing Payment Certificate;

(ii) to the Escrow Agent, by wire transfer of immediately available funds, the Escrow Amount to be deposited into the Escrow Account and the Adjustment Escrow Amount to be deposited into the Adjustment Escrow Fund;

(iii) to the Company (or one of its Subsidiaries), by wire transfer of immediately available funds, the portion of the Aggregate Closing Consideration payable to the holders of Employee In-the-Money Company Options pursuant to Section 1.9;

(iv) to the Escrow Agent, by wire transfer of immediately available funds, the Equityholder Representative Expense Amount; and

 

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(v) to each holder of the Closing Indebtedness for borrowed money, by wire transfer of immediately available funds, the amount payable to such Person as specified in the Closing Payment Certificate and the applicable payoff letter.

1.4 Escrow.

(a) At the Closing, the Buyer will (in accordance with Section 1.3(b)(ii)) deliver to the Escrow Agent the Escrow Amount and the Adjustment Escrow Amount to be held in escrow pursuant to the Escrow Agreement and to be disbursed in accordance with the terms of this Agreement and the Escrow Agreement. Each of the Escrow Fund and the Adjustment Escrow Fund shall be held by the Escrow Agent and released by the Escrow Agent to the Paying Agent or the Buyer, as applicable, in accordance with the terms of the Escrow Agreement and this Agreement.

(b) Any portion of the Escrow Fund or the Adjustment Escrow Fund that is disbursed pursuant to the Escrow Agreement and this Agreement for the benefit of the Sellers shall be allocated among the Sellers (and disbursed) in accordance with the Closing Date Allocation Schedule (subject to any applicable withholding as provided in Section 1.10).

1.5 Equityholder Representative.

(a) By their execution of this Agreement, a Joinder Agreement and/or an Option Exercise Agreement, the Participating Sellers hereby irrevocably (subject only to Section 1.5(e)) appoint the Equityholder Representative as the representative, attorney-in-fact and agent of the Participating Sellers in connection with the transactions contemplated by this Agreement, the Option Exercise Agreement, the Paying Agent Agreement and the Escrow Agreement or in any other agreement, document, instrument or certificate contemplated hereby or thereby (collectively, the “Transaction Documents”) and in any litigation or arbitration involving any Transaction Document. In connection therewith, the Equityholder Representative is authorized to do or refrain from doing all further acts and things, and to execute all such documents as the Equityholder Representative shall deem necessary or appropriate, and shall have the power and authority to:

(i) act for some or all of the Participating Sellers with regard to all matters pertaining to any Transaction Document;

(ii) act for some or all of the Participating Sellers to transact matters of litigation and arbitration with regard to all matters pertaining to any Transaction Document;

(iii) execute and deliver all amendments, waivers, ancillary agreements, certificates and documents that the Equityholder Representative deems necessary or appropriate in connection with the consummation of the transactions contemplated by the Transaction Documents, including delivering any update to or correction, amendment or modification of the Closing Date Allocation Schedule permitted by Section 1.8(a);

(iv) receive funds, make payments of funds, and give receipts for funds;

 

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(v) do or refrain from doing, on behalf of the Participating Sellers, any further act or deed that the Equityholder Representative deems necessary or appropriate in the Equityholder Representative’s discretion relating to the subject matter of any Transaction Document, in each case as fully and completely as any Participating Seller could do if personally present;

(vi) give and receive all notices required to be given or received by the Equityholder Representative or any Participating Seller under any Transaction Document;

(vii) give any written direction to the Escrow Agent on behalf of the Equityholder Representative or any Participating Seller;

(viii) agree to, negotiate and/or comply with the determination of the Final Closing Adjustment Statement, the Final Closing Adjustment Items and the Final Closing Adjustment pursuant to Section 1.6;

(ix) agree to, negotiate, enter into settlements and compromises and/or comply with any Order with respect to claims for indemnification made by the Buyer under Article VIII; and

(x) receive service of process in connection with any claims under any Transaction Document.

(b) All decisions and actions of the Equityholder Representative on behalf of the Participating Sellers (or any of them) shall be binding upon all Participating Sellers, and no Participating Seller shall have the right to object, dissent, protest or otherwise contest the same.

(c) At the Closing, the Buyer shall deliver the Equityholder Representative Expense Amount to the Escrow Agent, which Equityholder Representative Expense Amount shall be maintained by the Escrow Agent in accordance with the Escrow Agreement. The Equityholder Representative shall not be paid any fee for services to be rendered hereunder but shall be reimbursed for reasonable out-of-pocket expenses incurred in the performance of the Equityholder Representative’s duties (including the reasonable fees and expenses of counsel) under this Agreement from the Equityholder Representative Expense Amount and, if the remaining Equityholder Representative Expense Amount is insufficient to pay such expenses, from the first proceeds from any Future Payments otherwise available for distribution to any Participating Seller. In no event shall the Buyer (or any of their respective Affiliates) be obligated to reimburse the Equityholder Representative for any such expenses. Upon the determination of the Equityholder Representative that retaining any portion of the Equityholder Representative Expense Amount is no longer necessary, the Equityholder Representative shall direct the Escrow Agent to pay the then remaining portion of the Equityholder Representative Expense Amount to the Participating Sellers, allocated among the Participating Sellers in accordance with the Closing Date Allocation Schedule (any such payment, a “Equityholder Representative Account Payment”).

 

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(d) The Equityholder Representative shall act for the Participating Sellers on all of the matters set forth in any Transaction Document in the manner the Equityholder Representative believes to be in the collective best interest of the Participating Sellers. The Equityholder Representative is authorized to act on behalf of the Participating Sellers notwithstanding any dispute or disagreement among any of them. In taking any action as Equityholder Representative, the Equityholder Representative may rely conclusively, without any further inquiry or investigation, upon any certification or confirmation, oral or written, given by any Person whom the Equityholder Representative reasonably believes to be authorized thereunto. The Equityholder Representative may, in all questions arising hereunder, rely on the advice of counsel, and the Equityholder Representative shall not be liable to any Participating Seller for anything done, omitted or suffered in good faith by the Equityholder Representative based on such advice. The Equityholder Representative undertakes to perform such duties and only such duties as are specifically set forth in this Agreement and no implied covenants or obligations shall be read into this Agreement against the Equityholder Representative. The Equityholder Representative shall not have any liability to any of the Participating Sellers for any act done or omitted hereunder as Equityholder Representative while acting in good faith. The Equityholder Representative shall be indemnified by the Participating Sellers from and against any loss, liability or expense incurred in good faith on the part of the Equityholder Representative and arising out of or in connection with the acceptance or administration of the Equityholder Representative’s duties hereunder. Any such claim for indemnification shall be satisfied first from any then available portion of the remaining Equityholder Representative Expense Amount and, if such amount is insufficient to satisfy any such loss, liability or expense, from the first proceeds from any Future Payments otherwise available for distribution to any Participating Seller or by a claim against the Participating Sellers.

(e) In the event the Equityholder Representative becomes unable to perform the Equityholder Representative’s responsibilities hereunder or resigns from such position, the Participating Sellers (acting by a written instrument signed by Participating Sellers who held, as of immediately prior to the Closing, a majority of the Purchased Interests) shall select another representative to fill the vacancy of the Equityholder Representative, and such substituted representative shall be deemed to be the Equityholder Representative for all purposes of this Agreement, and such appointment shall be binding on all Participating Sellers. The Equityholder Representative may be removed only upon delivery of written notice to the Buyer signed by Participating Sellers who, as of immediately prior to the Closing, held a majority of the Purchased Interests; provided that no such removal shall be effective until such time as a successor Equityholder Representative shall have been validly appointed hereunder. The Equityholder Representative shall provide the Buyer prompt written notice of any replacement of the Equityholder Representative, including the identity and address of the new Equityholder Representative. Upon any replacement of the Equityholder Representative, the Equityholder Representative being replaced shall transfer to the new Equityholder Representative the balance of any unexpended Equityholder Representative Expense Amount.

(f) For all purposes of this Agreement:

(i) the Buyer shall be entitled to rely conclusively on the instructions and decisions of the Equityholder Representative as to the settlement of any disputes or claims between the Buyer and the Participating Sellers under the Transaction Documents, or any other actions required or permitted to be taken by the Equityholder Representative hereunder or thereunder, and no Participating Seller shall have any cause of action against the Buyer for any action taken by the Buyer in reliance upon the instructions or decisions of the Equityholder Representative;

 

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(ii) the provisions of this Section 1.5 are independent and severable, are irrevocable (subject only to Section 1.5(e)) and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Participating Seller may have in connection with the transactions contemplated by this Agreement; and

(iii) the provisions of this Section 1.5 shall be binding upon the executors, heirs, legal representatives, personal representatives, successor trustees and successors of each Participating Seller, and any references in this Agreement to a Participating Seller shall mean and include the successors to the rights of such Participating Seller hereunder, whether pursuant to testamentary disposition, the Laws of descent and distribution or otherwise.

1.6 Adjustment Before and After the Closing.

(a) The Estimated Closing Adjustment and the Final Closing Adjustment shall be determined as set forth below in this Section 1.6: Not later than three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Buyer a statement in the form of the Closing Adjustment Statement (the “Estimated Closing Adjustment Statement”) setting forth the Company’s good faith and reasonable estimate of Estimated Closing Adjustment, including an estimated consolidated balance sheet of the Group Companies as of 11:59 PM Eastern time on the day immediately prior to the Closing Date, together with relevant backup materials reasonably requested by Buyer. The Estimated Closing Adjustment Statement and such consolidated balance sheet shall be prepared in accordance with the Accounting Principles. From the delivery of the Estimated Closing Adjustment Statement, the Buyer and its accountants shall, upon reasonable notice and during normal business hours, be permitted to discuss with representatives of the Group Companies and their accountants the Estimated Closing Adjustment Statement and shall be provided copies of, and have reasonable access, upon reasonable notice at reasonable times during normal business hours, to the work papers and supporting records of the Group Companies to the extent reasonably necessary to allow the Buyer and its accountants to verify the accuracy of the Estimated Closing Adjustment Statement; provided, however, that the foregoing right of access shall not require furnishing information that, (i) in the reasonable opinion of counsel, would violate any Law or result in the waiver of any attorney-client privilege, work product doctrine or other applicable privilege applicable to such documents or information that cannot be preserved with a customary common interest or similar agreement, or (ii) would violate or cause a default under, or give a third party the right to terminate or accelerate the rights under, any Contract in effect as of the date hereof. The Company will consider, in good faith, any reasonable comments to the Estimated Closing Adjustment Statement made by Buyer in good faith. The Estimated Closing Adjustment Statement, as proposed by the Company pursuant to Section 1.6(a), shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Statement,” the Estimated Closing Adjustment items reflected thereon shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Items” and each shall be final and binding on the Buyer and the Sellers, unless the Buyer timely delivers to Equityholder Representative the Closing Adjustment Statement in accordance with Section 1.6(b).

 

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(b) Not later than thirty (30) calendar days after the Closing Date, the Buyer shall deliver to the Equityholder Representative the Closing Adjustment Statement, including a consolidated balance sheet of the Group Companies as of 11:59 PM Eastern time on the day immediately prior to the Closing Date. The Closing Adjustment Statement and such consolidated balance sheet shall be prepared in accordance with the Accounting Principles. The Closing Adjustment Statement delivered pursuant to this Section 1.6(b) shall be accompanied by a statement setting forth the amount, if any, by which the total of the Closing Adjustment Items is greater than, or less than, the Estimated Closing Adjustment. The Closing Adjustment Statement, as proposed by Buyer pursuant to this Section 1.6(b), shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Statement,” the Closing Adjustment Items reflected thereon shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Items” and each shall be final and binding on the Buyer and the Sellers, unless the Equityholder Representative timely delivers to the Buyer an Objection Notice in accordance with Section 1.6(c).

(c) In the event that the Equityholder Representative disputes the Closing Adjustment Statement or the amount of the Closing Adjustment Items, the Equityholder Representative shall notify the Buyer in writing (the “Objection Notice”) of the amount, nature and basis of such dispute, within thirty (30) calendar days after delivery of the Closing Adjustment Statement pursuant to Section 1.6(b). Any such Objection Notice shall specify those items or amounts as to which the Equityholder Representative disagrees, and the Equityholder Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Adjustment Statement and the amount of the other Closing Adjustment Items delivered pursuant to Section 1.6(b). In the event of such a dispute, the Buyer and the Equityholder Representative shall first negotiate in good faith to reach agreement on the disputed items or amounts in order to determine the amount of the Closing Adjustment Items, which amount shall not be more than the Buyer’s calculation delivered pursuant to Section 1.6(b) nor less than the Equityholder Representative’s calculation delivered pursuant to this Section 1.6(c). If the Buyer and the Equityholder Representative reach a final resolution on the Closing Adjustment Statement within thirty (30) calendar days after the Buyer’s receipt of the Objection Notice (or within any additional period as mutually agreed to between the Buyer and the Equityholder Representative), then the Closing Adjustment Statement agreed upon by the Buyer and the Equityholder Representative shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Statement,” the Closing Adjustment Items reflected thereon shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Items” and each shall be final and binding on the Buyer and the Sellers.

(d) If the Buyer and the Equityholder Representative are unable to resolve the dispute within thirty (30) calendar days after delivery of the Objection Notice, then any remaining items in dispute shall be submitted to an independent nationally recognized accounting firm selected in accordance with the rules of the Boston, Massachusetts office of the American Arbitration Association (the “Neutral Accountant”). All determinations and calculations pursuant to this Section 1.6(d) shall consider only those Closing Adjustment Items that are set forth in the Objection Notice and remain in dispute, shall be a value that is not more than the Buyer’s calculation delivered pursuant to Section 1.6(b) nor less than the Equityholder Representative’s calculation delivered pursuant to Section 1.6(c), shall be in writing and shall be delivered to the Buyer and the Equityholder Representative as promptly as practicable. Absent fraud or manifest

 

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error, the Closing Adjustment Statement as finally determined by the Neutral Accountant shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Statement,” the Closing Adjustment Items reflected thereon shall be deemed for purposes of this Section 1.6 to be the “Final Closing Adjustment Items” and each shall be final and binding on the Buyer and the Sellers. In determining the Closing Adjustment Statement and the Closing Adjustment Items, the Neutral Accountant shall act as an expert and not as arbitrator. A judgment on the determination made by the Neutral Accountant pursuant to this Section 1.6 may be entered in and enforced by any court having jurisdiction thereover.

(e) The fees and expenses of the Neutral Accountant in connection with the resolution of disputes pursuant to Section 1.6(d) shall be borne by the Participating Sellers, on the one hand, and the Buyer, on the other hand, in proportion to the aggregate amounts by which the proposals of the Buyer and the Equityholder Representative differed from the Neutral Accountant’s final determination.

(f) The “Final Closing Adjustment” shall be equal to (i) the amount of the Final Closing Adjustment Items, minus (ii) the Estimated Closing Adjustment. For the avoidance of doubt, the Final Closing Adjustment may be a positive or negative number. If the Final Closing Adjustment is greater than zero (0), then the Buyer shall be entitled to receive payment of the Final Closing Adjustment from the Adjustment Escrow Fund promptly (and in no event later than two (2) Business Days) after the date of determination of the Final Closing Adjustment and the Equityholder Representative and the Buyer shall deliver a joint instruction letter to the Escrow Agent under the Escrow Agreement instructing the Escrow Agent to disburse (i) to the Buyer from the Adjustment Escrow Fund an amount in cash equal to the lesser of (A) the amount of the Final Closing Adjustment and (B) the amount of the Adjustment Escrow Fund, and (ii) to the Paying Agent for distribution to the Sellers in accordance with this Agreement, any portion of the Adjustment Escrow Fund remaining after giving effect to the payment contemplated by the immediately foregoing clause (i). If the Final Closing Adjustment is less than zero (0), then promptly (and in no event later than two (2) Business Days) after the date of determination of the Final Closing Adjustment, the Buyer shall pay the Final Closing Adjustment to the Paying Agent and the Equityholder Representative and the Buyer shall deliver a joint instruction letter to the Escrow Agent under the Escrow Agreement instructing the Escrow Agent to disburse to the Paying Agent the Adjustment Escrow Fund, in each case for distribution to the Sellers in accordance with this Agreement.

(g) From the delivery of the Closing Adjustment Statement until such time as the calculation of the Final Closing Adjustment has been finally determined pursuant to this Section 1.6, the Equityholder Representative and its accountants (at the Equityholder Representative’s expense) shall, upon reasonable notice and during normal business hours, be permitted to discuss with the Buyer and its accountants the Closing Adjustment Statement and shall be provided complete and accurate copies of, and have reasonable access, upon reasonable notice at reasonable times during normal business hours, to the work papers and supporting records of the Buyer and its accountants so as to allow the Equityholder Representative and its accountants to verify the accuracy of the Closing Adjustment Statement.

 

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(h) The parties agree that the procedures set forth in this Section 1.6 shall be the sole and exclusive method for resolving any disputes with respect to the determination of the Final Closing Adjustment Statement, the Final Closing Adjustment Items and the Final Closing Adjustment; provided, that this provision shall not prohibit the Buyer or the Equityholder Representative from instituting litigation or arbitration to enforce the determination of the Neutral Accountant and shall not limit any remedy of any party under Article VIII.

1.7 Closing Date Allocation Schedule; Payment of Future Payments.

(a) The Company shall deliver to the Buyer and the Paying Agent, at least three (3) Business Days prior to the Closing, the Closing Date Allocation Schedule (attached as an exhibit to the Closing Payment Certificate). From time to time after the Closing Date, the Equityholder Representative may, with the written agreement of the Buyer, update, correct or otherwise amend or modify the Closing Date Allocation Schedule in any manner that is consistent with the express provisions of this Article I. The Buyer shall be entitled to rely conclusively on the Closing Date Allocation Schedule as in effect from time to time, and, as between the Sellers, on the one hand, and the Buyer, on the other hand, any amounts delivered by the Buyer to any Seller in accordance with the Closing Date Allocation Schedule in effect from time to time (or to the Paying Agent for the benefit of such Seller) shall be deemed for all purposes to have been delivered to the applicable Seller in full satisfaction of the obligations of the Buyer under this Article I.

(b) Any Future Payment that becomes payable by the Buyer to the Sellers under this Agreement and/or the Escrow Agreement shall be paid to the Paying Agent for distribution to the Sellers, allocated among the Sellers in accordance with the Closing Date Allocation Schedule (subject to any applicable withholding as provided in Section 1.10).

(c) The parties understand and agree that (i) the Sellers shall have rights only as a creditor of the Buyer as a result of their right to receive the Future Payments and not as a security holder of the Buyer, (ii) without limiting the generality of Section 12.4, no right to receive any Future Payment may be assigned or otherwise transferred without the prior written consent of the Buyer and any purported assignment or transfer in the absence of such consent shall be null and void ab initio, and (iii) no interest is payable as additional consideration with respect to any of the Future Payments, except in the case of Future Payment not timely made and any amounts thereof not otherwise disputed in good faith, in which case interest shall accrue from the due date of such Future Payment at a per annum rate equal to the rate of interest from time to time announced publicly by The Wall Street Journal as its prime rate (the “Interest Rate”), calculated on the basis of a year of 365 days and the number of days elapsed.

1.8 Payment Fund. The procedures for the purchase and sale of the Purchased Interests in connection with the transactions contemplated by this Agreement are as follows:

(a) Paying Agent. At or prior to the Closing, the Buyer shall (in accordance with Section 1.3(b)(i)) deposit the Payment Fund with the Paying Agent for payment to the Sellers in accordance with this Section 1.8 and the Closing Date Allocation Schedule. The Paying Agent shall, pursuant to instructions from the Buyer in accordance with the Paying Agent Agreement and the Closing Date Allocation Schedule, deliver out of the Payment Fund the portion of the Aggregate Closing Consideration payable to the Sellers. The Payment Fund shall not be invested by the Paying Agent and shall not be used for any purpose other than as specified in this Section 1.8(a).

 

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(b) Exchange Procedures. At or prior to the Closing, each Participating Seller shall deliver, or the Company shall deliver on a Participating Seller’s behalf, to the Buyer the Required Transfer Documents. The transfer of the Purchased Interests by the Sellers to the Buyer shall be deemed to occur as of the opening of business on the Closing Date. Upon proper delivery of the Required Transfer Documents each Seller shall be entitled to receive in exchange therefor cash in an amount equal to the portion of the Aggregate Closing Consideration payable in respect of the Purchased Interests represented by such Required Transfer Documents, as reflected on the Closing Date Allocation Schedule attached to the Closing Payment Certificate (subject to any applicable withholding as provided in Section 1.10). The Sellers shall not be entitled to receive any portion of the Aggregate Consideration to which they would otherwise be entitled with respect to any Company Shares until duly executed Required Transfer Documents in favor of the Buyer in respect of such Company Shares are properly delivered.

(c) Termination of Payment Fund. Any amount deposited with the Paying Agent that remains undistributed to the Participating Sellers until six (6) months after the Closing shall be delivered to the Buyer to be held in trust for the relevant Seller upon demand, and any Seller who is entitled to such amount under this Section 1.8 shall (subject to Section 1.5(d)) be entitled to demand payment of such amount from the Buyer only as a general creditor, subject to delivery of the Required Transfer Documents.

(d) No Liability. To the extent permitted by applicable Law, none of the Buyer, any Group Company or the Paying Agent shall be liable to any Seller for any amount delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any of the Purchased Interests shall not have been exchanged pursuant to Section 1.8(b) prior to the time at which the related consideration payable pursuant to this Article I would otherwise escheat to or become the property of any Governmental Entity, any such consideration in respect thereof shall, to the extent permitted by applicable Law, become the property of the Buyer, free and clear of all claims or interest of any Person previously entitled thereto.

1.9 Company Options. Prior to the Closing Date, the board of directors of the Company shall adopt such resolutions, and the Company shall take such other actions, as are necessary to effect the following (each to be effective immediately prior to and contingent upon the Closing):

(a) Subject to Section 1.9(f), each In-the-Money Company Option that is vested and remains outstanding as of immediately prior to the Closing (after giving effect to any exercises thereof to occur simultaneously with the Closing) shall be automatically cancelled and exchanged for the right to receive an amount in cash, in the manner set forth in Section 1.9(c), equal to (A) the Pro Rata Share of the Aggregate Residual Closing Consideration, less the aggregate exercise price of such In-the-Money Company Option, plus (B) the Pro Rata Share of the portion of all Future Payments that become payable pursuant to the terms of this Agreement with respect to such In-the-Money Company Option, in each case subject to withholding as provided in Section 1.10.

 

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(b) Upon the exercise or cancellation, as applicable, of any In-the-Money Company Option pursuant to this Section 1.9, such In-the-Money Company Option shall no longer represent the right to acquire any Company Shares or other Equity Interests, but shall entitle the holder thereof to receive only the consideration payable in respect thereof pursuant to this Section 1.9.

(c) The Buyer shall cause the Company to pay (following receipt of such funds pursuant to Section 1.3(b)(iii)) as promptly as practicable after the Closing Date to each holder of an Employee In-the-Money Company Option the portion of the Aggregate Residual Closing Consideration payable to such holder pursuant to this Section 1.9 (subject to any applicable withholding as provided in Section 1.10) in accordance with the Closing Date Allocation Schedule. The Buyer shall cause the Company to pay (following receipt of such funds pursuant to Section1.7(b)) to each holder of an Employee In-the-Money Company Option any amounts payable with respect to each Future Payment (subject to any applicable withholding as provided in Section 1.10) in accordance with the Closing Date Allocation Schedule.

(d) The Buyer shall direct the Paying Agent to pay (following receipt of such funds pursuant to Section 1.3(b)(i)) as promptly as practicable after the Closing Date to each holder of a Non-Employee In-the-Money Company Option the portion of the Aggregate Residual Closing Consideration payable to such holder pursuant to this Section 1.9 (subject to any applicable withholding as provided in Section 1.10) in accordance with the Closing Date Allocation Schedule. The Buyer shall direct the Paying Agent to pay (following receipt of such funds pursuant to Section 1.7(b)) to each holder of a Non-Employee In-the-Money Company Option any amounts payable with respect to each Future Payment (subject to any applicable withholding as provided in Section 1.10) in accordance with the Closing Date Allocation Schedule.

(e) On or prior to the Closing Date, the Company shall cause each Company Option that is not an In-the-Money Company Option to be terminated and cancelled without payment of consideration.

(f) The Company shall obtain from the holder of each In-the-Money Company EMI Option that is then outstanding (whether such In-the-Money Company EMI Option is vested or unvested, but not to the extent it has theretofore been exercised) an executed Option Exercise Agreement pursuant to which such holder shall agree (i) to exercise, to the extent vested, all of such holder’s In-the-Money Company EMI Options; (ii) become party to this Agreement and become a “Participating Seller” within the meaning thereof; (iii) to be issued the number of Company Shares in relation to the vested In-the-Money Company EMI Options (“Company EMI Shares”); provided, however, that notwithstanding anything to the contrary herein, no portion of the Aggregate Consideration shall be payable to any holder of any such In-the-Money Company EMI Option unless and until such holder shall have executed and delivered to the Buyer an Option Exercise Agreement. To the extent that the In-the-Money Company EMI Options are exercised and Company EMI Shares are issued, then the In-the-Money Company EMI Options shall not be included in the definition of In-the-Money Company Options for the purposes of Sections 1.9(a) through 1.9(d).

 

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1.10 Withholding Rights. Each of the Buyer, the Paying Agent and the Escrow Agent will, to the extent applicable, be entitled to deduct and withhold from the amounts otherwise payable by it pursuant to this Agreement to any Person, including payments made under the Escrow Agreement, such amounts as it reasonably determines that it is required to deduct and withhold with respect to the making of such payment under the Code or any other applicable Law, and to collect any necessary Tax forms, or such other forms or similar information as may be applicable, from any Seller and any other recipients of payments hereunder. In the event that any amount is so deducted and withheld, and properly remitted, such amount will be treated for all purposes of this Agreement as having been paid to the Person to whom the payment from which such amount was withheld was made.

1.11 Further Assurances. At any time and from time to time after the Closing, at the Buyer’s request and without further consideration, each of the Participating Sellers shall promptly execute and deliver (or cause to be executed and delivered) such instruments of sale, transfer, conveyance, assignment and confirmation, and take all such other action as the Buyer may reasonably request, more effectively to transfer, convey and assign to the Buyer, and to confirm the Buyer’s title to, such Participating Seller’s Purchased Interests, to put the Buyer in actual possession and operating control of the assets, Properties and Business of the Group Companies, to assist the Buyer in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement.

Article II

REPRESENTATIONS AND WARRANTIES

REGARDING THE SELLERS

Each Seller represents and warrants to the Buyer that (solely with respect to such Seller), except as set forth in the Disclosure Schedule, the statements contained in this Article II are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedule shall be arranged in sections and paragraphs corresponding to the numbered and lettered sections and paragraphs contained in this Article II and in Article III. The disclosures in any section or paragraph of the Disclosure Schedule shall qualify only (a) the corresponding section or paragraph in this Article II or Article III, as the case may be, and (b) other sections or paragraphs in this Article II or Article III to the extent that it is reasonably apparent from a reading of the disclosure that such disclosure also qualifies or applies to such other section or paragraph.

2.1 Legal Capacity.

(a) Such Seller has all requisite power and capacity to execute and deliver this Agreement and each other Transaction Document to which such Seller is or will be a party and to perform such Seller’s obligations hereunder and thereunder. This Agreement has been, and each other Transaction Document to which such Seller is or will be a party has been or, in the case of the other Transaction Documents if applicable, will be as of the Closing Date, duly and validly executed and delivered by such Seller and constitutes or will constitute a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms.

 

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(b) Subject to compliance with the HSR Act and subject to the submission of the transfers of the Company Shares to HMRC for stamping, neither the execution and delivery by such Seller of this Agreement or any other Transaction Document to which such Seller is or will be a party, nor the performance by such Seller of its obligations hereunder or thereunder, nor the consummation by such Seller of the transactions contemplated hereby or thereby, will (i) require on the part of such Seller any notice to or filing with any Governmental Entity or any Permit, (ii) if such Seller is not a natural Person, conflict with or violate any provision of the Organizational Documents of such Seller, each as amended or restated to date, (iii) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any Contract, Permit or Lien to which such Seller is a party or by which such Seller is bound or to which any of the assets of such Seller is subject, (iv) result in the imposition of any Lien upon any assets of such Seller or (v) violate any Order or Law applicable to such Seller or any of its Properties or assets, except in each case of the immediately foregoing clauses (ii), (iii) and (iv) as could not reasonably be expected to have a material adverse effect on such Seller’s ability to timely consummate the transactions contemplated by the Transaction Documents.

(c) Subject to compliance with the HSR Act, no Permit or Order of, or declaration, notice or filing with, any Governmental Entity is required by or with respect to such Seller in connection with the execution and delivery of this Agreement by such Seller or the consummation by such Seller of the transactions contemplated by the Transaction Documents. Section 2.1(c) of the Disclosure Schedule sets forth a true, correct and complete list of all consents and approvals of third parties and Governmental Entities, and all filings and notices, that are required in connection with the consummation by such Seller of the transactions contemplated by the Transaction Documents.

(d) As of the date of this Agreement, there is no Legal Proceeding which is pending or has been threatened in writing against such Seller that questions the validity of this Agreement or any action taken or to be taken by such Seller in connection herewith or that could reasonably be expected to have a material adverse effect on such Seller’s ability to consummate the transactions contemplated by the Transaction Documents.

(e) Such Seller does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement or any other Transaction Document.

2.2 Ownership of Equity Interests in the Company. Such Seller holds the legal and beneficial ownership of all of the Equity Interests in the Company as set forth on Section 3.2(b) of the Disclosure Schedule as being owned by such Seller, free and clear of any Liens (other than restrictions on transfer arising under applicable securities Laws). Such Seller is not a party to any voting trust, proxy, or other Contract with respect to the voting or transfer of any Equity Interests of the Company. Upon consummation of the purchase contemplated hereby, the Buyer will acquire from such Seller good, valid and marketable title to all Purchased Interests owned by such Seller, free and clear of all Liens (other than restrictions on transfer arising under applicable securities Laws).

 

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Article III

REPRESENTATIONS AND WARRANTIES REGARDING THE GROUP COMPANIES

The Participating Sellers represent and warrant, severally and not jointly, to the Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article III are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date).

3.1 Organization, Standing and Corporate Power. Each Group Company is a company or other legal entity duly organized, validly existing and, where applicable as a legal concept, in good standing under the Laws of its jurisdiction of organization. Each Group Company is duly qualified to conduct business and, where applicable as a legal concept, is in good standing under the Laws of each jurisdiction in which the nature of such Group Company’s Businesses or the ownership or leasing of its assets or Properties requires such qualification, except for such failures to be so qualified or in good standing that, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Company Material Adverse Effect. Each Group Company has all requisite corporate (or similar) power and authority to carry on the businesses in which it is engaged and to own and use the assets and Properties owned and used by it. Each Group Company has made available to the Buyer complete and accurate copies of its Organizational Documents. No Group Company is in default under or in violation of any provision of its Organizational Documents.

3.2 Capitalization.

(a) A complete and accurate description of the capitalization of each Group Company as of the date of this Agreement is set forth in Section 3.2(a) of the Disclosure Schedule.

(b) Section 3.2(b) of the Disclosure Schedule sets forth a complete and accurate list of the holders of Equity Interests of the Company, showing the number and type of Equity Interests held by each Seller. All of the issued and outstanding Equity Interests of the Company have been and on the Closing Date will be duly authorized, validly issued, fully paid, and free and clear of all preemptive rights and Liens (other than the restrictions on transfer imposed by the Organizational Documents or applicable securities Laws). All of the issued and outstanding Equity Interests of the Company have been offered, issued and sold by the Company in compliance in all material respects with all applicable Laws. The Participating Sellers hold the entire legal and beneficial ownership of the issued and outstanding Company Shares.

 

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(c) Section 3.2(c) of the Disclosure Schedule sets forth a complete and accurate list, as of the date of this Agreement, of: (i) each Company Option Plan, indicating the number of Company Shares issued to date under such Company Option Plan, the number of Company Shares subject to outstanding options (whether vested or unvested) under such Company Option Plan and the number of Company Shares reserved for future issuance under such Company Option Plan, and (ii) all holders of outstanding vested and unvested Company Options, indicating with respect to each Company Option and the Company Option Plan, the number of Company Shares subject to such Company Option, the exercise price (as applicable), the vesting schedule (including any acceleration provisions with respect thereto and the Grant Date) as applicable. The Company has made available to the Buyer complete and accurate copies of each Company Option Plan, and forms of all share option agreements evidencing Company Options. All of the Company Shares subject to Company Options will be, upon issuance pursuant to the exercise of, and in accordance with the terms of, such instruments, duly authorized, validly issued, fully paid and free and clear of all preemptive rights and Liens (other than the restrictions on transfer imposed by the Organizational Documents or applicable securities Laws).

(d) With respect to each Company Option (whether outstanding or previously exercised), (i) each such Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and qualified upon any exercise, (ii) each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the Company’s board of directors (or a duly constituted and authorized committee thereof), or a duly authorized delegate thereof, and any required stockholder approval by the necessary number of votes or written consents and reflected in a timely manner on applicable award agreements, (iii) each such grant was made in material compliance with the terms of the applicable Company Option Plan, the Securities Act, the Exchange Act, to the extent applicable, and all other applicable Laws and no such grant is or has been the subject of any internal investigation, review or inquiry, and (iv) each such grant was properly accounted for in accordance with the Accounting Standards in the financial statements (including the related notes) of the Company. The Group Companies have not granted or promised any stock options since May 20, 2020, and there are no outstanding promises to grant stock options or equity compensation of the Company. The treatment of Company Options pursuant to this Agreement complies with the terms of the applicable Company Option Plan, the applicable award agreements, and applicable Law, and any consents required to comply with Section 1.9 have been received or will be received before the Closing.

(e) With respect to the EMI Options (whether vested or unvested and whether outstanding or previously exercised), (i) each EMI Option is a qualifying option within the meaning of Section 527(4) ITEPA and has been notified to an officer of HMRC in accordance with the provisions of Part 7 of Schedule 5 of ITEPA, (ii) each EMI Option entitles the relevant holder of the EMI Options to acquire Company Shares at a price not less than their market value at the time of the grant of the relevant EMI Option, (iii) no disqualifying event, within the meaning of Section 533 of ITEPA, has occurred prior to Closing in relation to a EMI Option, other than in the case of the relevant holder of a EMI Option having left employment, (iv) no non-routine notice, investigation or penalty relating to the Company Option Plans have been issued, imposed, made or threatened by HMRC and there are no circumstances which are likely to give rise to any such non-routine notice, investigation or penalty; and (v) each EMI Option has at all times been granted, operated and exercised in accordance with Schedule 5 to ITEPA.

 

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(f) Except as set forth in Section 3.2(b) of the Disclosure Schedule, (i) there are no Equity Interests of any class of the Company, or any security exchangeable into or exercisable for such Equity Interests, issued, reserved for issuance or outstanding, (ii) there are no options, awards, arrangements, warrants, equity securities, calls, rights, commitments or Contracts to which the Company is a party or by which the Company is bound obligating the Company to issue, exchange, transfer, deliver or sell, or cause to be issued, exchanged, transferred, delivered or sold, additional Equity Interests of the Company or any security or rights convertible into or exchangeable or exercisable for any such Equity Interests, or obligating the Company to grant, extend, otherwise modify or amend or enter into any such option, award, arrangement, warrant, Equity Interest, call, right, commitment or Contract, (iii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, award, convertible security or other such right, or to issue or distribute to holders of any Equity Interests of the Company any evidences of Indebtedness or assets of the Company, and (iv) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any Equity Interests or to pay any dividend or to make any other distribution in respect thereof. Without limitation of the foregoing clause (iv), effective as of the Closing, any notice of redemption delivered by any holder of Company Shares (including the redemption notice from NBGE AIV BT, L.P. dated as of April 28, 2020) has been revoked and no Group Company has any liability or obligation thereunder or arising therefrom. Except as set forth in this Section 3.2, the Company has no outstanding equity compensation or equity-based compensation.

(g) Other than the Organizational Documents and the Shareholders’ Agreement, there is no Contract between any Group Company, or, to the Companies’ Knowledge, among any holders of its Equity Interests or other securities (as applicable) relating to the sale or transfer (including Contracts relating to rights of first refusal, co-sale rights or “drag along” rights), registration under the Securities Act or the securities Laws of any other jurisdiction, or voting, of the Equity Interests of any such Group Company.

(h) The Closing Date Allocation Schedule will set forth a true, correct and complete summary of the allocation of the amounts payable to the Sellers (and the holders of In-the-Money Company Options) pursuant to this Agreement and the Company Option Plans. The allocation of payments set forth on the Closing Date Allocation Schedule will comply with the terms of the Organizational Documents of each Group Company and this Agreement.

(i) Upon consummation of the purchase contemplated hereby, the Buyer will acquire from the Sellers good, valid and marketable title to all Purchased Interests, free and clear of all Liens (other than restrictions on transfer arising under applicable securities Laws).

3.3 Subsidiaries.

(a) Section 3.3 of the Disclosure Schedule sets forth: (i) the name of each Group Company; (ii) the number and type of issued and outstanding equity securities of each Group Company and a list of the holders thereof; (iii) the jurisdiction of organization of each Group Company; (iv) the names of the officers and directors of each Group Company; and (v) the jurisdictions in which each Group Company is qualified or holds licenses to do business as a foreign corporation or other entity. The Company (or one of the Subsidiaries) is the legal and

 

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beneficial owner of all issued and outstanding equity securities of each Group Company (except to the extent of any beneficial interest of a Seller in the outstanding equity securities of a Group Company arising solely by virtue of such Seller’s ownership of Company Shares and/or Company Options).

(b) All of the issued and outstanding shares of each Group Company (other than the Company) are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. All shares of each Group Company (other than the Company) that are held or owned by either the Company or any other Group Company are held or owned free and clear of any restrictions on transfer (other than restrictions under applicable securities Laws), claims, Liens, options, warrants, rights, contracts, calls, commitments, equities and demands. There are no outstanding and/or authorized options, warrants, rights, agreements or commitments to which the Company or any other Group Company is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any shares of any Group Company (other than the Company). There are no voting trusts, proxies or other agreements or understandings with respect to the voting of any shares of any Group Company (other than the Company).

(c) The Company does not own or control directly or indirectly or have any direct or indirect equity participation or similar interest in, or any obligation to provide funding to, any corporation, partnership, limited liability company, joint venture, trust or other business association or entity that is not a Subsidiary.

3.4 Authority; No Conflict; Required Filings and Consents.

(a) Each Group Company has all requisite power and authority (corporate and other) to execute and deliver this Agreement and the other agreements contemplated hereby to which such Group Company is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery by each Group Company of this Agreement and each other Transaction Document to which such Group Company is or will be a party has been, and the performance by each Group Company of this Agreement and the consummation by each Group Company of the transactions contemplated hereby and thereby have been, duly and validly authorized by all necessary corporate and other action on the part of the Group Companies and the Sellers. This Agreement has been, and each other Transaction Document to which such Group Company is a party has been or will be as of the Closing Date, duly and validly executed and delivered by each Group Company and constitutes or will constitute a valid and binding obligation of each Group Company, enforceable against it in accordance with its terms except as may be limited by the following (collectively, the “Enforceability Exceptions”): (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) Laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(b) Subject to compliance with the HSR Act, neither the execution and delivery by any Group Company of this Agreement or any other Transaction Document to which it is a party, nor the performance by any Group Company of its obligations hereunder or thereunder, nor the consummation by any Group Company of the transactions contemplated hereby or thereby, will (i) require on the part of any Group Company any notice to or filing with, or any Permit of,

 

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any Governmental Entity, except for any filings and notices required by applicable securities Laws or any filing for which the Buyer is responsible; (ii) conflict with or violate any provision of the Organizational Documents of any Group Company, each as amended or restated to date, (iii) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any Material Contract, Permit or Lien to which any Group Company is a party, (iv) result in the imposition of any Lien (other than a Permitted Lien) upon any assets of any Group Company or (v) violate any Order or Law applicable to any Group Company or any of its Properties or assets, except in the case of foregoing clauses (i), (iii) and (vi) for such conflicts, breaches, defaults, accelerations, terminations, modifications, cancellations, requirements, Liens or violations that, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in the loss of any material rights or obligations, or the creation of any material liability or obligation, on the part of any Group Company.

(c) Except as set forth in Section 3.4(c) of the Disclosure Schedule, and subject to compliance with the HSR Act, no Permit or Order of, or declaration, notice or filing with, any Governmental Entity is required by or with respect to any Group Company in connection with the execution and delivery of this Agreement by any Group Company or the consummation by each Group Company of the transactions contemplated by the Transaction Documents save for any filing for which the Buyer is responsible.

3.5 Solvency.

(a) No Order has been made and no resolution has been passed for the winding up of any Group Company or for a provisional liquidator or manager to be appointed in respect of any Group Company and no petition has been presented and no meeting has been convened for the purpose of considering the winding up of any Group Company.

(b) No administration Order has been made and no petition for such an Order has been presented in respect of any Group Company.

(c) No receiver, administrator or manager (which expression shall include an administrative receiver) has been appointed in respect of all or any of the assets of any Group Company, nor has any power of sale or power to appoint a receiver, administrator or manager under the terms of any mortgage, charge or other security in respect of all or any assets of the Company become exercisable.

(d) No Group Company is or has admitted itself to be insolvent or unable to pay its debts as they fall due, nor has it failed to pay its debts when due (otherwise than by reason of a bona fide dispute as to their amount or enforceability), nor is any Group Company unable to pay its debts within the meaning of s.123 UK Insolvency Act 1986.

(e) No statutory demand has been served on any Group Company which has not been paid in full or been withdrawn.

 

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(f) No Group Company has been a party to any transaction at an undervalue as defined in s.238 UK Insolvency Act 1986 nor has it given or received any preference as defined in s.239 UK Insolvency Act 1986, in either case within the period of two years ending on the date of this Agreement, nor has any Group Company at any time been party to any transaction defrauding creditors as defined in s.423 UK Insolvency Act 1986.

(g) No creditor of any Group Company is currently taking steps to enforce any debt or other sum owed by the Company, whether by Legal Proceedings, the exercise of a Lien, power of distraint, or by the process of commercial rent arrears recovery, sequestration, recovery of possession or otherwise (where such debt or sum remains unpaid).

(h) No unsatisfied judgment is outstanding against any Group Company.

(i) No Group Company has suspended or ceased or threatened to suspend or cease to carry on all or a material part of its Business.

(j) No event analogous to any of the foregoing has occurred in or outside England.

3.6 Financial Statements.

(a) The Company has made available to the Buyer (i) drafts of the Company Financial Statements described in clauses (a)(i), (b)(i) and (c)(i) of the definition thereof (the “Draft Company Financial Statements”) and (ii) the Company Financial Statements described in clauses (a)(ii), (b)(ii) and (c)(ii) of the definition thereof. As promptly as reasonably practicable following the date of this Agreement (and, in any event, no later than ten (10) Business Days after the date of this Agreement), the Company will deliver the Company Financial Statements that will (i) comply as to form with all applicable accounting requirements and Law, and (ii) have been prepared in accordance with the Accounting Standards applied on a consistent basis throughout the periods covered thereby; provided, however, that the Company Financial Statements referred to in clauses (a) and (c) of the definition of such term are subject to normal recurring year-end adjustments (which, individually and in the aggregate, will not be material) and do not include footnotes.

(b) Each of the Company Financial Statements gives, when delivered, a true and fair view, in all material respects, of the consolidated assets, liabilities, Business, financial condition, results of operations and cash flows of each of the Group Companies as of the date thereof and for the period referred to therein, and is consistent with the books and records of each of the Group Companies.

(c) Each Group Company maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls which provide reasonable assurance that (i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of the financial statements of such Group Company and to maintain accountability for such Group Company’s assets, (iii) access to assets of such Group Company is permitted only in accordance with management’s authorization, and (iv) the reporting of assets of such Group Company is compared with existing assets at regular intervals.

 

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(d) Each Group Company maintains disclosure controls and procedures that provide reasonable assurances that all material information concerning such Group Company is made known on a timely basis to the individuals responsible for the preparation of the Company’s financial statements.

3.7 Absence of Certain Changes. Since (i) December 31, 2019 until the date of this Agreement, there has occurred no Change that, individually or in the aggregate, has had, or could reasonably be expected to result in, a Company Material Adverse Effect and each Group Company has conducted its Business in the Ordinary Course of Business and (ii) September 30, 2020, no Group Company has taken any of the actions set forth in clauses (c) through (g), (i), (l), (n) through (q) and (r) (solely to the extent of the immediately foregoing clause (ii)) of Section 5.1.

3.8 Undisclosed Liabilities. No Group Company has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet, a copy of which is attached to Section 3.8 of the Disclosure Schedule, (b) liabilities of a type that are required by GAAP to be reflected on a balance sheet that have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business (c) liabilities and obligations incurred in connection with this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby, (d) contractual and other liabilities incurred in the Ordinary Course of Business that are not required by GAAP to be reflected on a balance sheet (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement or violation of Law), and (e) other liabilities that would not, in individually or in the aggregate, reasonably be expected to be material to the Group Companies, taken as a whole. Effective as of the Closing, any notice of redemption delivered by any holder of Company Shares (including the redemption notice from NBGE AIV BT, L.P. dated as of April 28, 2020) has been revoked and no Group Company has any liability or obligation thereunder or arising therefrom.

3.9 Books, Records and Filings.

(a) The minute books of each Group Company contain, in all material respects, complete and accurate records of all actions taken at any meetings of such Group Company’s equity holders or board of directors or any committee thereof and of all written consents executed in lieu of the holding of any such meeting. The books of account and records of each Group Company accurately reflect in all material respects the assets, liabilities, business, financial condition and results of operations of such Group Company and have been maintained in accordance with the Accounting Standards. The statutory books, registers and other records of each Group Company are up-to-date and maintained in accordance with all applicable Law, in each case, in all material respects.

 

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(b) Section 3.9 of the Disclosure Schedule contains a list of all bank accounts and safe deposit boxes of each Group Company and the names of persons having signature authority with respect thereto or access thereto.

(c) All material returns, particulars, resolutions and other documents required to be delivered on behalf of any Group Company to the Registrar of Companies or equivalent authority in any other jurisdiction in which the Group Companies operate have been properly made and delivered and were when so made and delivered accurate and complete in all material respects.

(d) The copy of the articles of association of the Company set forth in Section 3.9(d) of the Disclosure Schedule is a true, accurate and complete copy of the Company Articles of Association and sets out in full the rights and restrictions attaching to each class of the Company’s share capital.

3.10 Tax Matters.

(a) Each of the Group Companies has properly filed on a timely basis all income, corporation or other material Tax Returns that it was required to file, and all such Tax Returns (including any claims for R&D Credits) are true, correct and complete in all material respects and were prepared in compliance with all applicable Laws. Within the last five (5) years, each Group Company has paid all Taxes, whether or not shown on any Tax Return, that were due and payable. The unpaid Taxes of each Group Company (i) for Tax periods through the date of the Most Recent Balance Sheet do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Most Recent Balance Sheet and (ii) for Tax periods through the Closing Date, will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the Accounting Standards. All unpaid Taxes of each Group Company for all Tax periods commencing after the date of the Most Recent Balance Sheet arose in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement.

(b) Section 3.10(b) of the Disclosure Schedule sets out material particulars of any agreement or arrangement between any of the Group Companies and a Governmental Entity pursuant to which a Group Company is authorized not to comply with a requirement which, but for such agreement or arrangement, would be its statutory obligation (aside from any extra-statutory concessions that any Governmental Entity has made public and which are generally available), and no Group Company has taken any action which has had the result of altering, prejudicing or in any way disturbing any arrangement or agreement which it has previously had with a Governmental Entity relating to Tax. Any transaction by any Group Company for which any clearance, approval or consent (a “Clearance”) from a Tax Authority was required or sought was carried out only after such Clearance was obtained, in accordance with the terms of such Clearance and as described in the application for the Clearance. Each application upon which a Clearance was based disclosed all facts and circumstances which would reasonably have affected the decision of the relevant Tax Authority to grant the Clearance and no facts or circumstances have since arisen to render any Clearance ineffective or invalid.

 

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(c) All Taxes that any Group Company is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been properly paid to the appropriate Governmental Entity, and each Group Company has complied in all material respects with all information reporting and backup withholding requirements, including the maintenance of required records with respect thereto, in connection with amounts paid to any Company Employee, independent contractor, creditor, or other third party. Each UK resident holder of a Company Option has made an election or entered into an agreement to pay the employer National Insurance which will arise in respect of their Company Options. A valid election under section 431(1) ITEPA has been made in respect of all restricted securities and restricted interests in securities (in each case as defined in Chapter 2 Part 7 of ITEPA) in relation to which a Group Company is the employer of a Company Employee who is either resident in the United Kingdom, or performs duties in the United Kingdom and all such elections are in the relevant Group Company’s possession or control. To the Knowledge of the Companies, no relevant steps (within the meaning of Part 7A ITEPA) have been taken by an employee benefit trust or any other third party for the benefit of a Company Employee (or any person connected with such Company Employee) to which an income tax charge has or may apply pursuant to the provisions of Part 7A ITEPA and no Group Company has become liable to Tax as a result of any loan or quasi-loan (each as defined in Schedule 11 to the Finance (No. 2) Act 2017) that was outstanding as at April 5, 2019.

(d) No distribution within section 1064 of the Corporation Tax Act 2010 (Certain expenses of close companies treated as distributions) has been made by any Group Company, and no such distribution or agreement to make such distribution has been or will be made prior to the Closing Date.

(e) No Group Company has made or agreed to make a loan or advance (or been treated as making a loan or advance) in circumstances where sections 455, 459 or 460 of the Corporation Tax Act 2010 (charge to tax in case of loan to participator) applied (or would apply, if the loan or advance were made), including (without limitation) where one of those sections applied but the tax has not yet become due.

(f) No Group Company holds, or has held, shares in a company which has made any transfer referred to in section 125 TCGA (Shares in close company transferring assets at an undervalue).

(g) No Group Company has a direct or indirect interest in shares in a company which is not resident in the United Kingdom and which would be a close company if it were resident in the United Kingdom in circumstances such that a chargeable gain accruing to the company not resident in the United Kingdom could be apportioned to the Company pursuant to section 3 TCGA.

(h) Section 3.10(h) of the Disclosure Schedule provides details of all claims made under Chapter I or Chapter II of Part V TCGA in relation to assets held by Group Companies, including the amounts of any such claims.

(i) No Group Company is or has ever been a member of a group for any United Kingdom Tax purpose with any company other than the other Group Companies. No Group Company is or has ever been a member of an affiliated group with which it has filed (or been required to file) consolidated, combined, unitary or similar Tax Returns. No Group Company (i)

 

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has any liability under Treasury Regulation Section 1.1502-6 (or any comparable or similar provision of federal, state, local or other applicable Tax Law), as a transferee or successor, pursuant to any contractual obligation (other than a contractual obligation entered into in the Ordinary Course of Business and not principally related to Tax), or otherwise for any Taxes of any Person other than such Group Company, or (ii) is a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement (other than a contractual obligation entered into in the Ordinary Course of Business and not principally related to Tax).

(j) Each Group Company has made available to the Buyer (i) complete and correct copies of all income, corporation Tax and other material Tax Returns of such Group Company relating to Taxes for all taxable periods for which the applicable statute of limitations has not yet expired, (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, gain recognition agreements, pending ruling requests and any similar documents submitted by, received by, or agreed to by or on behalf of such Group Company relating to Taxes for all taxable periods for which the statute of limitations has not yet expired, and (iii) complete and correct copies of all material agreements, rulings, settlements or other Tax documents with or from any Governmental Entity relating to Tax incentives of such Group Company.

(k) No examination, audit, enquiry, dispute, investigation or other action of or relating to any Tax Return of any Group Company by any Tax Authority is currently in progress or, to the Knowledge of the Companies, threatened or contemplated. No deficiencies for Taxes of any Group Company have been claimed, proposed or assessed, in each case, in writing, or to the Knowledge of the Companies, otherwise, by any Tax Authority. No Group Company has been informed in writing or to the Knowledge of the Companies, otherwise by any jurisdiction in which such Group Company does not file a Tax Return that the jurisdiction believes that such Group Company was required to file any Tax Return that was not filed or is subject to Tax in such jurisdiction. No Group Company has (i) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, which waiver or extension is still in effect, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, other than automatic extensions granted in the ordinary course, or (iii) executed or filed any power of attorney with any taxing authority, which is still in effect.

(l) No Group Company has made any payment, is obligated to make any payment, or is a party to any Contract that could obligate it to make any payment that may be treated as an “excess parachute payment” under Section 280G of the Code (without regard to Sections 280G(b)(4) and 280G(b)(5) of the Code).

(m) No Group Company will be required to include any material item of income in taxable income for any period (or portion thereof) ending after the Closing Date that is attributable to income economically realized in any period (or portion thereof) ending on or before the Closing Date or has claimed in a period (or portion thereof) ending on or before the Closing Date a material item of deduction economically attributable to any period (or portion thereof) ending after the Closing Date, as a result of any (A) adjustments as a result of any change in method of accounting on or prior to the Closing Date under Section 481 of the Code (or any similar

 

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adjustments under any provision of the Code or the corresponding state, local or non-U.S. Tax Law), (B) closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) executed prior to the Closing, (C) installment sale or open transaction disposition made prior to the Closing other than in the Ordinary Course of Business, (D) prepaid amount or deferred revenue received prior to the Closing other than in the Ordinary Course of Business, or (E) any election made pursuant to Section 108(i) of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) prior to the Closing.

(n) No Group Company has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.

(o) No Group Company has distributed to its equity holders shares, stock or securities of a controlled corporation, nor has shares, stock or securities of such Group Company been distributed, in a transaction to which Section 355 of the Code applies (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.

(p) There are no Liens or other encumbrances with respect to Taxes upon any of the assets of any Group Company, other than with respect to Taxes not yet due and payable.

(q) No Group Company is resident for Tax purposes in a country other than its jurisdiction of incorporation or subject to Tax in any country other than its country of incorporation, organization or formation by virtue of having employees, a permanent establishment or other place of business in that country.

(r) No Group Company has ever been a party to a transaction or Contract that is in conflict with the Tax rules on transfer pricing in any relevant jurisdiction. Each Group Company has maintained documentation (including any applicable transfer pricing studies) in accordance with the Tax rules on transfer pricing in any relevant jurisdiction.

(s) No Group Company (i) is a party to any joint venture, partnership, or other arrangement that is treated as a partnership for Tax purposes, or (ii) has made an entity classification (“check-the-box”) election under Section 7701 of the Code (or any similar provision of state, local or non-U.S. Law).

(t) No Group Company has engaged in a “reportable transaction” as set forth in Treasury Regulation section 1.6011-4(b) or a “listed transaction” as set forth in Treasury Regulation section 301.6111-2(b)(2) or any analogous provision of state, local or non-U.S. Law.

(u) Each Group Company that is required to be registered for the purposes of VAT (a “VATable Group Company”) is so registered and such registration is not subject to any conditions. Each VATable Group Company has complied in all material respects with all its legal obligations relating to VAT including maintaining and retaining complete, accurate and up-to-date records, invoices and documents appropriate or required for the purposes of applicable VAT legislation, and each VATable Group Company has filed all material Tax Returns and made all payments of VAT on a timely basis. Each VATable Group Company obtains credit for all input tax paid or suffered by it.

 

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(v) No Group Company has engaged in, or been a party to, a scheme or arrangement of which the main purpose, or one of the main purposes, was the avoidance of Tax or the obtaining of a Tax advantage. No Group Company has taken part in any arrangements in respect of which any disclosure was made (or required) or any information was provided (or required to be provided) in compliance with Part 7 UK Finance Act 2004, schedule 11A VATA, schedule 17A UK Finance Act (Np.2) Act 2017 or the International Tax Enforcement (Disclosable Amendments) Regulations 2020 (or any regulations made under any of the foregoing) or any similar legislation in any jurisdiction outside the United Kingdom. No Group Company has committed an offence under section 45(1) or section 46(1) of the UK Criminal Finances Act 2017 (the “CFA”) and each Group Company has implemented such prevention procedures (as defined in sections 45(3) and 46(4) of the CFA) as are proportionate to its business risk.

(w) All documents to which a Group Company is a party and under which any Group Company has any rights or that form part of a Group Company’s title to any asset have been duly stamped and any applicable stamp or any other transfer, registration or documentary Tax or duty in respect of such documents has been paid. No documents that are outside the United Kingdom and have yet to be brought into the United Kingdom would attract stamp duty if they were brought into the United Kingdom. No Group Company has undertaken to re-present for stamping any document that has been provisionally stamped.

(x) No Group Company has (a) made any transfer of value within sections 94 and 202 IHTA, (b) received any value such that a liability may arise under section 199 IHTA, nor (c) been a party to associated operations in relation to a transfer of value as defined by section 268 IHTA. No shares in or assets of any Group Company are subject to any charge or subject to a power of sale, charge or mortgage pursuant to section 212 IHTA or any similar provision in any jurisdiction outside the UK and there are no circumstances that might lead to such a charge or power of sale, charge or mortgage arising.

(y) No Group Company has ever participated in an international boycott as defined in Section 999 of the Code.

(z) No Group Company has applied for or availed itself of any government grants, Tax holidays, loans, or any Tax benefits or other relief related to COVID-19, including (i) any loan pursuant to the Paycheck Protection Program in Section 1102 and Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), (ii) any relief pursuant to Sections 2301 or 2302 of the CARES Act, (iii) any deferral of VAT or other UK Tax payments related to COVID-19, or (iv) any loan or funds from similar applicable Laws enacted by a Governmental Entity in any state, local, or non-U.S. jurisdictions in response to COVID-19.

3.11 Assets. Except as reflected in the Company Financial Statements, each Group Company is the true and lawful owner of, and has good and valid title to, all of the assets (tangible or intangible) owned or purported to be owned by such Group Company, free and clear of all Liens (except Permitted Liens). The assets, rights and Properties owned by the Group Companies are sufficient for the conduct of the Business as presently conducted. Each material tangible asset of any Group Company is, to the Knowledge of the Company, free from defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

 

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3.12 Owned and Leased Real Property.

(a) No Group Company owns, or has ever owned, any real property.

(b) Section 3.12(b) of the Disclosure Schedule correctly sets out a complete list of all of the Properties leased by the Group Company and in respect of any Leases lists the expiration date of such Lease, the current landlord and tenant, the premises leased. The Group Companies have made available to the Buyer complete and accurate copies of the Leases. Section 3.12(b) of the Disclosure Schedule fully and correctly sets out a complete list of Leases and all amendments and modifications thereto. No Group Company occupies any space other than pursuant to a Lease. The Group Companies have performed all of their obligations under any termination agreements pursuant to which it has terminated any leases of real property that are no longer in effect and has no continuing liability with respect to such terminated real property leases or otherwise in respect of any real property other than in relation to the Properties set out in Section 3.12(b) of the Disclosure Schedule. With respect to each Lease:

(i) such Lease is legal, valid, binding, enforceable and in full force and effect against the Group Company that is the party thereto, as applicable, and, to the Companies’ Knowledge, against each other party thereto;

(ii) all rent, outgoings and other sums accrued as at the date of this Agreement (including service charges, rates and insurance) have been paid and will be paid in full up to the Closing;

(iii) to the Companies’ Knowledge, no Group Company is in violation of any statutory and local authority requirements and obligations or any Law affecting the Properties, which such violation would be likely to result in material liability to any Group Company and no Group Company is in violation of the permitted uses of the Properties, which such violation would be likely to result in material liability to any Group Company;

(iv) no Group Company or, to the Companies’ Knowledge, any other party, is, in any material respect, in breach or violation of, or default under, any such Lease, and no event has occurred, is pending or, to the Companies’ Knowledge, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute any such breach or default by such Group Company or, to the Companies’ Knowledge, any other party under such Lease; and no event has occurred that would give rise to a termination right under such Lease;

(v) no Group Company has assigned, transferred, conveyed, mortgaged, subleased, licensed, deeded in trust or encumbered any interest in the leasehold or subleasehold and nor has any Group Company agreed to do so;

 

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(vi) To the Companies’ Knowledge, the Properties are supplied with utilities and other services adequate for the operation of said Properties by the Group Companies as currently conducted;

(vii) there has been no renunciation of renewal rights by the Group Companies in respect of the Properties, whether contractual or pursuant to Part II of the UK Landlord and Tenant Act 1954;

(viii) to the Knowledge of the Companies, the Properties leased to the Group Companies pursuant to the Leases are in good operating condition and repair in all material respects, normal wear and tear excepted;

(ix) to the Knowledge of the Companies, there are no Liens (other than Permitted Liens), easements, covenants or other restrictions applicable to the real property subject to such Lease which would reasonably be expected to impair the current uses or the occupancy by such Group Company of the property subject thereto;

(x) to the Knowledge of the Companies, no material construction, alteration or other leasehold improvement work performed by or at the request of a Group Company with respect to the Lease remains to be paid for or performed by any Group Company; and

(xi) no Group Company is obligated to pay any leasing or brokerage commission relating to such Lease and will not have any obligation to pay any leasing or brokerage commission upon the renewal or expansion of the Lease.

3.13 Intellectual Property.

(a) Section 3.13(a) of the Disclosure Schedule lists all Company Registrations, in each case enumerating specifically the applicable filing or registration number, title, jurisdiction in which filing was made or from which registration issued, date of filing and issuance, domain name registrar, names of all current applicant(s) and registered owners(s), and all actions that must be taken by any Group Company within ninety (90) calendar days of the date hereof with respect thereto (including any payment of any fees or the filing of any documents), as applicable. All assignments of Company Registrations to any Group Company have been properly executed and recorded. All Company Registrations are valid, subsisting and enforceable, all issuance, renewal, maintenance and other payments that are or have become due with respect thereto have been timely paid by or on behalf of the applicable Group Company, and there are no Liens on any of the Company Registrations. No issuance or registration obtained, and no application filed, by any Group Company in connection with the Company Owned Intellectual Property has been cancelled, abandoned, allowed to lapse or not renewed, except where the Company has in its reasonable business judgment decided to cancel, abandon, allow to lapse or not renew such issuance, registration, or application.

 

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(b) There are no inventorship challenges, derivation, opposition or nullity proceedings, reexaminations (including ex parte reexamination, inter partes reexamination, inter partes review, post grant review or Covered Business Method (CBM) review) or interferences declared, commenced or provoked, or to the Knowledge of the Company, threatened, with respect to any Patent Rights included in the Company Registrations. Each Group Company has complied with its duty of candor and disclosure to the United States Patent and Trademark Office and any other relevant foreign patent or trademark office with respect to all patent and trademark applications filed by or on behalf of such Group Company and has made no material misrepresentation in such applications. The Group Companies have no Knowledge of any information that would preclude any Group Company from having clear title to any Group Company’s Company Registrations or affecting the patentability, validity or enforceability of any Company Registrations.

(c) No Group Company has received any notice alleging that any of the Company Owned Intellectual Property is invalid or may be subject to invalidity proceedings, or otherwise attacking the ownership of the Company Owned Intellectual Property. There is no basis for a claim that any Company Owned Intellectual Property is invalid or unenforceable.

(d) Each item of Company Intellectual Property will be owned or available for use by the Buyer or a subsidiary of the Buyer (including a Group Company) following the Closing on the same terms and conditions as it was immediately prior to the Closing. The Group Companies are the sole and exclusive owners of all right, title and interest in and to all of the Company Owned Intellectual Property, free and clear of any Liens. The Company Intellectual Property constitutes all Intellectual Property necessary (i) to Exploit the Customer Offerings in the manner so done currently, (ii) to Exploit the Internal Systems as they are currently used and (iii) to otherwise conduct the business of the Group Companies in the manner currently conducted.

(e) A true and complete list of all Customer Offerings is set forth in Section 3.13(e)(i) of the Disclosure Schedule, and all Internal Systems that are material to the business of the Company and any of the Subsidiaries are listed and described in Section 3.13(e)(ii) of the Disclosure Schedule.

(f) Each Group Company has taken all reasonable measures to protect the proprietary nature of each item of Company Owned Intellectual Property, and to maintain in confidence all trade secrets and confidential information comprising a part thereof. Except as would not be material to the Group Company, taken as a whole, each Group Company has, during the past three (3) years, complied with all applicable contractual and legal requirements pertaining to information privacy, use and security. During the past three (3) years, no complaint relating to an improper use or disclosure of, or a breach in the security of, any such information has been made or threatened in writing (or, to the Company’s Knowledge, orally) against any Group Company. There has been no: (i) unauthorized disclosure or use of any third party proprietary or confidential information in the possession, custody or control of any Group Company, or (ii) breach of any Group Company’s security procedures wherein confidential information has been disclosed to a third Person.

(g) None of the Customer Offerings or Internal Systems, or the Exploitation thereof by any Group Company, or the Exploitation of any of the Customer Offerings by any manufacturer, reseller, distributor, customer or user thereof, or any past, current or contemplated activity of any Group Company, does or will infringe or violate, or constitute a misappropriation of, or in the past has infringed or violated, or constituted a misappropriation of, any Intellectual Property rights of any third party.

 

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(h) Section 3.13(h) of the Disclosure Schedule lists any complaint, claim or notice, or threat of any of the foregoing (including any notification that a license under any patent is or may be required by, or is available for license to, any Group Company), received by each Group Company alleging any such infringement, violation or misappropriation, as well as any request or demand for indemnification or defense received by any Group Company with respect to any alleged infringement, violation or misappropriation of any Intellectual Property rights of any third party. Each Group Company has made available to the Buyer copies of all such complaints, claims, notices, requests, demands or threats, as well as any legal opinions, studies, market surveys and analyses relating to any alleged or potential infringement, violation or misappropriation.

(i) To the Companies’ Knowledge, no Person (including any Company Employee or current or former consultant of any Group Company) has infringed, violated or misappropriated, or is currently infringing, violating or misappropriating, any of the Company Owned Intellectual Property. The Company has made available to the Buyer copies of all correspondence, analyses, legal opinions, complaints, claims, notices or threats concerning the infringement, violation or misappropriation of any Company Owned Intellectual Property.

(j) Section 3.13(j) of the Disclosure Schedule identifies each license, covenant or other Contract pursuant to which any Group Company has assigned, transferred, licensed, distributed or otherwise granted any right or access to any Person, or covenanted not to assert any right, with respect to any past, existing or future Company Owned Intellectual Property (“Outlicenses”), excluding (A) non-disclosure Contracts entered into in the Ordinary Course of Business not containing any express license grants or providing for any assignment of Intellectual Property; (B) agreements with customers of the Group Companies or users of the Customer Offerings entered into in the Ordinary Course of Business pursuant to which no licenses or rights are granted with respect to Company Owned Intellectual Property other than term-limited, non-exclusive rights to use Company Offerings; and (C) Contracts with vendors and suppliers entered into the Ordinary Course of Business pursuant to which no licenses or rights are granted with respect to Company Owned Intellectual Property other than non-exclusive licenses from the Company to feedback or Trademarks that are ancillary to primary purpose of the Contract. The Company has made available to Buyer copies of all Outlicenses that are material to the business of the Company and any of its Subsidiaries. No Group Company is a member of or party to, and no Company Owned Intellectual Property is subject to any bylaw, rule, policy, commitment or agreement relating to, any patent pool, standards-setting body, trade association or other similar organization.

(k) Section 3.13(k) of the Disclosure Schedule identifies (i) each Contract pursuant to which the applicable Group Company or Group Companies Exploit Company Licensed Intellectual Property (“Inlicenses”) (excluding (A) commercially-available, off-the-shelf technology (including Software and technology offered on a SaaS, PaaS, IaaS or similar basis) that are licensed by such Group Company pursuant to “shrink wrap” licenses and are not material to the business of the Company and any of its Subsidiaries; (B) licenses for Open Source Materials;

 

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(C) non-disclosure Contracts entered into in the Ordinary Course of Business not containing any express license grants or providing for any assignment of Intellectual Property; and (D) Contracts with customers of the Group Companies or users of the Customer Offerings entered into in the Ordinary Course of Business pursuant to which no licenses or rights are granted with respect to Company Licensed Intellectual Property other than inbound licenses to feedback or Trademarks that are ancillary to the primary purpose of the Contract; and (ii) each Contract or assignment pursuant to which any Group Company has obtained any joint or sole ownership interest in or to each item of Company Owned Intellectual Property (excluding contracts with employees or contractors for the assignment of Intellectual Property entered into in the Ordinary Course of Business in one of the standard form agreements made available to the Buyer). The Company has made available copies of all Inlicenses that are material to the business of the Company and any of its Subsidiaries. There is a valid and subsisting Contract in writing for each item of Company Licensed Intellectual Property and no Group Company is in breach of, and there are no circumstances which to the Companies’ Knowledge are likely to give rise to a breach of, such Contracts. No Person that has licensed or provided Company Licensed Intellectual Property to any Group Company has retained or obtained sole ownership of, or an exclusive license to, any Intellectual Property rights in any improvements or derivative works that are made in whole or in party by any Group Company.

(l) No Group Company has licensed, distributed or disclosed, and knows of no distribution or disclosure by others (including any Company Employee or any current or former contractor of any Group Company) of, the Company Source Code to any Person, and no Group Company has any duty or obligation (whether present, contingent or otherwise) to license, deliver or disclose any Company Source Code to any Person. The Group Companies have possession or control of the Company Source Code and have taken all reasonable physical and electronic security measures to prevent disclosure of such Company Source Code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, nor will the consummation of the transactions contemplated hereby, result in the licensing, disclosure or release of such Company Source Code to any third party.

(m) All Software and Documentation that is Company Owned Intellectual Property has been designed, authored, tested and debugged by regular Company Employees within the scope of their employment or by independent contractors of the Group Companies who have executed valid and binding Contracts expressly assigning all right, title and interest in such copyrightable materials to the applicable Group Company, waiving their non-assignable rights (including moral rights) in favor of such Group Company and its permitted assigns and licensees, and have no residual claim to such materials.

(n) Each Company Employee and each current or former independent contractor of each Group Company has executed a valid, binding and enforceable written agreement in one of the standard form agreements made available to the Buyer that include provisions expressly assigning to such Group Company all right, title and interest in any Intellectual Property invented, created, developed, authored, conceived or reduced to practice during the term of such Company Employee’s employment or such independent contractor’s work for such Group Company, and all Intellectual Property rights therein, and has waived all moral rights therein, in each case to the maximum extent legally permissible. No Company Employees or current or former independent contractors have violated any such agreements, and each Group Company uses commercially reasonable efforts to prevent any such violation.

 

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(o) No Company Employee or current or former independent contractor of any Group Company is entitled to, or has claimed any payment in respect of, any of the Company Intellectual Property.

(p) The Customer Offerings are free from defects in design, workmanship and materials and conform to the written Documentation and specifications therefor. The Customer Offerings and Internal Systems do not contain any disabling device, virus, worm, back door, Trojan horse or other disruptive or malicious code that may or are intended to impair their intended performance or otherwise permit unauthorized access to, hamper, delete or damage any computer system, software, network or data. No Group Company has received any warranty claims, contractual terminations or requests for settlement or refund due to the failure of the Customer Offerings to meet their specifications or otherwise to satisfy end user needs or for harm or damage to any third party. The Internal Systems are adequate in all material respects for the current and contemplated conduct of the businesses of the Group Companies.

(q) The Group Companies have commercially reasonable disaster recovery and security plans, procedures and facilities for the business of the Group Companies that are consistent with industry standards, and have during the past three (3) years taken reasonable steps to safeguard the Customer Offerings and Internal Systems in their possession or operational control from unauthorized access, disclosure or use by any Person. Without limiting the generality of the foregoing, the Group Companies have during the past three (3) years implemented commercially reasonable security plans that (i) identify internal and external risks to the security of the Group Companies’ confidential information, trade secrets and any Company Data held or used by the Group Companies and (ii) implement, monitor and improve adequate and effective safeguards to control those risks. There are no ongoing material vulnerabilities in the Customer Offerings and/or the Internal Systems within the Group Companies’ possession or otherwise within their operational control which would reasonably be expected to present a significant risk of giving rise to cyber security incidents. In the past six (6) years, except as would not be material to the Group Companies, taken as a whole, there have been no unauthorized intrusions or breaches of the security of the Customer Offerings or Internal Systems.

(r) Section 3.13(r) of the Disclosure Schedule lists all Open Source Materials that are material to the Exploitation of Customer Offerings or Internal Systems and describes whether the Open Source Materials have been modified and/or distributed by the Group Companies.

(s) Each Group Company is in full compliance with all licenses applicable to Open Source Materials used in connection with the Internal Systems and the Customer Offerings and no Group Company utilizes the Open Source Materials in any way as would restrict the ongoing use or operation of the business of any Group Company as it currently operates.

 

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(t) Except as set forth in Section 3.13(t) of the Disclosure Schedule, neither the Company nor any Subsidiary has (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Customer Offerings; (ii) distributed Open Source Materials in conjunction with any other software developed or distributed by the Company or any Subsidiary; or (iii) used Open Source Materials that create, or purport to create, obligations for the Company or any Subsidiary with respect to the Customer Offerings or grant, or purport to grant, to any third party, any rights or immunities under Intellectual Property rights (including using any Open Source Materials that require, as a condition of Exploitation of such Open Source Materials, that other Software incorporated into, derived from or distributed with such Open Source Materials be (w) made available, disclosed or distributed in source code form, (x) licensed for the purpose of making derivative works, (y) redistributable at no charge or minimal charge, or (z) licensed under terms that allow reverse engineering, reverse assembly or disassembly of any kind).

(u) No Group Company has either sought, applied for or received any support, funding, resources or assistance from any federal, state, local or foreign governmental or quasi-governmental agency or funding source in connection with the Exploitation of the Customer Offerings, the Internal Systems or any facilities or equipment used in connection therewith. No university or Governmental Entity has sponsored any research or development conducted by any Group Company, or has any claim of right or ownership of or Lien on any Company Owned Intellectual Property or any Company Licensed Intellectual Property.

(v) Neither the negotiation, execution, delivery or performance of this Agreement, nor the consummation of the transactions contemplated hereby, will result in (i) breach of or default under any Contract governing, or impairment of the rights of any Group Company or the Buyer in or to, any material Company Intellectual Property licensed to any Group Company by a third party, (ii) an impairment of the rights of any Group Company or the Buyer in or to any Company Owned Intellectual Property or portion thereof, (iii) the grant or transfer to any third party of any new license or other interest under, the abandonment, assignment to any third party, or modification or loss of any right with respect to, or the creation of any Lien on, any Company Owned Intellectual Property, or (iv) any of the Group Companies, the Buyer or any of their respective Affiliates being obligated to pay any penalty or new or increased royalty or fee to any Person under any Contract governing any Company Intellectual Property.

(w) All material computer systems, communications systems, Software and hardware used by any Group Company are either owned by a Group Company or held by a Group Company on license. The licenses applicable to all Company Licensed Intellectual Property used by the Group Companies authorize the Group Companies to use all Company Licensed Intellectual Property in which they are in fact used in connection with their businesses currently.

(x) The Group Companies and all Persons performing communication services for the Group Companies have at all times in the prior five (5) years complied in all material respects with, as applicable, the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013), state anti-spam Laws, and all other Laws governing marketing, promotion, email harvesting, and the transmission of unsolicited communications.

 

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(y) All Social Media Accounts are held in the name of a Group Company, and not in the name of any Company Employee or contractor. The Group Companies are in possession of all usernames and passwords for all Social Media Accounts, and no former employee or contractor of any Group Company has the password to any Social Media Account. All use of the Social Media Accounts complies with and has complied during the prior five (5) years in all material respects with all applicable Laws and all applicable terms of use, terms of service and other agreements applicable to such Social Media Accounts.

3.14 Contracts.

(a) Section 3.14(a) of the Disclosure Schedule lists the following Contracts (each a “Material Contract”) to which any of the Group Companies is a party:

(i) Except for Employee Benefit Plans, any Contract (or group of related Contracts) for the lease of personal property from or to third parties involving payments by any Group Company in excess of $150,000 annually;

(ii) any Contract (or group of related Contracts), in which any Group Company has granted “most favored nation” pricing or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

(iii) any Contract with a Significant Customer (other than a Significant Customer that is not one of the top 20 customers or clients by revenue of the Group Companies during the last full fiscal year and the interim period through the Most Recent Balance Sheet Date) relating to the sale or license of the Customer Offerings (other than purchase orders and similar confirmatory documents or other ancillary agreements not specific to the sale or license of the Group Companies’ products);

(iv) any Contract with a Significant Supplier relating to the supply of goods and services to the Company (and not including ancillary agreements not specific to the supply of goods or services to the Company);

(v) any Contract providing for any royalty, milestone or similar payments by any Group Company;

(vi) any Contract concerning the establishment or operation of a partnership, joint venture or limited liability company;

(vii) any Contract (or group of related Contracts) under which any Group Company has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) Indebtedness (including capitalized lease obligations) or under which it has imposed (or may impose) a Lien on any of its assets, tangible or intangible;

(viii) any Contract for the disposition of any material portion of the assets or business of any of the Group Companies or any Contract for the acquisition of any material assets or business of any other Person (other than purchases of supplies in the Ordinary Course of Business);

 

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(ix) any Contract in which any Group Company is bound by noncompetition obligations (other than Leases of Properties);

(x) any consulting Contract that provides annual compensation in excess of $350,000 or event based compensation in excess of $350,000 or any employment agreement, other Contract, or other Employee Benefit Plan that includes provisions for the payment of severance, change in control, or retention agreement that grants any retention, change of control, severance or termination pay or benefits, other than severance or termination pay or benefits not exceeding statutory severance or notice obligations applicable in the relevant jurisdiction;

(xi) any settlement agreement or settlement-related agreement (including any agreement in connection with which any employment-related claim is settled) that has any outstanding payment or other material obligation by the Company;

(xii) any Contract, other than Employee Benefit Plans, involving any current or former officer, director or equity holder of any Group Company or any Affiliate thereof (other than employment agreements);

(xiii) any Contract, other than Leases of Properties, under which the consequences of a default or termination would reasonably be expected to have a Company Material Adverse Effect;

(xiv) any agency, distributor, sales representative, franchise or similar Contracts to which any Group Company is a party or by which any Group Company;

(xv) any Contract which contains any provisions requiring any Group Company to indemnify any other party (excluding indemnities contained in Leases of Properties or in Contracts for the purchase, sale or license of products, services or supplies entered into in the Ordinary Course of Business);

(xvi) any Contract that could reasonably be expected to have the effect of prohibiting or impairing the conduct of the business of any Group Company or the Buyer or any of its Affiliates as currently conducted and as currently proposed to be conducted;

(xvii) any Contract listed or required to be listed in Section 3.13(i) of the Disclosure Schedule;

(xviii) any Contract or assignment listed or required to be listed in Section 3.13(j) of the Disclosure Schedule;

(xix) any Contract with any Governmental Entity or any subcontract with a higher-tier government contractor; and

(xx) any other Contract (or group of related Contracts) either involving more than $150,000 or not entered into in the Ordinary Course of Business, other than (A) Leases of Properties and (B) Employee Benefit Plans.

 

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(b) The Group Companies have made available to the Buyer a complete and accurate copy of each Material Contract (as amended to date). With respect to each Material Contract: (i) the Material Contract is legal, valid, binding and, subject to the Enforceability Exceptions, enforceable and in full force and effect against the applicable Group Company that is the party thereto, as applicable, and, to the Companies’ Knowledge, against each other party thereto; and (ii) except as set forth in Section 3.14(b) of the Disclosure Schedule, neither the applicable Group Company nor, to the Knowledge of the Companies, any other party, is, in any material respect, in breach or violation of, or default under, any such Material Contract, and no event has occurred, is pending or, to the Knowledge of the Companies, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute any such breach or default by such Group Company or, to the Knowledge of the Companies, any other party under such Material Contract. Each Material Contract will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.

3.15 Litigation. There is no material Legal Proceeding pending or, to the Companies’ Knowledge, threatened with respect to, against or affecting any Group Company or any officer, director or employee, of any Group Company in its, his or her capacity as such or with respect to any Group Company, or seeking to prevent or delay the transactions contemplated hereby, and no written (or, to the Companies’ Knowledge, other) notice of any Legal Proceeding involving any Group Company, whether pending or threatened, has been received by any Group Company. There are no material Orders against any Group Company. There is no material Legal Proceeding by any Group Company pending, or which any Group Company has commenced preparations to initiate, against any other Person.

3.16 Environmental Matters.

(a) Each Group Company has complied with all applicable Environmental Laws. There is no pending or, to the Knowledge of the Companies, threatened Legal Proceeding relating to any Environmental Law involving any Group Company.

(b) No Group Company has any liabilities or obligations arising from the release or threatened release of any Materials of Environmental Concern into the environment.

(c) No Group Company is a party to or bound by any Order or Contract between such Group Company and any Governmental Entity entered into in connection with any legal obligation or liability arising under any Environmental Law.

(d) Set forth in Section 3.16(d) of the Disclosure Schedule is a list of all documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently or previously owned or operated by any Group Company (whether conducted by or on behalf of any of the Group Companies or a third party, and whether done at the initiative of any of the Group Companies or directed by a Governmental Entity or other third party) which any Group Company has possession of or access to. A complete and accurate copy of each such document has been made available to the Buyer.

 

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(e) The Group Companies have no Knowledge of any environmental liability relating to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by any Group Company.

3.17 Labor and Employment.

(a) Section 3.17(a) of the Disclosure Schedule contains a list of all current Company Employees, along with the employing Group Company, position, date of hire, annual rate of compensation (or with respect to Company Employees compensated on an hourly or per diem basis, the hourly or per diem rate of compensation), target annual incentive compensation of each such person and employment status of each such person (including whether the person is on leave of absence and the dates of such leave). Section 3.17(a) of the Disclosure Schedule sets forth all bonuses and commissions earned by any Company Employee through the Closing Date that are expected to be accrued but unpaid as of the Closing Date and the amounts of accrued vacation or paid time off, accrued sick time, and the amount of such liabilities as of the date listed in the Disclosure Schedule, and which the Company will update within five (5) Business Days of the date of this Agreement. Each U.S. Company Employee is retained at-will, save for those Company Employees identified at Section 3.17(a) of the Disclosure Schedule who are all employed pursuant to written contracts of employment terminable on notice, which are the same in all material respects as the template contract of employment, a copy of which has previously been made available to the Buyer. Each Company Employee has entered into the applicable Group Company’s standard form of confidentiality, non-competition and assignment of inventions agreement, a copy of which has previously been delivered to the Buyer. To the Knowledge of the Companies, all of the agreements referenced in the preceding sentence will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing. To the Knowledge of the Companies, no Company Employee or group of Company Employees has served notice of termination on, or has any plans to terminate employment, with the applicable Group Company.

(b) No Group Company has materially breached or violated any (i) applicable Law respecting employment or employment practices, including any such Law respecting terms and conditions of employment, payment of wages and hours of work, terms and conditions of employment, employment or other discrimination, employee classification (for overtime or vacation purposes or as employee versus independent contractor), record keeping, equal pay or pay equity, workers’ compensation, family and medical or other employee leave (including the Families First Coronavirus Response Act), the Immigration Reform and Control Act, the UK Immigration Act 1996, labor relations, disability rights or benefits, privacy, unlawful harassment, retaliation, whistleblowing, wrongful discharge or violation of the personal rights of Company Employees or prospective employees, equal opportunity/affirmative action, plant closure or mass layoff issues, unemployment insurance, and occupational safety and health requirements, (ii) Order with respect to employees, or (iii) employment or other individual service provider agreement. No material disputes, claims, controversies, investigations, inspections, audits or other Legal Proceedings are pending or, to the Knowledge of the Companies, threatened, with respect to such Laws or agreements, either by private Persons or by Governmental Entities. Neither the Company nor any Subsidiary is a party to a conciliation agreement, consent decree or other agreement or Order with any Governmental Entity with respect to employment practices.

 

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(c) Except as set forth in Section 3.17(c) of the Disclosure Schedule, no Group Company has ever been a party to or bound by any collective bargaining agreement, trade union agreement, industry or national labor agreement, works council, staff association, employee representative agreement, or information or consultation agreement, nor has any Group Company experienced any actual or threatened strikes, grievances, industrial action, claims of unfair labor practices or other collective bargaining disputes. No consent of, consultation with, or the rendering of formal advice by, any labor or trade union, works council or other employee representative body is required for the Group Companies to enter into this Agreement or to consummate any of the transactions contemplated by this Agreement. No collective bargaining agreement or other similar agreement of any Group Company prohibits or in any way restricts the temporary or permanent suspension or termination of any employee, or the relocation or closing of any office, facility or other operation of such Group Company. The Group Companies have no Knowledge of any organizational effort made or threatened (including the filing of a petition for certification) either currently or within the past two (2) years, by or on behalf of any labor union or works council with respect to Company Employees.

(d) Section 3.17(d) of the Disclosure Schedule contains a list of all consultants and independent contractors currently engaged by any of Group Companies (whether the consultant is engaged individually or through a personal services company), along with the engaging Group Company, position, date of retention and rate of remuneration for each such Person. Each such consultant and independent contractor has entered into the applicable Group Company’s standard form of independent contractor agreement with such Group Company, a copy of which has previously been made available to the Buyer. No current independent contractor has been providing services to any Group Company for a period of six (6) consecutive months or longer. No Group Company has or has had any temporary or leased employees or agency workers.

(e) Each Group Company has made available to the Buyer a true, correct and complete list of all Company Employees working in the United States or the United Kingdom who are not citizens or permanent residents of the United States or the United Kingdom, as applicable, that indicates visa, work authorization, and green card status (as applicable) and the date their work authorization of their working country is scheduled to expire. All other Company Employees employed in the United States or the United Kingdom, as applicable, are citizens or permanent residents of their working country. Section 3.17(e) of the Disclosure Schedule sets forth a true, correct and complete list and description of all expatriate contracts that any Group Company has in effect with any Company Employee and all employment contracts and independent contractor arrangements covering any individuals providing services outside the country in which they are nationals. Each Company Employee working in a country other than one of which such Company Employee is a national has a valid work permit, certificate of sponsorship, visa, or other right under applicable Law that permits him or her to be employed lawfully by the applicable Group Company in the country in which he or she is so employed.

(f) Each Group Company has withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all material amounts required to be withheld from Company Employees and is not liable for any arrears of wages, Taxes, interest, penalties or other sums for failure to comply with any of the foregoing.

 

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(g) There are no amounts owing to any present or former director or consultant or independent contractor or Company Employee other than remuneration accrued for not more than one applicable payment period pursuant to the terms of such individual’s contract or applicable Law, or for reimbursement of legitimately incurred business expenses and there are no ongoing or expected negotiations in respect of any increase in remuneration or benefits of any Company Employee.

(h) No offers of employment or engagement have been made by any Group Company to prospective officers, employees, consultants or independent contractors that have not been accepted or have been accepted but have not yet commenced.

(i) No charges or complaints are open and pending against any Group Company (or since December 31, 2017 have been settled or closed) with the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance Programs (the “OFCCP”), the Equality and Human Rights Commission or any other Governmental Entity with respect to any employment-related matters or pursuant to internal complaint procedures. No employee of the Group Companies has made, since December 31, 2017, a written complaint of discrimination, harassment, retaliation, or other similar wrongdoing or, to the Knowledge of the Companies, since December 31, 2019, a material oral complaint. There are no, and since January 1, 2019 there have not been any, Legal Proceedings pending or, to the Company’s Knowledge, threatened, against any Group Company, or any internal investigations by any Group Company, in each case, involving allegations of discrimination, harassment, retaliation, or other similar wrongdoing by (A) any member of any Group Company’s management team or (B) any Company Employee in a managerial, supervisory or executive (or any Group Company’s equivalent) position or above, nor have any requests been to conduct any such internal investigations. True, correct and complete information regarding any closed charges or complaints filed since December 31, 2017 with the Equal Employment Opportunity Commission, the OFCCP, or any other Governmental Entity with respect to any employment-related matters (or, with respect to discrimination, retaliation, or similar wrongdoing, pursuant to internal complaint procedures) has been made available to the Buyer.

(j) The Group Companies have made available to Buyer (i) all of each Group Company’s written employee handbooks, employment manuals, employment policies, or affirmative action plans, and (ii) written summaries of all unwritten employment policies, workplace customs and/or practices (including detail of any practice of providing severance payments upon termination of employment for any reason). The Group Companies have made available to Buyer the policy of each Group Company with respect to accrued vacation, paid time off, accrued sick time and earned time off.

(k) No Group Company has caused (i) a plant closing as defined in the Worker Adjustment and Retraining Notification Act (the “WARN Act”) affecting any site of employment or one or more operating units within any site of employment of such Group Company or (ii) a mass layoff as defined in the WARN Act, nor has any Group Company been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar foreign, state or local Law. No employee of any Group Company at a U.S. facility with sufficient numbers of employees to be covered by the WARN Act has suffered an employment loss, as defined in the WARN Act, within the ninety (90) day period ending on the date hereof.

 

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(l) Except as would not be material, no Group Company has any direct liability or obligation with respect to any misclassification of any person as an independent contractor rather than as an employee, with respect to any employee leased from another employer or with respect to any person currently or formerly classified as exempt from overtime and minimum wages.

(m) No Group Company has taken any actions due to the COVID-19 pandemic to furlough or otherwise temporarily lay off employees or temporarily pause the services of individual independent contractors, terminate the employment or engagement of any employee or independent contractor, reduce hours, wages or fees or benefits of employees or individual independent contractors or provided notice of any intent to do the foregoing. Each Group Company has taken reasonable steps to protect employees and independent contractors in the workplace with respect to the COVID-19 pandemic and, to the Knowledge of the Companies, has not otherwise experienced any material employment-related liability due to the COVID-19 pandemic. No Group Company has participated in the UK Coronavirus Job Retention Scheme or any similar scheme.

(n) There is not in force any agreement for any current Company Employee working outside the United States that (i) provides that the transactions contemplated by this Agreement shall entitle such individual to treat such transactions as a breach of any Contract or as good reason under any such Contract for such individual to end the employment relationship or (ii) shall entitle such individual to any payment or benefit whatsoever. Since January 1, 2017, no Group Company has breached or violated any applicable Law concerning employer contributions to any trade union, housing, unemployment, retirement, bonus, pension and welfare funds and all other funds to which an employer is required by non-U.S. Law to contribute that, individually or in the aggregate, has resulted in or would reasonably be expected to result in any material liability or the loss of any material right or benefit with respect to any Group Company. No Company Employee has any right (whether actual or contingent) to pension or other benefits or terms of employment arising as a result of a transfer of their employment to any Group Company under either the UK Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended), or the UK Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended) or any equivalent legislation in any other jurisdiction.

(o) No Group Company has in the 12 months preceding the date of this Agreement given notice of redundancies to the relevant UK Secretary of State or started consultations with a trade union under Part IV Chapter II UK Trade Union and Labour Relations (Consolidation) Act 1992 or failed to comply with its obligations under Part IV Chapter II of that Act. In the 12 months preceding the date of this agreement no Group Company has been a party to a relevant transfer (as defined in the UK Transfer of Undertakings (Protection of Employment) Regulations 2006), or provided indemnity protection to any third party in relation to any relevant transfer taking place within that timeframe, or failed to comply with an obligation imposed by such Regulations, and no such notice of redundancies and no such relevant transfer is pending or anticipated.

 

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(p) Since the Most Recent Balance Sheet, no payments have been made by any Group Company which are in excess of that person’s entitlements under their terms of employment or appointment, nor is the Company considering making, nor is it obliged to make, any such payments. No Group Company operates and has not operated any custom, policy, practice or arrangement (whether contractual or non-contractual) pursuant to which employees on or by reason of the termination of their employment or loss of office including by reason of redundancy (within the meaning of s.139 UK Employment Rights Act 1996 and/or s.195 UK Trade Union and Labour Relations (Consolidation) Act 1992) are entitled to payments which are in excess of those required to be paid under s.135 UK Employment Rights Act 1996.

3.18 Employee Benefit Plans.

(a) Section 3.18(a) of the Disclosure Schedule contains a complete and accurate list of all Company Plans (including any employee benefit trusts), provided that, (1) only the Company’s forms of employment agreements, offer letters, consulting agreements and similar agreements shall be scheduled, unless such an employment agreement, offer letter, consulting agreement or similar agreement materially deviates from the Company’s form of such agreements; and (2) only the Company’s forms of agreements covering equity awards and share options shall be scheduled, unless such an individual agreement contains any terms and conditions that materially differ from such forms, and (3) only the Company’s forms of consulting Contracts shall be scheduled, unless such a Contract is not terminable without penalty on less than thirty (30) days’ notice. Save for the Company Plans, the Company has no obligations or liabilities (whether current, prospective, contingent or otherwise) to or in respect of a scheme or arrangement for the provision of Relevant Benefits or otherwise to provide Relevant Benefits. Complete and accurate copies of (i) all material Company Plans which have been reduced to writing, together with all amendments thereto, (ii) written summaries of all unwritten material Company Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, (iv) all annual reports and (for all funded plans) all plan financial statements for the last three (3) plan years for each Company Plan, (v) all reports regarding the satisfaction of the nondiscrimination requirements of Sections 410(b), 401(k), and 401(m) of the Code for the past three (3) years, (vi) all disclosures received by the Company with respect to ERISA Section 408(b)(2) or provided by a Company Plan pursuant to ERISA Section 404(a), and (vii) any non-routine written or electronic communications from or to any Governmental Entity with respect to a Company Plan (including any voluntary correction submissions), have been made available to the Buyer. No Company Plan is sponsored, maintained or administered by a professional employer organization (PEO), employee leasing organization or similar agency.

(b) Each Company Plan has been administered in accordance in all material respects with its terms and each Group Company and ERISA Affiliate has met its obligations with respect to each Company Plan and has timely made all required contributions thereto. Each Company Plan and each Group Company and their ERISA Affiliates with respect to each Company Plan are and have been in compliance with the applicable provisions of ERISA and the Code and the regulations thereunder and other applicable Law. All filings and reports as to each Company Plan required to have been submitted to any Governmental Entity have been timely submitted. There is no plan or commitment, whether legally binding or not, to create any additional Company Plans or to modify any existing Company Plans.

 

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(c) Any Company Plan currently or previously maintained or contributed to by any Group Company that is or was intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) has received a determination, opinion, or advisory letter from the IRS to the effect that such Company Plan is qualified and the plan and the trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code or is based on prototype or volume submitter documents that have received such letter, no such determination, opinion, or advisory letter has been revoked and revocation has not been threatened, and no such Company Plan has been amended since the date of its most recent determination, opinion, or advisory letter, or application therefor in any respect, and no act or omission has occurred, that would adversely affect its qualification or increase its cost. There has been no termination or partial termination of such a Company Plan. The Company 401(k) Plan has not had any material operational failures since inception that have not been corrected in accordance with applicable guidance. To the extent applicable, each Company Plan that is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the Code has been tested for compliance with, and satisfies the requirements of, Section 401(k)(3) and Section 401(m)(2) of the Code for each plan year ending prior to the Closing Date. Each Company Plan that provides for compliance with Section 404(c) of ERISA or is intended to comply with such provision, has so complied. Each Company Plan has complied with ERISA Section 408(b)(2) (or other applicable exemption) and with ERISA Section 404(a).

(d) Since January 1, 2017, there have been no actual or threatened Legal Proceedings (except claims for benefits payable in the normal operation of the Company Plans and proceedings with respect to qualified domestic relations orders) against or involving any Company Plan or asserting any rights or claims to benefits under any Company Plan that could give rise to any liability, including any complaint to the Pensions Advisory Service or to the Pensions Ombudsman, any complaint or report to or action instigated by the Regulator, and any proceedings under a plan’s internal dispute resolution procedure. No Company Plan is or within the last three (3) calendar years has been the subject of, or has received or provided notice that it is the subject of, examination by a Governmental Entity nor has it been a participant in a government sponsored amnesty, voluntary compliance or similar program.

(e) No Group Company or ERISA Affiliate has ever maintained or contributed to or had any actual or potential liability with respect to an Employee Benefit Plan that was ever subject to Section 412 of the Code or Title IV of ERISA. At no time has any Group Company or any ERISA Affiliate been obligated to contribute or had any actual or potential liability with respect to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), any “multiple employer plan” described in Section 413(c) of the Code, or any multiple employer welfare arrangement (within the meaning of Section 3(40) of ERISA).

(f) No Group Company has been an “associate” of or “connected” with an “employer” (within the meaning of the Pensions Act 2004) of an “occupational pension scheme” which is not a “money purchase scheme” (as such terms are defined in the Pension Schemes Act 1993). No Group Company has itself at any time prior to the date of this Agreement been such an employer, or participated in or had any liability in relation to a defined benefit pension scheme in any jurisdiction.

 

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(g) No employee or officer, and no former employee or officer, of the Company has any right (whether actual or contingent) to Relevant Benefits arising as a result of a transfer of their employment to the Company under either the Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended), or the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended).

(h) With respect to persons taxable in the United States, (i) each Group Company and any arrangement providing compensation to any such person is and has been in material compliance with Section 409A of the Code such that no such person has or has had liability for tax under Section 409A of the Code; (ii) no event has occurred that would be treated by Code Section 409A(b) as a transfer of property for purposes of Code Section 83; and (iii) no stock option or equity unit option granted under any Company Plan has an exercise price that has been or may be less than the fair market value of the underlying stock or equity units (as the case may be) as of the date such option was granted, or has any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition of such option.

(i) With respect to the Company Plans, there are no benefit obligations for which contributions have not been made or properly accrued and there are no benefit obligations that have not been accounted for by reserves, or otherwise properly footnoted in accordance with IFRS, on the Company Financial Statements. No Group Company has any liability for benefits (contingent or otherwise) under any Company Plan, except as set forth on the Company Financial Statements. The assets of each Company Plan that is funded are reported at their fair market value on the books and records of such Company Plan. No Company Plan that is funded has assets that include securities issued by any Group Company or any Affiliate or ERISA Affiliate.

(j) All group health plans of the Group Companies and any ERISA Affiliate comply and have complied with the requirements of COBRA, Code Section 5000, the Health Insurance Portability and Accountability Act, the Patient Protection and Affordable Care Act (“PPACA”), and any other comparable domestic or foreign Laws. No Group Company has received any notification from any Governmental Entity concerning potential liability under PPACA. No employee, officer, director or manager, or former employee, officer, director, or manager (or beneficiary of any of the foregoing) of any Group Company is entitled to receive any welfare benefits, including death or medical benefits (whether or not insured) beyond retirement or other termination of employment, other than cash severance (to the extent disclosed) or as required by applicable Law, and there have been no written or oral commitments inconsistent with the foregoing.

(k) No act or omission has occurred and no condition exists with respect to any Company Plan that would subject the Buyer (or an Affiliate thereof), any Group Company, any Affiliate, any ERISA Affiliate or any plan participant to (i) any material fine, penalty, Tax or liability of any kind imposed under applicable Law (except for Taxes due on payments of benefits in the Ordinary Course of Business) or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Company Plan, nor will the transactions contemplated by this Agreement give rise to any such liability.

 

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(l) Each Company Plan (other than bilateral agreements with individuals) is amendable and terminable unilaterally by the Group Company that is a party thereto or covered thereby at any time without liability or expense to any Group Company or such Company Plan as a result thereof (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto) and no Company Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Group Company that is a party thereto or covered thereby from amending or terminating any such Company Plan, or in any way limit such action. The investment vehicles used to fund the Company 401(k) Plan may be changed at any time without incurring a sales charge, surrender fee or other similar expense other than customary charges imposed on transactions within participant-directed accounts.

(m) No Company Plan or Contract covering any one or more individuals contains any provision or is subject to any applicable Law that, in connection with any of the transactions contemplated by this Agreement or upon related, concurrent or subsequent employment termination, or in combination with any other event, would (i) increase, accelerate or vest any compensation or benefit, except as required by Law with respect to the termination of any Company Plan pursuant to Section 6.8, (ii) require severance, termination or retention payments, (iii) provide any term of employment or compensation guaranty, (iv) forgive any Indebtedness, (v) require or provide any payment or compensation subject to Section 280G of the Code (and no such payment or compensation has previously been made), or (vi) promise or provide any Tax gross ups or indemnification. No equity holder, employee, officer or director of any Group Company has been promised or paid any bonus or incentive compensation related to the transactions contemplated hereby.

(n) There are no loans or extensions of credit from any Group Company or any ERISA Affiliate to any employee of or independent contractor to any Group Company.

(o) With respect to each employee benefit plan in the nature of a Company Plan that covers employees outside of the United States (each, a “Foreign Plan”):

(i) all material employer and employee contributions, including without limitation social security contributions, due to each Foreign Plan or to any Governmental Entity required by law or by the terms of such Foreign Plan to have been made have been made in full, or, if applicable, accrued for in accordance with normal accounting practices;

(ii) each Foreign Plan that is funded has no material unfunded liability, and no Foreign Plans are “defined benefit” pension plans (as defined in ERISA, whether or not subject to ERISA);

(iii) each Foreign Plan required to be registered has been registered and has been maintained in all material respects in good standing with applicable regulatory authorities;

(iv) all Relevant Benefits payable in the event of the death in service of an employee or officer are fully insured with a reputable insurance company authorized under the Financial Services and Markets Act 2000 with permission under Part 4A of that Act to effect and carry out contracts of long-term insurance; and

 

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(v) each Foreign Plan is otherwise in material compliance with applicable Law, including compliance with applicable Tax requirements to maintain Tax preferred status and any applicable provisions of the Pensions Act 2008 and laws prohibiting discrimination on the grounds of a protected characteristic (as set out in the Equality Act 2010).

3.19 Compliance with Laws. Each Group Company during the prior three (3) years has conducted, and is conducting, its business and operations in compliance in all material respects with all applicable Laws, including all applicable COVID-19 Measures. No Group Company has received any written (or, to the Companies’ Knowledge, other) notice or other written (or, to the Companies’ Knowledge, other) communication from any Governmental Entity alleging any noncompliance with any applicable Law, including any applicable COVID-19 Measures.

3.20 Unlawful Payments. Each Group Company is and has been in compliance with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., applicable laws passed pursuant to the Organization for Economic Cooperation and Development Convention Against Bribery of Foreign Public Officials in International Business Transactions, and all other applicable anti-corruption or bribery Laws in any jurisdiction in which such Group Company has conducted its business (collectively, “Anti-Bribery Laws”). No Group Company has received any written communication from any Governmental Entity that alleges that such Group Company, or any current or former Representatives thereof, is or may be in violation of, or has, or may have, any liability under, any Anti-Bribery Laws, and no such potential violation of Anti-Bribery Laws has been discovered by or brought to the attention of any Group Company. No Group Company has made or anticipates making any disclosures to any Governmental Entity for potential violations of Anti-Bribery Laws. To the Knowledge of the Companies, none of the Group Companies’ current or former Representatives is currently an officer, agent or employee of a Governmental Entity. None of the Group Companies nor any of their current or former officers, directors or employees, or, to the Knowledge of the Companies, agent or other Representative acting on their behalf has directly or indirectly offered, given, reimbursed, paid or promised to pay, or authorized the improper payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment) or any commission payment payable to (a) any Person who is an official, officer, agent, employee or representative of any Governmental Entity or of any existing or prospective customer (whether or not owned by a Governmental Entity), (b) any political party or official thereof, (c) any candidate for political or political party office or (d) any other Person affiliated with any such customer, political party or official or political office, in each case while knowing or having reason to believe that all or any portion of such money or thing of value would be offered, given, reimbursed, paid or promised, directly or indirectly, for purposes not allowable under the Anti-Bribery Laws, to any such official, officer, agent, employee, representative, political party, political party official, candidate, individual, or other Person affiliated with any such customer, political party or official or political office.

 

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3.21 Permits. Each Group Company holds all Permits that are necessary for the conduct of such Group Company’s business, except where the failure to have, or the suspension or cancellation of, any of the Permits would not, individually or in the aggregate, reasonably be expected to be material to such Group Company. Each such Permit is in full force and effect; the applicable Group Company is in compliance in all material respects with the terms of each such Permit; and, to the Knowledge of the Companies, no suspension or cancellation of such Permit is threatened.

3.22 Insurance. Section 3.22 of the Disclosure Schedule lists each insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) covering the assets, business, equipment, properties, operations, employees, officers and managers of any Group Company, or under which any Group Company is a named insured or otherwise the beneficiary of coverage, all of which are in full force and effect. There is no claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy. All premiums due and payable under all such policies have been paid and each Group Company is otherwise in compliance in all material respects with the terms of such policies. No Group Company has any Knowledge of any threatened termination of, or premium increase with respect to, any such policy.

3.23 Customers and Suppliers. Section 3.23 of the Disclosure Schedule sets forth a list of (a) top 40 customers or clients by revenue of the Group Companies during the last full fiscal year and the interim period through the Most Recent Balance Sheet Date and the amount of revenues accounted for by such customer or client during each such period (“Significant Customers”) and (b) each supplier that is the sole supplier of any product or service to any Group Company and each other supplier that is a top 20 supplier of the Group Companies by expenses during the last full fiscal year and the interim period through the Most Recent Balance Sheet Date and the amount of expenditures accounted for by such supplier during each such period (“Significant Suppliers”). No Significant Customer or Significant Supplier has provided written notice to any Group Company within the past year that it will stop, or decrease the rate of, buying materials, products or services or supplying materials, products or services, as applicable, to any Group Company.

3.24 Certain Business Relationships With Affiliates.

(a) No Affiliate of any Group Company (other than another Group Company): (i) owns any property or right, tangible or intangible, which is used in the business of any of the Group Companies, (ii) has any claim or cause of action against any of the Group Companies, (iii) owes any money to, or is owed any money by, any of the Group Companies, or (iv) except as set forth in Section 3.24(b) of the Disclosure Schedule, is a party to any Contract with any of the Group Companies (excluding employment Contracts).

(b) Section 3.24(b) of the Disclosure Schedule lists all material written Contracts and summaries of all material oral Contracts (i) between any Group Company and any Affiliate of such Group Company, and (ii) between any of the Group Companies, in each case, as of the date of this Agreement.

 

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3.25 Accounts Receivable. All accounts receivable of each Group Company reflected on the Most Recent Balance Sheet (other than those paid since such date) represent or will represent bona fide valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business. As of the date of this Agreement, no accounts receivable are older than ninety (90) days. To the Knowledge of the Companies, as of the date of this Agreement, the debtors to which the accounts receivable of the Group Companies relate are not in or subject to a bankruptcy or insolvency proceeding and none of such receivables has been subject to assignment for the benefit of creditors. No Group Company has received any written notice from an account debtor stating that any account receivable in an amount in excess of $5,000 is subject to dispute.

3.26 Government Contracts.

(a) No Group Company has been suspended or debarred from bidding on contracts or subcontracts with any Governmental Entity; no such suspension or debarment has been initiated or, to the Knowledge of the Companies, threatened; and the consummation of the transactions contemplated by this Agreement will not result in any such suspension or debarment of any Group Company or the Buyer of any of its Affiliates (assuming that no such suspension or debarment will result solely from the identity of the Buyer). No Group Company has been or is now being audited or investigated by the United States Government Accounting Office, the United States Department of Defense or any of its agencies, the Defense Contract Audit Agency, the contracting or auditing function of any Governmental Entity with which it is contracting, the United States Department of Justice, the Inspector General of the United States Governmental Entity, or any prime contractor with a Governmental Entity; nor, to the Knowledge of the Companies, has any such audit or investigation been threatened. To the Knowledge of the Companies, there is no valid basis for (i) the suspension or debarment of any Group Company from bidding on contracts or subcontracts with any Governmental Entity or (ii) any claim (including any claim for return of funds to the Governmental Entity) pursuant to an audit or investigation by any of the entities named in the foregoing sentence. No Group Company has any Contracts which require it to obtain or maintain a security clearance with any Governmental Entity.

(b) To the Knowledge of the Companies, no basis exists for the termination of, or a stop work order with respect to, any of its contracts or subcontracts with any Governmental Entity and no Group Company has any reason to believe that funding may not be provided under any contract or subcontract with any Governmental Entity in the upcoming federal fiscal year.

3.27 Brokers. Except for the fees of Linden Advisors and the Jordan, Edmiston Group, Inc., the fees and expenses of which are considered Company Transaction Expenses, no Group Company has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

3.28 Powers of Attorney. Except as set forth in Section 3.28 of the Disclosure Schedule, there are no outstanding powers of attorney executed on behalf of any Group Company.

3.29 Privacy.

(a) Each Group Company maintains complete, accurate and up to date records of all its Personal Data Processing activities, including any data protection impact assessments, to the extent required for compliance in all material respects with applicable Information Privacy and Security Laws.

 

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(b) Section 3.29(b) of the Disclosure Schedule identifies (by effective date) each posted, public facing website or product or data protection policy, statement or notice of any Group Company in effect at any time in the past three (3) years. Each Group Company has made available to the Buyer true and complete copies of all current and past Company Privacy Policies of such Group Company and any other written policies and procedures of any Group Company relating to the Processing and security of Personal Data. None of the Company Privacy Policies have contained or do contain any material omissions or any express or implied statements that are false, inaccurate, deceptive or misleading. The applicable Company Privacy Policy(ies) have at all times been made conspicuously available on each of the applicable products of the Group Companies (including all websites, applications, and other online services) in a manner readily available to visitors and current and potential customers and users that access such websites.

(c) Each Group Company has at all times in the past three (3) years complied in all material respects with all applicable Information Privacy and Security Laws, all of the Company Privacy Policies, and all their contractual obligations to any Person regarding privacy, data protection or data security in their Processing of Personal Data.

(d) Each Group Company has during the past three (3) years complied in all material respects with all applicable requirements under the Information Privacy and Security Laws relating to the cross-border transfer of Personal Data.

(e) Except as would not be material to the Group Companies, taken as a whole, where required by applicable Information Privacy and Security Laws, the Group Companies have a Data Processing Contract in place with any third party who Processes Personal Data on behalf of a Group Company that complies with the requirements of applicable Information Privacy and Security Laws.

(f) Any transfer of Personal Data by any Group Company under this Agreement, including transfers in connection with the transactions to be consummated by this Agreement and the other Transaction Documents, is and will be, without the necessity of obtaining consent from any Person, in compliance with the terms of all written disclosures that such Group Company has made to consumers, employees and other third parties and applicable Information Privacy and Security Laws. The Group Companies are not subject to any contractual requirements or other legal obligations governing the Processing of Personal Data that, following the Closing, would prohibit the Processing of Personal Data in the manner in which any Group Company Processed such Personal Data prior to the Closing.

(g) The Group Companies have not in the past three (3) years received any written (or, to the Companies’ Knowledge, other) notice of any claims, audits, investigations by regulatory authorities or any data protection authorities, or written allegations of violations of Information Privacy and Security Laws by any Group Company from any regulatory authority or data protection authority with respect to Personal Data Processed by, or under the control of, any Group Company, or any other communication from a regulatory body or data protection authority relating to any actual or potential violation by the Group Companies of Information Privacy and Security Laws. No Group Company or, to the Knowledge of the Companies, their respective customers, has received any written (or, to the Companies’ Knowledge, other) complaints or claims or other communication from any Person in the past three (3) years alleging any violation of applicable Information Privacy and Security Laws by any Group Company with respect to the Processing of Personal Data by any Group Company.

 

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(h) The Group Companies have no Knowledge of any fact or circumstances occurring in the past three (3) years which would reasonably be expected to lead to any such notice, request, correspondence, audit, communication, claim, complaint or enforcement action as described in Section 3.29(g).

(i) Each Group Company has complied in the past three (3) years with all valid data subject requests under Information Privacy and Security Laws, including any requests for access to Personal Data, the cessation of specified processing activities or the rectification or erasure of any Personal Data, in each case in accordance with the requirements of the applicable Information Privacy and Security Laws, and there are no such requests outstanding at the date of this Agreement.

(j) Except as would not be material to the Group Companies, taken as a whole, each Group Company has during the past three (3) years established and is in compliance in all material respects with a written information security program in compliance in all material respects with all applicable Information Privacy and Security Laws (including in relation to off-site working where applicable) that: (i) includes reasonable and appropriate administrative, technical and physical safeguards designed to safeguard the security, confidentiality, and integrity of Company Data in the possession or otherwise in the operation control of the Group Companies; (ii) protects against unauthorized access to the Internal Systems and Company Data in the possession or otherwise in the operational control of the Group Companies; and (iii) provides for the back-up and recovery of material Company Data Processed using Internal Systems without substantial disruption or interruption to the conduct of such Group Company’s respective businesses. Except as would not be material to the Group Companies, taken as a whole, each Group Company has, during the past three (3) years, complied in all material respects with such information security program and has implemented the appropriate technical and organizational measures to comply in all material respects with that information security program. In the past three (3) years (1) no Group Company nor, to the Knowledge of the Companies, any third party acting on their behalf with respect to Processing Personal Data provided by any Group Company, has suffered or incurred a Data Security Incident, and (2) to the Knowledge of the Companies, no Group Company has notified, or been required to notify, any Person of any Data Security Incident.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Sellers that the statements contained in this Article IV are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date):

 

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4.1 Organization, Standing and Power. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the state of its incorporation. The Buyer has all requisite power and authority (corporate and other) to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Buyer is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to result in a Buyer Material Adverse Effect.

4.2 Authority; No Conflict; Required Filings and Consents.

(a) The Buyer has all requisite power and authority to execute and deliver this Agreement and each other Transaction Document to which it is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery by the Buyer of this Agreement and each other Transaction Document to which it is or will be a party and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Buyer. This Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against it in accordance with its terms. Each other Transaction Document to which the Buyer is or will be a party has been or will be as of the Closing Date duly and validly executed and delivered by the Buyer and constitutes or will constitute a valid and binding obligation of the Buyer, enforceable against it in accordance with its terms.

(b) Subject to compliance with the HSR Act, neither the execution and delivery by the Buyer or of any Transaction Document to which it is or will be a party, nor the performance by the Buyer of its obligations hereunder or thereunder, nor the consummation by the Buyer of the transactions contemplated hereby or thereby, will (i) conflict with or violate any provision of the charter or by-laws of the Buyer, (ii) require on the part of the Buyer any Permit or any filing with any Governmental Entity, (iii) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any Contract or Permit, to which the Buyer is a party or by which it is bound or to which any of its assets are subject, or (iv) violate any Order or Law applicable to the Buyer or any of its properties or assets, except in the case of the foregoing clauses (iii) and (iv) for such notices, consents and waivers that, if not obtained or made, and such conflicts, breaches, defaults, accelerations, terminations, modifications, cancellations and violations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Buyer Material Adverse Effect.

(c) Subject to compliance with the HSR Act, no Permit or Order of, or declaration, notice or filing with, any Governmental Entity is required by or with respect to the Buyer in connection with the execution and delivery of this Agreement by the Buyer or the consummation by the Buyer of the transactions contemplated by this Agreement.

(d) There is no Legal Proceeding which is pending or has been threatened in writing against Buyer or any of its Affiliates that questions the validity of this Agreement or any action taken or to be taken by such Buyer in connection herewith or that could reasonably be expected to have a material adverse effect on the Buyer’s ability to consummate the transactions contemplated by the Transaction Documents.

 

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4.3 Financial Ability. As of the Closing Date and as of the Closing, the Buyer shall have available to it all funds necessary (without giving effect to any unfunded financing regardless of whether such financing is committed) to consummate the transactions contemplated by this Agreement and to pay the Aggregate Closing Consideration, all fees incurred in connection with the Financing, and all other cash amounts required to be paid at or in connection with the Closing in connection with the transactions contemplated by this Agreement, and, when so required to pay or otherwise perform, as applicable, the Buyer shall be able to pay or otherwise perform its obligations under this Agreement. The Buyer has not incurred, and as of the Closing will not have incurred, any obligation, condition, commitment, restriction or liability of any kind that would impair or adversely affect such resources and capabilities.

4.4 No Additional Representations; Disclaimer. The Buyer acknowledges and agrees that none of the Sellers, the Group Companies, any of their Affiliates or any Representatives of any of the foregoing (a) has made (and the Buyer and its Affiliates hereby disclaim reliance on) any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Group Companies or their respective business or assets, except as expressly set forth in Article III and Article IV and qualified by the Disclosure Schedule, or (b) will have or be subject to any liability or obligation to the Buyer or any other Person resulting from the distribution to the Buyer or any of its Affiliates, or the Buyer’s or any of its Affiliates’ use of, any such information, including any information, document or material made available to the Buyer or its Affiliates or any of their Representatives in the Group Companies’ electronic data room, management presentations or any other form in connection with the transactions contemplated hereby or otherwise. In connection with the Buyer’s and its Affiliates’ investigation of the Group Companies, the Buyer and its Affiliates have received from or on behalf of the Group Companies certain projections, including projected statements of operating revenues and income from operations of the Group Companies and certain business plan information of the Company. The Buyer acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts and plans, that the Buyer and its Affiliates are familiar with such uncertainties, that the Buyer and its Affiliates are taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates, projections and other forecasts and plans so furnished to them (including the reasonableness of the assumptions underlying such estimates, projections and forecasts), and, subject to the following sentence, that the Buyer and its Affiliates shall have no claim against any of the Sellers, the Group Companies, any of their Affiliates or any Representatives of the foregoing with respect thereto. Notwithstanding the foregoing, nothing in this Section 4.4 or elsewhere in this Agreement shall (i) limit or impair, or constitute a waiver of, any right or remedy of Buyer in cases of Fraud, (ii) relieve any Person of any liability or obligation for Fraud or (iii) preclude Buyer from asserting any claim based on Fraud, in each case whether or not such Fraud is based on any representation or warranty set forth in this Agreement or otherwise.

 

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Article V

CONDUCT OF BUSINESS

5.1 Operation of Business. Except as expressly contemplated by this Agreement, for COVID-19 Measures, or otherwise required by applicable Laws, during the Pre-Closing Period, the Company shall, and shall cause each other Group Company to, conduct its operations only in the Ordinary Course of Business and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, preserve its physical assets and keep them in working condition, keep available the services of its current officers and employees and preserve its relationships with material customers, suppliers and others having material business dealings. Without limiting the generality of the foregoing (except as expressly contemplated by this Agreement, for COVID-19 Measures, or as otherwise required by applicable Laws) during the Pre-Closing Period the Company shall not, and shall cause each other Group Company not to, without the prior written consent of the Buyer (which such consent shall not be unreasonably withheld, conditioned or delayed):

(a) issue or sell any Equity Interests or other securities of any Group Company or any options, warrants or rights to acquire any such Equity Interests or other securities, or repurchase or redeem any Equity Interests or other securities of any Group Company (other than issuances in connection with the exercise, exchange or conversion of Equity Interests that are outstanding as of the execution and delivery of this Agreement and strictly in accordance with the terms thereof);

(b) split, combine or reclassify any Equity Interests of such Group Company;

(c) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of its Equity Interests; or modify such Group Company’s corporate form;

(d) create, incur or assume any Indebtedness for borrowed money; assume, guarantee, or endorse the obligations of any other Person (other than another member of the Group Company); or make any loans, advances or capital contributions to, or investments in, any other Person (other than to another Group Company);

(e) hire or appoint any new directors or officers or, except in the Ordinary Course of Business, hire any new employees or consultants;

(f) terminate the employment of any Key Company Employee, except in the Ordinary Course of Business and other than for Cause;

(g) except as required to comply with applicable Law, the terms of this Agreement or required by Contracts existing on the date hereof and disclosed in Section 5.1(g) of the Disclosure Schedule, (i) adopt, enter into, terminate or amend any employment or severance plan or Contract, any Company Plan or any collective bargaining agreement (other than employment Contracts with non-officer new hires in the Ordinary Course of Business), (ii) increase the compensation or fringe benefits of, or pay any bonus to, any director, officer,

 

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employee or consultant, (iii) pay any benefit not provided for as of the date of this Agreement under any Company Plan, (iv) grant any new awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of equity or equity-based compensation, or the removal of existing restrictions (other than vesting) in any benefit plans or agreements or awards made thereunder, (v) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, (other than with respect to outstanding Company Options), or (vi) take any action (other than in the Ordinary Course of Business) to fund or in any other way secure the payment of compensation or benefits under any Company Plan or Contract (other than any acceleration of vesting with respect to outstanding Company options);

(h) acquire, sell, lease, license or dispose of any material assets or property (including any shares or other equity interests in or securities of any other corporation, partnership, association or other business organization or division thereof), other than (i) sales of assets to customers in the Ordinary Course of Business or (ii) issuances of Equity Interests in connection with the exercise, exchange or conversion of Equity Interests that are outstanding as of the execution and delivery of this Agreement in accordance with the terms thereof;

(i) mortgage, pledge, or grant any Lien (other than Permitted Liens), on any material property or assets;

(j) amend its Organizational Documents;

(k) sell, assign, transfer, license or sublicense any Company Intellectual Property (other than pursuant to non-exclusive licenses with customers entered into in the Ordinary Course of Business);

(l) change the nature of its business being carried on as of the date of this Agreement or commence any new business not being ancillary or incidental to such business;

(m) change its accounting methods, principles or practices, except insofar as may be required by applicable Law or the Accounting Standards;

(n) make or change any Tax election outside of the Ordinary Course of Business, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitations with respect to material Taxes, settle or compromise any material Tax liability, claim or assessment, or surrender any right to claim a material refund of Taxes;

(o) except in the Ordinary Course of Business, enter into, amend, terminate or waive any rights under, any Contract of a nature required (or, if entered into prior to the date hereof, would be required) to be listed in Section 3.12(b), Section 3.13 or Section 3.14 of the Disclosure Schedule;

(p) make or commit to make any capital expenditure in excess of $10,000 per item or $50,000 in the aggregate;

 

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(q) institute or settle any Legal Proceeding, except for the routine collection of accounts receivable in the Ordinary Course of Business;

(r) agree in writing or otherwise to take any of the foregoing actions.

In addition, during the Pre-Closing Period, the Company shall, and shall cause each other Group Company to, (A) accept customer orders in the Ordinary Course of Business, and (B) continue to make regularly scheduled payments pursuant to the terms of any Contract with respect to any Indebtedness for borrowed money, if any, in existence as of the date of this Agreement.

5.2 Confidentiality. The parties acknowledge that the Buyer and the Company have previously executed the Confidentiality Agreement, which Confidentiality Agreement shall continue in full force and effect in accordance with its terms, except as expressly modified herein.

Article VI

ADDITIONAL PRE-CLOSING AGREEMENTS

6.1 No Solicitation.

(a) During the Pre-Closing Period, none of the Participating Sellers nor the Company shall, shall permit any other Group Company, or shall instruct any of their respective officers, directors, employees, representatives or agents to, directly or indirectly, through any officer, director, employee, Affiliate, agent or representative or otherwise, (i) initiate, solicit, knowingly encourage or otherwise knowingly facilitate any inquiry, proposal, offer or discussion with any party (other than the Buyer, its Affiliates, or their representatives) concerning any acquisition, equity or debt financing, joint venture, merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, share or stock sale, sale of assets or similar business transaction with respect to the Group Companies, (ii) furnish any information concerning the business, Properties or assets of any Group Company or the Equity Interests of any Group Company to any party (other than the Buyer or its representatives) in furtherance of any such transaction, or (iii) engage in negotiations or enter into any Contract with any party (other than the Buyer or its representatives) concerning any such transaction.

(b) The Company shall immediately notify any party with which discussions or negotiations of the nature described in Section 6.1(a) were pending at the date of entry into this Agreement that the Group Companies are terminating such discussions or negotiations. If any Participating Seller or any Group Company receives any inquiry, proposal or offer of the nature described in Section 6.1(a), the Company shall promptly, within two (2) Business Day after such receipt, notify the Buyer of such inquiry, proposal or offer.

6.2 Access to Information.

(a) During the Pre-Closing Period, the Company shall, and shall cause each of the other Group Companies to, afford the officers, attorneys, accountants, tax advisors, lenders and other authorized representatives of the Buyer reasonable access upon reasonable advance notice and during normal business hours to all personnel, offices, Properties, assets, books and

 

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records of each Group Company, so that the Buyer may have a reasonable opportunity to investigate the management, business, Properties, assets and affairs of such Group Company, and the Buyer shall be permitted to make abstracts from, or copies of, all such books and records; provided, however, that the foregoing right of access shall not require furnishing information that, (a) in the reasonable opinion of counsel, would violate any Law or result in the waiver of any attorney-client privilege, work product doctrine or other applicable privilege applicable to such documents or information that cannot be preserved with a customary common interest or similar agreement, or (b) would violate or cause a default under, or give a third party the right to terminate or accelerate the rights under, any Contract. In addition, any access to Properties shall be subject to the Company’s reasonable security measures and the applicable requirements of the applicable leases and shall not include the right to perform any “invasive” testing or soil, air or groundwater sampling, including, without limitation, any Phase I or Phase II environmental assessments.

(b) The Company shall, if requested by the Buyer, introduce the Buyer to customers and suppliers of the Group Companies for the purpose of facilitating the post-Closing integration of the Business into the business of the Buyer following the time on which the parties to this Agreement make a press release or public announcement with respect to the consummation of the transactions contemplated by Agreement in accordance with Section 6.5.

6.3 Closing Efforts; Legal Conditions to the Transactions Contemplated by this Agreement; Third-Party Consents.

(a) Each of the Buyer, and the Company shall use its Reasonable Best Efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including using its Reasonable Best Efforts to ensure that the conditions to the obligations of the other parties to consummate the transactions contemplated by this Agreement are satisfied.

(b) Each of the Buyer, the Company and the Participating Sellers shall use its Reasonable Best Efforts to obtain, at its expense, all Permits, and to effect all registrations, filings and notices with or to Governmental Entities, as may be required for such party to consummate the transactions contemplated by this Agreement to otherwise comply with all applicable Laws in connection with the consummation of the transactions contemplated by this Agreement, and to otherwise cause the cause the satisfaction of the closing conditions.

(c) The Company shall, and shall cause each other Group Company to, use its Reasonable Best Efforts to obtain all such waivers, consents or approvals from third parties that are required pursuant to the Contracts set forth on Section 6.3(c)(i) of the Disclosure Schedule or that are otherwise reasonably requested by the Buyer, and to give all such notices to third parties that are required pursuant to the Contracts set forth on Section 6.3(c)(ii) of the Disclosure Schedule or that are otherwise reasonably requested by the Buyer. Notwithstanding anything in this Section 6.3 to the contrary, no Group Company shall be required to pay (or agree to pay) any consent or other similar fee, “profit sharing” or other similar payment or other consideration (including increased rent or other similar payments or any amendments, supplements or other modifications to (or waivers of) the existing terms of any Contract), or the provision of additional security (including a guaranty) to obtain the consent, waiver or approval of any Person under any Contract unless reimbursed in full by the Buyer and without cost or adverse effect to the Sellers.

 

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(d) Buyer shall use its Reasonable Best Efforts to complete the Financing as promptly as practicable after the date of this Agreement.

(e) The Company shall use its Reasonable Best Efforts to cause each Seller who is not an Initial Participating Seller to become a Participating Seller as promptly as practicable after the date of this agreement and in any event prior to the Closing.

6.4 Financing Cooperation.

(a) Prior to the Closing, the Company shall, shall cause the other Group Companies to, and shall instruct their respective Representatives to, on a timely basis (at the Buyer’s sole cost and expense) provide such reasonable cooperation as may be reasonably requested by the Buyer in connection with the arrangement, marketing, syndication and consummation of the Financing by the Buyer as may be reasonably requested by the Buyer and the Financing Entities in connection with the Financing, including using its commercially reasonable efforts to: (i) assist in preparation for marketing efforts (including lender and investor meetings and calls), other meetings and due diligence sessions (including accounting due diligence sessions) and sessions with prospective lenders and investors; (ii) assist in the preparation of confidential information memoranda, offering memoranda and similar marketing documents for the Financing; (iii) as promptly as reasonably practicable, inform the Buyer if any officer the Company or any Group Company shall have knowledge of any facts that would likely require the restatement of the Company Financial Statements; (iv) to the extent not provided prior to the date hereof, provide as promptly as is reasonably practicable the Company Financial Statements (which shall be consistent in all material respects with the Draft Company Financial Statements) and any information reasonably requested by Buyer in writing in connection with Buyer’s preparation of pro forma financial information and financial statements; (v) directing the chief financial officer or any other officer with appropriate authority of any Group Company to execute and deliver on behalf of any Group Company (but not to be effective before the Closing) any pledge and security documents, other definitive financing documents, or other certificates, or documents, in each case as may be reasonably requested by the Buyer in connection with the Financing and otherwise facilitate the pledging of collateral (including cooperation in connection with the pay-off of any debt and the release of related Liens and termination of security interest); (vi) take all corporate actions, subject to the occurrence of the Closing, reasonably requested by the Buyer that are necessary to permit the consummation of the Financing and to permit the proceeds thereof to be made available on the Closing Date to consummate the transactions contemplated hereby; and (vii) provide at least five (5) Business Days prior to the Closing Date all documentation and other information about the Company and any Group Company as is required by applicable “know your customer” and anti-money laundering rules and regulations including the USA PATRIOT Act to the extent requested at least eight (8) Business Days prior to the anticipated Closing Date. The Company hereby consents to the use of the logos of the Company and the other Group Companies solely in connection with the Financing. Prior to the Closing, the Company shall, and shall cause the other Group Companies to, use its commercially reasonable efforts to cause its independent auditors to provide, consistent with customary practice, (A) reasonable assistance in the preparation of pro forma financial statements and (B) reasonable assistance and cooperation to the Buyer, including attending accounting due diligence sessions.

 

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(b) Notwithstanding any provision herein to the contrary, (i) such cooperation described in Section 6.4(a) shall not (A) unreasonably disrupt the operations of the Group Company, (B) require any Group Company or any of their respective directors, members, managers or officers to pass resolutions or consents, or approve or authorize the execution of, or execute any document, agreement, certificate or instrument or take any other corporate action with respect to the Financing unless effective no earlier than (and conditioned upon) the Closing, or (C) require any Group Company to provide any projections or other forward-looking financial information or financial data, or any historical financial statements that is not readily available as of the execution and delivery of this Agreement, (ii) no Group Company shall be required to (A) pay any commitment or other similar fee prior to the Closing unless reimbursed in full by the Buyer at or prior to the Closing or (B) incur or assume any liability in connection with the Financing prior to the Closing unless effective no earlier than (and conditioned upon) the Closing, and (iii) the Group Companies and their respective directors, managers, officers or employees shall not be required to execute, deliver or enter into, or perform any contract, agreement, document or instrument with respect to the Financing unless effective no earlier than (and conditioned upon) the Closing; provided that the Buyer shall reimburse the Company in full for its reasonable and documented out of pocket costs and expenses incurred in connection with such cooperation at or prior to the Closing.

(c) The Buyer shall indemnify, defend, and hold harmless the Group Companies and their respective officers, employees, directors, advisors and other representatives from and against any and Damages and reasonable and documented out-of-pocket expenses suffered or incurred by them in connection with the Financing and the Group Companies’ assistance in connection with the Financing and any information utilized in connection therewith except to the extent such Damages arose out of or resulted from the gross negligence, Fraud or intentional misrepresentation of the Group Companies or their respective officers, employees, directors, advisors and other representatives.

(d) The Buyer expressly acknowledges and agrees that the Closing shall in no way be conditioned on or subject to its receipt of the Financing (or any portion thereof).

6.5 Public Disclosure. No party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other parties; provided, however, that any party may make any public disclosure it believes in good faith is required by applicable Law or stock market rule (in which case the disclosing party shall use Reasonable Best Efforts to advise (i) the Company in the event that the disclosing party is the Buyer or (ii) the Buyer in the event the disclosing party is any Group Company or any Seller, and provide the applicable advised party with a copy of the proposed disclosure prior to making the disclosure); provided that the foregoing shall limit the ability of any Seller who is (or is an Affiliate) of a professional investment fund from making any disclosure to its and its Affiliates’ investors, partners or limited partners who are subject to duties of confidentiality in the Ordinary Course of Business. Notwithstanding anything to the contrary set forth herein or in the Confidentiality Agreement, the Buyer shall be permitted to (i) disclose nonpublic or otherwise

 

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confidential information regarding the Group Companies to Financing Parties, and to rating agencies and prospective lenders and investors during syndication of the Financing subject to their entering into customary confidentiality undertakings with respect to such information (including through a notice and undertaking in a form customarily used in confidential information memoranda for senior credit facilities), and (ii) publicly disclose, including by filing or furnishing one or more Current Reports on Form 8-K, the Company Financial Statements and pro forma financial information provided to any Financing Party under any confidential information memoranda or other syndication materials or similar documents prepared in connection with the Financing.

6.6 Notification of Certain Matters. During the Pre-Closing Period, (a) the Company shall promptly deliver to the Buyer notice (including a reasonably detailed description) of (i) any fact, circumstance or development that constitutes any material breach of any representation, warranty or covenant set forth in Article II or Article III that would cause the conditions set forth in Section 7.1(c) or Section 7.1(d), as applicable, to not be satisfied and (ii) or the non-satisfaction of any other condition set forth in Section 7.1 and (b) the Buyer shall promptly deliver to the Company notice (including a reasonably detailed description) of (i) any fact, circumstance or development that constitutes any material breach of any representation, warranty or covenant set forth in Article IV that would cause the conditions set forth in Section 7.2(a) or Section 7.2(d), as applicable, to not be satisfied and (ii) or the non-satisfaction of any other condition set forth in Section 7.2. No such notice shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation, warranty, covenant or condition in this Agreement or the Disclosure Schedule.

6.7 280G Covenant. Not less than three (3) Business Days prior to the Closing Date, the Group Companies shall submit to an equity holder vote, in a manner that satisfies the stockholder approval requirements under Section 280G(b)(5)(B) of the Code and the Treasury Regulations promulgated thereunder, the right of any “disqualified individual” (as defined in Section 280G(c) of the Code) to receive any and all payments (or other benefits) contingent on the consummation of the transactions contemplated by this Agreement (within the meaning of Section 280G(b)(2)(A)(i) of the Code) to the extent necessary so that no payment received by such “disqualified individual” shall be a “parachute payment” under Section 280G(b) of the Code (determined without regard to Section 280G(b)(4) of the Code). Such vote shall establish the disqualified individual’s right to the payment or other compensation, and the Group Companies shall obtain any required waivers or consents from the disqualified individual prior to the vote. In addition, the Group Companies shall provide adequate disclosure to equity holders of all material facts concerning all payments to any such disqualified individual that, but for such vote, could be deemed “parachute payments” under Section 280G of the Code in a manner that satisfies Section 280G(b)(5)(B)(ii) of the Code and regulations promulgated thereunder. At least five (5) Business Days prior to the vote, the Buyer and its counsel shall be given the right to review and comment on all documents required to be delivered to the equity holders in connection with such vote and any required disqualified individual waivers or consents, and the Group Companies shall reflect all comments of the Buyer or its counsel thereon. The Buyer and its counsel shall be provided copies of all documents executed by the equity holders and disqualified individuals in connection with the vote.

 

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6.8 Termination of Qualified Plan and other Benefits. Prior to the Closing Date, the Group Companies shall terminate: (a) the Company 401(k) Plan and (b) any other Company Plan requested by the Buyer at least four (4) Business Days prior to the Closing Date, unless, in the case of clause (a), the Buyer, in its sole and absolute discretion, provides the Company with written notice not to so terminate the Company 401(k) Plan at least three (3) Business Days prior to the Closing Date. Any termination of the Company 401(k) Plan must be reflected in resolutions of the Company’s board of directors entered into and effective no later than the day before the Closing Date, and the termination of any other Company Plans must be on the timing specified by the Buyer. The Company shall deliver to the Buyer, prior to the Closing Date, evidence that the resolutions have been adopted and the foregoing actions have been taken (the form and substance of which resolutions shall be subject to prior review and approval of the Buyer at least three (3) Business Days (or such shorter period as applies between the Buyer’s notice of termination of a Company Plan and the Closing Date)) before action is taken.

6.9 Indemnification of Officers and Directors.

(a) The Buyer shall cause the Group Companies to honor and fulfill in all respects the obligations of the Group Companies under any and all indemnification agreements listed on Section 6.9(a) of the Disclosure Schedule between the Group Companies and any of their current or former directors, managers and officers and any person who becomes a director, manager or officer of the Group Companies prior to the Closing (the “D&O Indemnitees”). In addition, during the period commencing on the Closing Date and ending on the sixth anniversary of the Closing Date, the Buyer shall (and the Buyer shall cause the Group Companies to) cause the Organizational Documents of the Group Companies to contain provisions with respect to indemnification, exculpation and the advancement of expenses that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions contained in the Organizational Documents of the Group Companies as of the date hereof, and during such six-year period, such provisions shall not be repealed, amended or otherwise modified in any manner to make such terms less favorable to the D&O Indemnitees, except as required by applicable Law.

(b) Prior to the Closing, notwithstanding anything to the contrary set forth in this Agreement, the Company will (at its own expense) purchase a six-year “tail” prepaid policy on the Group Companies’ current directors’ and officers’ liability insurance. The Buyer shall (and shall cause the Group Companies to) maintain such “tail” policy in full force and effect and continue to honor their respective obligations thereunder, for so long as such “tail” policy shall be maintained in full force and effect.

(c) If Buyer or any of the Group Companies, or any of its or their successors or assigns shall (i) consolidate with or merge into any other Person and shall not be the continuing or surviving company or entity of such consolidation or merger, or (ii) transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of the Buyer and the Group Companies shall assume all of the obligations of the Buyer and the Group Companies set forth in this Section 6.9.

 

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(d) The obligations set forth in this Section 6.9 shall not be terminated, amended or otherwise modified in any manner that adversely affects any D&O Indemnitee (or any other person who is a beneficiary under the “tail” policy referred to in Section 6.9(b) (and their heirs and representatives)) without the prior written consent of such affected D&O Indemnitee or other person who is a beneficiary under the “tail” policy referred to in Section 6.9(b) (and their heirs and representatives). Each of the D&O Indemnitees or other persons who are beneficiaries under the “tail” policy referred to in Section 6.9(b) (and their heirs and representatives) are intended to be third party beneficiaries of this Section 6.9(b), with full rights of enforcement as if a party thereto. The rights of the D&O Indemnitees (and other persons who are beneficiaries under the “tail” policy referred to in Section 6.9(b) (and their heirs and representatives)) under this Section 6.9(b) shall be in addition to, and not in substitution for, any other rights that such persons may have under the Organizational Documents, any and all indemnification agreements of or entered into by the Group Companies, or applicable Law (whether at law or in equity).

(e) Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Group Companies for any of their directors, officers or other employees, it being understood and agreed that the indemnification provided for in this Section 6.9 is not prior to or in substitution for any such claims under such policies

6.10 R&W Policy. At or prior to the Closing, the Buyer shall have the right to obtain and cause to be bound the R&W Policy on substantially the terms and conditions set forth on Schedule 6.10. Buyer shall use its Reasonable Best Effort to ensure that the R&W Policy includes an express and irrevocable waiver of any and all rights of subrogation which the insurer(s) and underwriter(s) under the R&W Policy may otherwise have against the Sellers save in the case of fraud. If the Buyer obtains the R&W Policy, the Buyer shall deliver to the Sellers on or prior to the Closing an extract of the signed R&W Policy evidencing the terms of such waiver. Prior to the Closing, the Sellers and the Group Companies shall use commercially reasonable efforts to provide the Buyer and its respective Representatives such reasonable cooperation as may reasonably be requested by the Buyer in connection with the Buyer’s obligations under this Section 6.10, including by providing such information, documents, and other due diligence materials as reasonably requested by the Buyer (provided, that the Sellers and the Group Companies shall not be required to incur any liability or make any payments in connection with such cooperation other than the payment of reasonable, out-of-pocket and documented costs which will be reimbursed by the Buyer).

Article VII

CONDITIONS TO CLOSING

7.1 Conditions to Obligations of the Buyer. The obligation of the Buyer to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions precedent, each of which may be waived in writing in the sole discretion of the Buyer:

(a) all applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or otherwise been terminated;

 

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(b) no Order enacted by a Governmental Entity of competent jurisdiction shall be in effect, and no Legal Proceeding by a Governmental Entity of competent jurisdiction shall be pending, that would prevent consummation of the transactions contemplated by this Agreement;

(c) (i) the Fundamental Representations contained in Section 3.1, Section 3.2(a), Section 3.2(b), Section 3.4(a), Section 3.4(b)(ii) and Section 3.27: (A) that are qualified by reference to the words “material”, “materiality”, or “Company Material Adverse Effect” shall be true and correct in all respects as of the date hereof and as of the Closing as though made as of the Closing (except for such representations and warranties that speak specifically as of another date, which shall be true and correct in all respects as of such date); and (B) that are not qualified by reference to the words “material”, “materiality”, or “Company Material Adverse Effect” shall be true and correct in all material respects as of the date hereof and as of the Closing as though made as of the Closing (except for such representations and warranties that speak specifically as of another date, which shall be true and correct in all material respects as of such date); and (ii) all other representations and warranties of Group Companies and the Participating Sellers set forth in Article II or Article III of this Agreement shall be true and correct in all respects as of the date hereof and as of the Closing as though made as of the Closing (except for such representations and warranties that speak specifically as of another date, which shall be true and correct in all respects as of such date), except for inaccuracies of representations or warranties the circumstances giving rise to which, individually or in the aggregate, have not had a Company Material Adverse Effect;

(d) the Group Companies and the Participating Sellers shall have performed or complied in all material respects with their agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(e) there shall have occurred since the date hereof no Change that, individually or taken together with all other Changes, has had a Company Material Adverse Effect;

(f) the Buyer shall have received evidence, in form and substance reasonably satisfactory to the Buyer, that the Group Companies have obtained all of the waivers or Permits (including all consents and authorizations), and effected all of the registrations, filings and notices, set forth on Schedule 7.1(f);

(g) the Buyer shall have received evidence, in form and substance reasonably satisfactory to the Buyer, that (i) the Contracts between any Group Company, on the one hand, and any Seller (or Affiliate thereof), on the other hand, listed on Schedule 7.1(g) shall have been satisfied and discharged in full and otherwise terminated, in each case without any liability to any Group Company or the Buyer and (ii) upon payment of the amounts reflected in the Closing Payment Certificate all obligations of any Group Company under any arrangement between any Group Company and any Person identified in Section 3.27 of the Disclosure Schedule will be satisfied and discharged in full without further obligations on the part of any Group Company;

(h) there shall have been delivered to the Buyer Stock Transfer Forms, and Voting Powers of Attorney in respect of all of the Company Shares in issue as at Closing duly executed by the applicable registered shareholder, in favor of the Buyer or its nominee(s) together with the relevant Certificates in the names of each such registered shareholders;

 

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(i) the Buyer shall have received copies of the resignations, effective as of the Closing and in form agreed between the Buyer and the Company as of the date hereof, of each director of each Group Company who the Buyer designates by written notice to the applicable Group Company at least three (3) Business Days prior to the Closing;

(j) each of the Key Personnel Arrangements shall not have been rescinded by the applicable Key Personnel and (ii) each of the Key Personnel shall not have provided notice of their intent to terminate, employment;

(k) the Buyer shall have received a counterpart or counterparts of the Escrow Agreement executed by the Escrow Agent and the Equityholder Representative;

(l) the Buyer shall have received (i) a signed copy of each Option Exercise Agreement from each holder of In-the-Money Company EMI Options and (ii) evidence in form and substance reasonably satisfactory to the Buyer that each other Company Option has either (A) lapsed and expired in the ordinary course prior to the Closing, (B) been exercised in full prior to the Closing (and that the holder of the Company Shares issued upon exercise thereof is a Participating Seller) or (C) will, as of the Closing, be canceled in accordance with this Agreement;

(m) the Buyer shall have received duly executed written instruments or deeds releasing any Lien on any asset of any Group Company and authorizing the filing of UCC-3 termination statements (or other comparable documents) for all UCC-1 financing statements (or other comparable documents) filed in connection with any Lien;

(n) the Buyer shall have received certificates of good standing of each Group Company in their jurisdictions of organization (where applicable as a legal concept);

(o) the Buyer shall have received the Company Certificate;

(p) the Buyer shall have received the registers of allotment, transfers, members, directors and officers, beneficial owners (in each case properly written up to the time immediately prior to the Closing);

(q) each holder of a Company Share shall be a Participating Seller;

(r) the Buyer shall have received from the Company a certification that the Company Shares are not United States real property interests as defined in Section 897(c) of the Code, together with a notice to the Internal Revenue Service (which shall be filed by the Buyer with the Internal Revenue Service following the Closing), in accordance with Treasury Regulations under Sections 897 and 1445 of the Code;

(s) each Seller Restrictive Covenant Agreement shall not have been rescinded by the applicable Seller;

(t) no later than five (5) Business Days prior to the Closing, the Company shall have delivered to the Buyer Company Financial Statements that are consistent in all material respects with the Draft Company Financial Statements;

 

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(u) the Buyer shall have received a copy of the minutes of a meeting (or resolutions) of the board of directors of each Group Company (such copy minutes being certified as correct by the chairman of the relevant meeting or the secretary of the relevant body corporate) at which:

(i) in the case of the Company only, the transfers of the Company Shares at the Closing are approved for registration and registered (subject to those transfers being duly stamped);

(ii) in the case of the Company only, the resolutions referred to in Section 1.9, in respect of the Company Options, were duly adopted;

(iii) the resignations referred to in Section 7.1(i) are tendered and accepted so as to take effect at the Closing;

(iv) persons nominated by the Buyer (in the case of directors, subject to any maximum number imposed by the relevant constitution) are appointed directors, secretary and officers; and

(v) the Participating Sellers shall have delivered to the Buyer a shareholder resolution of the Company adopting new articles of association of the Company (in such reasonable form as the Buyer shall notify the Equityholder Representative) with effect from the Closing.

7.2 Conditions to Obligations of the Company and the Participating Sellers. The obligation of the Company and the Participating Sellers to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions precedent, each of which may be waived in writing in the sole discretion of the Company and Equityholder Representative (on behalf of the Participating Sellers):

(a) all applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or otherwise been terminated

(b) no Order shall be in effect, and no Legal Proceeding shall be pending or shall have been threatened, that would reasonably be expected to (i) prevent consummation of the transactions contemplated by this Agreement, or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation of such transaction;

(c) the representations and warranties set forth in Article IV shall be true and correct as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent any such inaccuracies, individually or in the aggregate, have not had and would not reasonably be expected to have a Buyer Material Adverse Effect;

(d) the Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

 

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(e) the Equityholder Representative shall have received the Buyer Certificate; and

(f) the Equityholder Representative shall have received a counterpart of the Escrow Agreement executed by the Buyer and the Escrow Agent.

Article VIII

INDEMNIFICATION

8.1 Indemnification by the Sellers.

(a) From and after the Closing, each Seller shall defend and indemnify the Buyer in respect of, and hold it harmless against and will compensate and reimburse the Buyer for, any and all Damages incurred or suffered by any Buyer Indemnified Party (regardless of whether such Damages relate to any Third Party Action) resulting from, relating to or constituting (i) any breach, as of the date of this Agreement or as of the Closing Date, of any Specified Seller Representation of such Seller or (ii) any failure by such Seller to perform any covenant or agreement of such Seller contained in this Agreement.

(b) From and after the Closing, the Participating Sellers, severally in proportion to the respective Adjusted Pro Rata Shares, shall defend and indemnify the Buyer in respect of, and hold it harmless against and will compensate and reimburse the Buyer for, any and all Damages incurred or suffered by any Buyer Indemnified Party (regardless of whether such Damages relate to any Third Party Action) to the extent resulting from, relating to or constituting: (i) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty contained in Article II of this Agreement; (ii) any failure to perform any covenant or agreement of any Group Company contained in this Agreement that is required to be performed by a Group Company at or prior to the Closing; or (iii) the following Taxes, except to the extent reflected in the Final Closing Adjustment: (A) any Taxes of any Seller to the extent such Taxes are primarily chargeable on the Buyer; (B) any Taxes for, or allocated in accordance with Section 9.3(a)(ii) to, any Pre-Closing Tax Period due and payable by any of the Group Companies, including any Taxes with respect to any Pre-Closing Tax Period for which payment has been deferred pursuant to Section 2302 of the CARES Act or any similar provision of state, local or non-U.S. Laws or any UK Deferred Taxes; (C) any Taxes for which any Group Company has any liability under Treasury Regulation Section 1.1502-6 or under any comparable or similar provision of state, local or non-U.S. Laws as a result of being a member of an affiliated, consolidated, combined, unitary or similar group prior to the Closing; (D) any Taxes that are borne by Sellers pursuant to Section 9.3(f); and (E) the loss of any Closing Adjustment Statement Relief, which, for these purposes, shall be calculated as the amount by the Final Closing Adjustment would have been increased if such Relief had not been taken into account as Closing Adjustment Statement Relief in the preparation of the Final Closing Adjustment Statement.

8.2 Indemnification Claims.

(a) The Buyer shall give written notification to the Equityholder Representative of the commencement of any Third Party Action (or any written notice received by the Buyer or

 

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any of its Subsidiaries threatening the commencement of any third Party Action). Such notification shall be given as promptly as is reasonably practicable, and in any event within twenty (20) calendar days after receipt by the Buyer of notice of such pending or threatened Third Party Action, and shall describe in reasonable detail (to the extent then known by the Buyer) the facts constituting the basis for such Third Party Action and the amount of the claimed Damages. No delay or failure on the part of the Buyer in so notifying the Equityholder Representative shall relieve any Seller of any liability or obligation hereunder except to the extent such Seller is actually prejudiced by such delay or failure. Within twenty (20) calendar days after delivery of such notification, the Equityholder Representative may, upon written notice thereof to the Buyer (and subject to the rights of the insurer under the R&W Policy to control the defense of Third Party Actions covered by such R&W Policy), assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Buyer; provided that (i) the Equityholder Representative may only assume control of such defense if (A) it acknowledges in writing to the Buyer on behalf of all of the Participating Sellers that any Damages that may be assessed against any Buyer Indemnified Party in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to, and subject to the limitations set forth, this Article VIII, (B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the current balance of the Escrow Fund, and (C) an adverse resolution of the Third Party Action would not reasonably be expected to have a material adverse effect on the goodwill or reputation of any Buyer Indemnified Party or the business, operations or future conduct of any Buyer Indemnified Party and (ii) the Equityholder Representative may not assume control of the defense of any Third Party Action involving Taxes, any Governmental Entity or criminal liability or to the extent equitable relief is sought (and cannot be separated from claims for monetary damages) against the Buyer or any of its subsidiaries. If the Equityholder Representative does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Buyer shall, subject to the other provisions set forth herein, control such defense. The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. The fees and expenses of counsel to the Buyer Indemnified Parties with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (i) the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 8.2(a) or (ii) the Equityholder Representative assumes control of such defense and the Buyer reasonably concludes that a Seller, on the one hand, and the Buyer, on the other hand, have conflicting interests or different defenses available with respect to such Third Party Action. Neither the Equityholder Representative nor any Seller shall agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Buyer, which shall not be unreasonably withheld, conditioned or delayed; provided that the consent of the Buyer shall not be required if the Equityholder Representative, on behalf of all of the Participating Sellers, agrees in writing to pay any amounts payable pursuant to such settlement

 

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or judgment and such settlement or judgment includes a complete release of the Buyer Indemnified Parties from further liability. Except as provided in Section 8.2(e), the Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Equityholder Representative, which shall not be unreasonably withheld, conditioned or delayed.

(b) In order to seek indemnification under this Article VIII, the Buyer shall deliver a Claim Notice to the Equityholder Representative (including, in the case of an indemnification claim directly against a Participating Seller, to such Participating Seller) promptly upon becoming aware of the facts and circumstances reasonably giving rise to a claim for indemnification under this Article VIII.

(c) Within twenty (20) calendar days after receipt of a Claim Notice, the Equityholder Representative shall deliver to the Buyer a Response, in which the Equityholder Representative, on behalf of all of the Participating Sellers, shall: (i) agree that the Buyer is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a letter from the Equityholder Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Claimed Amount), (ii) agree that the Buyer is entitled to receive the Agreed Amount (in which case the Response shall be accompanied by a letter from the Equityholder Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Agreed Amount) or (iii) dispute that the Buyer is entitled to receive any of the Claimed Amount. If no Response is delivered by the Equityholder Representative within such twenty (20) calendar day period, the Participating Sellers shall be deemed to have agreed that all of the Claimed Amount is owed to the Buyer. Acceptance by the Buyer of partial payment of any Claimed Amount shall be without prejudice to the Buyer’s right to claim the balance of any such Claimed Amount except to the extent otherwise provided in a written instrument signed by the Buyer.

(d) Subject to Section 1.6(h), any Dispute shall be resolved in accordance with Section 12.10. If the Buyer seeks to enforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Equityholder Representative and the Buyer shall deliver to the Escrow Agent, promptly following the final resolution of the Dispute (whether by mutual agreement, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Fund shall be distributed to the Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).

(e) Without limitation of Section 1.6, the Equityholder Representative shall have full power and authority on behalf of each Participating Seller to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Participating Sellers under this Article VIII (except to the extent of claims made directly against a Participating Seller for a breach of such Participating Seller’s Specified Seller Representations, or such Participating Seller’s Fraud or Willful Breach). Subject to the foregoing, the Equityholder Representative shall have no liability to any Participating Seller for any action taken or omitted on behalf of any Participating Seller pursuant to this Article VIII.

 

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8.3 Survival of Representations and Warranties.

(a) Except in cases of Fraud or Willful Breach, (x) the representations and warranties in Article III of this Agreement will survive until 18 months after the Closing, except that: (i) representations and warranties set forth in Sections 3.10 (tax matters), 3.17 (labor and employment), 3.18 (employee benefit plans) shall survive until the date that is six (6) years after the Closing; (ii) the representations and warranties set forth in Sections 3.13 (intellectual property) and 3.29 (privacy) shall survive until the date that is three (3) years after the Closing; and (iii) the representations and warranties in Sections 3.1 (organization, standing and corporate power), 3.2 (capitalization), 3.4(a) (authority), 3.4(b) (absence of conflicts with charter documents), 3.11 (title), 3.24 (certain business relationships with affiliates) and 3.27 (brokers) shall survive until the date that is six (6) years after the Closing (the representations and warranties described in the foregoing clauses (i) through (iii), the “Fundamental Representations”); and (y) the Specified Seller Representations shall survive until the date that is six (6) years after the Closing. All covenants and agreements set forth in this Agreement shall survive until fully performed.

(b) If the Buyer delivers to the Equityholder Representative, before expiration of a representation, warranty, covenant or agreement (including the indemnification provisions set forth in Section 8.1), either a Claim Notice based upon a breach of such representation, warranty, covenant or agreement, then the applicable representation, warranty, covenant or agreement shall survive until, but only for purposes of, the resolution of the matter covered by such notice, if such resolution occurs after such representation, warranty, covenant or agreement would otherwise expire pursuant to the terms hereof.

8.4 Limitations.

(a) Except in cases of Fraud or Willful Breach, or in cases of breaches of Specified Seller Representations, the liability of any Seller for indemnification claims under this Article VIII shall be limited to such Seller’s Pro Rata Share of the Escrow Fund. In no event will the aggregate liability of a Seller for indemnification claims under this Article VIII exceed the portion of the Aggregate Consideration received by such Seller, except in cases of Fraud by such Seller or, in the case of the Participating Sellers only, Willful Breach by such Participating Seller.

(b) Except in cases of Fraud or, in the case of the Participating Sellers only, Willful Breach (in each case, for which the Escrow Fund and the Buyer’s rights under the R&W Policy shall be Buyer’s first source of recovery), or in the case of breaches of the Specified Seller Representations, (x) the Escrow Amount (and the Buyer’s rights under the R&W Policy) shall be the sole and exclusive source of indemnification of the Buyer under this Agreement and (y) there will be no recoveries with respect to any breach of representations and warranties until, and solely to the extent that, the aggregate amount of indemnifiable Damages under this Article VIII exceed an amount equal to the Escrow Amount.

(c) No Seller shall have any right of contribution against any Group Company with respect to any breach by such Group Company of any of its representations, warranties, covenants or agreements set forth in this Agreement.

 

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(d) The rights to indemnification set forth in this Article VIII shall not be affected by (i) any investigation conducted by or on behalf of any Buyer Indemnified Party or any knowledge acquired (or capable of being acquired) by any Buyer Indemnified Party, whether before or after the date of this Agreement or the Closing Date, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder, or (ii) any waiver by the Buyer of any closing condition relating to the accuracy of representations and warranties or the performance of or compliance with agreements and covenants.

(e) Any indemnification payments made to a party pursuant to this Article VIII shall be treated as an adjustment to the Aggregate Consideration for Tax purposes to the extent permitted by Law.

(f) Notwithstanding anything to the contrary in this Agreement, for the purposes of determining (i) whether there has been a breach of any representation or warranty set forth in Article II or Article III and (ii) the amount of Damages for which the Buyer may be entitled to indemnification under this Article VIII, each such representation or warranty (other than the representations and warranties set forth in Section 3.6(a)) shall be deemed to have been made without any qualifications or limitations as to materiality (including any qualifications or limitations made by reference to a Company Material Adverse Effect).

(g) The Buyer shall have the right to satisfy any indemnification obligations of the Sellers for Damages that are finally determined to be payable in accordance with this Article VIII, by reducing, setting off against, and retaining such portion of any Future Payment that becomes payable pursuant to this Agreement as is necessary to satisfy such claims.

(h) The Sellers shall have no liability for indemnification claims under this Article VIII for Damages with respect to (i) any Taxes arising from a breach of the representations and warranties made by or on behalf of the Group Companies set forth in Section 3.10 (Tax Matters) (other than the representations and warranties contained in Section 3.10(i), (l), (m), (o) or (t) that are attributable to a taxable period (or portion thereof) beginning after the Closing Date), (ii) except as provided in Section 8.1(b)(iii)(E), the amount, value or condition of, or any limitations on, any Tax asset or attribute (e.g., net operating loss or Tax credit) of a Group Company, including the ability of any Group Company or Buyer or any of its Affiliates to utilize such Tax asset or attribute following the Closing, (iii) any Taxes arising as a result of an action taken or inaction by Buyer or its Affiliates (including the Group Companies after the Closing) outside of the Ordinary Course of Business on the Closing Date after the Closing (including any change in accounting date of any Group Company), unless such action was taken at the request of the Sellers, (iv) any Taxes arising from an election made with respect to any of the Group Companies under Sections 336(e) or 338 of the Code, (v) any Taxes arising as a result of any increase in rates of Taxation, any change in law or in the published practice of any Tax Authority made in each case after Closing, (vi) any Taxes arising as a result of a failure or omission on the part of any Group Company after Closing to make any valid claim, election, surrender or disclaimer or to give any valid notice or consent in circumstances where the making, giving or doing of which was taken into account in computing the provision or reserve for Taxation in the Closing Adjustment Statement that was notified to the Buyer by the Sellers, (vii) any Taxes for which Relief (other than Closing Adjustment Statement Relief or Relief arising post-Closing) is available to the relevant Group Company to relieve or mitigate such liability at no cost to the relevant Group Company or (viii) Sales Taxes.

 

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(i) In calculating the amount of Damages payable to any Buyer Indemnified Party hereunder, the amount of any indemnified Damages shall be determined net of (i) any amounts to which any Buyer Indemnified Party (or its Affiliates) is entitled under the R&W Policy or any other insurance policy (net of the cost of recovery and any increase in premiums or deductibles) with respect to such Damages and (ii) the amount of any other third party recoveries actually received (net of reasonable and documented collection costs) with respect to such Damages. Each Buyer Indemnified Party shall use commercially reasonable efforts to recover any such amount from any applicable insurance policy (including the R&W Policy). If payment from the any such insurance policy or such other third party is received by a Buyer Indemnified Party after indemnification is received by any Buyer Indemnified Party hereunder, such Buyer Indemnified Party shall promptly pay to the applicable Participating Sellers the amount recovered by it from such insurance policy or such third party for which such Buyer Indemnified Party had been indemnified hereunder to the extent such recovery (net of all costs of recovery and increases in insurance premiums, together with the amount of indemnification received by the Buyer hereunder) exceeds the amount of Damages incurred by the Buyer Indemnified Parties in connection with the matter giving rise to such indemnification.

(j) Except for remedies arising from claims against a Seller based on such Seller’s Fraud or for any claims against a Seller under any Transaction Document (other than this Agreement) to which such Seller is a party, the indemnification provisions set forth in this Article VIII shall be the sole and exclusive remedy of the Buyer Indemnified Parties (or any other Person) against the Sellers (and their Affiliates, direct or indirect investors, agents, employees, representatives) with respect to any and all claims from and after the Closing arising out of the subject matter of this Agreement and the transactions contemplated hereby.

8.5 Release of Escrow Funds.

(a) Within two (2) Business Days after the eighteen (18) month anniversary of the Closing Date (the “Release Date”), the Equityholder Representative and the Buyer shall deliver a joint instruction letter to the Escrow Agent under the Escrow Agreement instructing the Escrow Agent to disburse to the Paying Agent for the benefit of the Sellers any Release Amount for the Release Date. Within two (2) Business Days after final resolution of any claim giving rise to any portion of any Pending Claim Amount, the Buyer and the Equityholder Representative shall deliver a joint instruction letter to the Escrow Agent under the Escrow Agreement instructing the Escrow Agent to disburse such portion of the Pending Claim Amount in accordance with such final resolution. All amounts disbursed from the Escrow Fund for the benefit of the Sellers under this Agreement and the Escrow Agreement shall be paid to the Paying Agent for distribution to the Sellers, allocated among the Sellers in accordance with the Closing Date Allocation Schedule.

 

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(b) “Release Amount” means the positive amount (if any) by which the Escrow Amount exceeds the sum of (A) the aggregate amount of all claims validly asserted by the Buyer against the Escrow Fund that have been resolved in favor of the Buyer to the extent such amount has not been disbursed to the Buyer prior to the Release Date (such amount, the “Pending Disbursement Amount”), plus (B) the aggregate amount of all claims validly asserted by the Buyer against the Escrow Fund that are pending as of the Release Date (such amount, the “Pending Claim Amount”), plus (C) the aggregate amount of all funds disbursed to the Buyer from the Escrow Fund prior to the Release Date under this Agreement and the Escrow Agreement.

Article IX

OTHER POST-CLOSING AGREEMENTS

9.1 No Claims. Effective as of the Closing, each Participating Seller, by its execution and delivery of this Agreement, hereby (a) waives any and all rights of indemnification, contribution and other similar rights against any Group Company (whether arising pursuant to any charter document of any Group Company, any Contract, applicable Law or otherwise) to the extent arising out of the representations, warranties, covenants and agreements contained in this Agreement, and agrees that any claim of the Buyer, whether for indemnity or otherwise, may be asserted directly against the Participating Sellers or any Participating Seller (solely to the extent, and subject to the limitations, provided in this Agreement), without any need for any claim against, or joinder of, any Group Company and (b) forever waives, releases and discharges (and hereby agrees to cause each of its representatives to forever waive, release and discharge) with prejudice each Group Company from any and all claims, rights (including rights of indemnification, contribution and other similar rights, from whatever source, whether under Contract, applicable Law or otherwise), causes of action, protests, suits, disputes, orders, obligations, debts, demands, proceedings, Contracts, promises, liabilities, controversies, costs, expenses, fees (including attorneys’ fees), or damages of any kind, arising by any means (including subrogation, assignment, reimbursement, operation of law or otherwise), whether known or unknown, suspected or unsuspected, accrued or not accrued, foreseen or unforeseen, or matured or unmatured related or with respect to, in connection with, or arising out of, directly or indirectly, such Participating Seller’s ownership (or purported ownership) in any Equity Interests of the Group Companies prior to the Closing; provided, however, this Section 9.1 shall not be construed as releasing (i) any party from its obligations otherwise expressly set forth in this Agreement or any agreement delivered pursuant hereto; (ii) any Group Company from any obligation to pay to any Person any wages or benefits arising in the Ordinary Course of Business solely from such Person’s employment with such Group Company; (iii) or any rights of the D&O Indemnitees as set forth in Section 6.9. Each Participating Seller hereby expressly waives any and all provisions, rights and benefits conferred by §1542 of the California Civil Code (or any similar, comparable or equivalent provision or Law) which section provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

 

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9.2 Employee Matters.

(a) For a period of no less than twelve (12) months following the Closing Date (or, if shorter, the applicable Continuing Employee’s period of employment), the Buyer shall (or shall cause the Group Companies to) or will use commercially reasonable efforts to cause third-party vendors to, as applicable, provide the Continuing Employees who remain employed during such period with (i) annual base salary or wage and target cash incentive compensation no less favorable in the aggregate than what was provided by the Group Companies as of immediately prior to the Closing and (ii) employee benefits (but excluding change-in-control, retention, equity-related, retiree health or welfare, defined benefit, nonqualified deferred compensation plan, if applicable) substantially comparable in the aggregate to what is provided by the Group Companies as of immediately prior to the Closing. For purposes of determining eligibility to participate, vesting and entitlement to benefits where length of service is relevant under any benefit plan or arrangement (other than a change-in-control, retention, equity-related, defined benefit, retiree health or welfare, or nonqualified deferred compensation plan, if applicable) of the Buyer and to the extent permitted by applicable Law and subject to any applicable break in service or similar rule, the Buyer shall, or shall use commercially reasonable efforts to cause third-party vendors to, provide that the Continuing Employees shall receive service credit under the Buyer’s benefit plans or arrangements for their period of service with the Group Companies prior to the Closing except where doing so would cause a duplication of benefits. The Buyer shall, or shall use commercially reasonable efforts to cause third-party vendors to, cause any and all pre-existing condition (or actively at work or similar) limitations, eligibility waiting periods and evidence of insurability requirements under any group health plans to be waived with respect to such Continuing Employees and their eligible dependents in accordance with applicable Law.

(b) No provision of this Agreement shall (i) create any third-party beneficiary or other rights in any Company Employee or independent contractor of the Group Companies to enforce the provisions of this Section 9.2(b), (ii) be construed as an amendment, waiver or creation of any Employee Benefit Plan or other employee benefit plan the Group Companies, the Buyer or its or their respective Affiliates, (iii) limit in any way the right of the Buyer, the Group Companies or of any of their respective Affiliates to change its compensation structure or employee benefit programs or otherwise amend or terminate any Employee Benefit Plan or other employee benefit plan of the Group Companies, the Buyer or its or their respective Affiliates at any time, (iv) obligate the Buyer, the Group Companies or any of its or their respective Affiliates to provide any particular type or amount of compensation or benefits to any employee, including any Continuing Employee, or (v) create any right to employment, continued employment, or any term or condition of employment with the Buyer, the Group Companies or any of its or their respective Affiliates. Section 9.2(a) shall not apply to persons covered by collective bargaining agreements or other collective representations and shall not apply to persons employed outside the United States, who shall instead be provided compensation and benefits consistent with any Contracts covering them and applicable Law.

(c) Buyer shall, or shall cause the applicable Group Company to, pay to each Company Employee who is listed on Section 9.2(c) of the Disclosure Schedule (each, a “Bonus Eligible Employee”) the amount listed opposite such Bonus Eligible Employee’s name on Section 9.2(c) of the Disclosure Schedule (as applicable, the “2020 Accrued Payment”). The 2020 Accrued Payments will be paid to each Bonus Eligible Employee, less applicable withholding, (i) in the first payroll period in March 2021 or (ii) the first payroll date of the applicable Group Company following the date of such Bonus Eligible Employee’s involuntary termination of employment without Cause by the applicable Group Company.

 

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9.3 Tax Matters.

(a) Preparation and Filing of Tax Returns; Payment of Taxes.

(i) The Group Companies shall prepare and timely file or cause to be prepared and timely filed all Tax Returns of the Group Companies that are required to be filed (taking into account extensions) on or prior to the Closing Date and shall make any payments required with respect to any such Tax Returns. Such Tax Returns shall be prepared and filed in accordance with applicable Law and in a manner consistent with past practices.

(ii) The Buyer shall prepare and timely file or cause to be prepared and timely filed all Tax Returns of the Group Companies that are required to be filed (taking into account extensions) after the Closing Date. Any such Tax Returns for a Pre-Closing Tax Period or Straddle Period shall be prepared in a manner consistent with the past practices of the Group Companies, except as required by applicable Law. At least twenty (20) Business Days (or such shorter period, as is reasonably practicable in the case of non-corporation Tax Returns) prior to the filing of any such Tax Return for a Pre-Closing Tax Period or Straddle Period, the Buyer shall submit a copy of such income or other material Tax Return to the Equityholder Representative for the Equityholder Representative’s review and comment, and the Buyer shall consider in good faith any comments provided by the Equityholder Representative that are received, in writing, by the Buyer within fifteen (15) Business Days (or such shorter period, as is reasonably practicable in the case of non-corporation Tax Returns) after submitting a copy of such Tax Return to the Equityholder Representative. The Buyer shall make all payments required with respect to any such Tax Returns; provided, however, that the Participating Sellers shall promptly indemnify the Buyer to the extent provided by Article VIII.

(b) Allocation of Certain Taxes. For purposes of this Agreement, the portion of any Taxes for any Straddle Period that are allocable to the portion of such taxable period that ends on the Closing Date shall be deemed to equal: (i) in the case of Taxes that (x) are based upon or related to income or receipts or (y) imposed in connection with any sale or other transfer or assignment of property (other than Taxes described in Section 8.1(b)(iii)(D) and the Buyer Stamp Duty), the amount which would be payable if the taxable year ended with the Closing Date, and (ii) in the case of other Taxes imposed on a periodic basis (including property Taxes), the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of calendar days in the period ending with the Closing Date and the denominator of which is the number of calendar days in the entire period. For purposes of allocating Taxes attributable to any partnerships or specified foreign corporations (within the meaning of Section 965(e) of the Code), the taxable year of any such partnerships or specified foreign corporations shall be treated as ending on the Closing Date (without regard to any contrary provision of Law).

(c) Retroactive Tax-Related Actions. Following the Closing, if any amount remains in the Escrow Fund or any Future Payments remain unpaid, the Buyer shall not, and shall cause the Group Companies not to, without the prior written consent of the Equityholder Representative (such consent not to be unreasonably withheld, conditioned or delayed), if such

 

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action would reasonably be expected to result in an indemnification claim against the Sellers pursuant to Article VIII hereof or result in a reduction to any amount payable to Sellers pursuant to Section 9.3(f), (i) amend any Tax Return of any Group Company to the extent that such Tax Return relates to any Pre-Closing Tax Period, (ii) with respect to any Group Company, make, change or revoke any Tax election or adopt or change any accounting method or practice with respect to, or that has retroactive effect to, any Pre-Closing Tax Period, (iii) extend or waive the applicable statute of limitations with respect to a Tax or a Tax Return of any Group Company with respect to any Pre-Closing Tax Period, or (iv) other than with respect to Sales Taxes or Tax Returns with respect to Sales Taxes, pursue or agree to any voluntary disclosure agreement with any Governmental Entity that relates to, or voluntarily approach, any Governmental Entity regarding any Taxes (or potential Taxes) or Tax Returns of any Group Company for any Pre-Closing Tax Period.

(d) Section 338 or 336 Elections. Buyer shall defend and indemnify each Seller in respect of, and hold it harmless against and will compensate and reimburse each Seller for, any and all Taxes required to be paid, or other Damages incurred, by Sellers (or any of their direct or indirect equityholders) as a result of any election made under Sections 336 or 338 of the Code, or any similar provision of state, local or foreign Law, with respect to any of the transactions contemplated by this Agreement. The Equityholder Representative shall reasonably cooperate with the Buyer (at the Buyer’s expense) to determine, in a timely manner, the amount of Taxes, and any anticipated Damages, for which the Buyer would be required to indemnify Sellers (or any of their direct or indirect equityholders) if Buyer were to make an election under Sections 336 or 338 of the Code, or any similar provision of state, local or foreign Law, with respect to any of the transactions contemplated by this Agreement.

(e) Sales Tax Liability. If the sum of the actual Sales Taxes of the Group Companies paid within two years following the Closing Date for Pre-Closing Tax Periods and the amount of Sales Taxes of the Group Companies for Pre-Closing Tax Periods that is pending resolution with an applicable Tax Authority on the second anniversary of the Closing Date for which Sales Tax Returns or a voluntary disclosure have been filed, on an aggregate basis, is less than the Sales Tax Liability, then Buyer shall pay to the Sellers the difference as a Future Payment promptly following the second anniversary of the Closing Date. Buyer shall (i) keep the Equityholder Representative reasonably informed of the progress of any voluntary disclosures made with respect to Sales Taxes of the Group Companies for any Pre-Closing Tax Period, (ii) provide the Equityholder Representative with copies of correspondences and other documents relating to any such voluntary disclosures, and (iii) provide Equityholder Representative with the opportunity to participate, at the expense of the Sellers, in any such voluntary disclosure.

(f) U.K. Tax Reduction; R&D Tax Credits. The Buyer shall pay to the Sellers as a Future Payment:

(i) the amount of reduction in or repayment of, if any, United Kingdom corporation tax (other than amounts of corporation tax for which a claim could otherwise be made under Section 8.1(b) in which case such claim shall be reduced by the amount of such reduction or repayment) that (x) results from the exercise of the In-the-Money Company Options in connection with the Closing, and (y) results in a saving by the relevant Group Company or any

 

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member of the Buyer’s Group in the current year in which the Closing occurs and the taxable year immediately following the year in which the Closing occurs (the “Tax Reduction Periods”) (such reduction or repayment being the “Options Tax Relief”), provided that the Buyer shall use its reasonable endeavors to procure that the relevant Group Company obtains as soon as possible following Closing such corporation tax deduction and Options Tax Relief in the maximum amount allowed by law in respect of the Tax Reduction Periods save that the Buyer shall not be required to procure that the Options Tax Relief is claimed or used before (or instead of) other reliefs arising to any Group Company(A) if such reliefs would not be available to be used in any periods other than the Tax Reduction Periods; and (B) if such reliefs arose prior to the Closing, they are reflected in Closing Net Working Capital or Closing Indebtedness, which amount shall be payable within one hundred and eighty (180) days after filing of the applicable Tax Return containing the related Tax deduction for the Tax Reduction Period in which the saving is made; provided, however, no dispute, enquiry, investigation or other action has been raised in respect of the Options Tax Relief during the one hundred and eighty (180) day period by HMRC or such other Tax Authority with appropriate jurisdiction (in which case payment shall be made as soon as reasonably practicable following the date on which such enquiry is resolved with HMRC by way of a closure notice or earlier indication that such enquiry is resolved). No payments shall be made in respect of any saving made as a result of Options Tax Relief in periods other than the Tax Reduction Periods. The Buyer shall procure that the relevant Group Companies shall not do anything to prejudice the availability of any Options Tax Relief, and in particular shall not surrender any amount by way of group relief to or from any other company if this shall reduce the Options Tax Relief in the Tax Reduction Periods; and

(ii) the amount of any R&D Credits (whether in the form of a reduction or repayment of corporation tax or in the form of a payment from HMRC or any other Tax Authority or Governmental Authority) available to any Group Company in respect of the period ended December 31, 2019, as claimed on the relevant Group Company’s Tax Return for such period provided, however, such R&D Credits are received in money or money’s worth (including by way of set off or reduction in or repayment of any corporation tax actually paid or payable) by the Buyer no later than March 31, 2021, which amount shall be payable to Sellers promptly after receipt thereof. The Buyer shall use its Reasonable Best Efforts to procure that the relevant Group Companies obtain such R&D Credits as soon as reasonably possible and in the maximum amount lawfully possible and shall not do anything to prejudice or delay the receipt or benefit of such R&D Credits.

(g) Sellers, on the one hand, and the Buyer, on the other, shall each be responsible for and shall pay fifty percent (50%) of all sales or transfer taxes (including real property transfer Taxes) arising out of the transfer of the Purchased Interests pursuant to this agreement, other than the Buyer Stamp Duty (which shall be payable by the Buyer).

 

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Article X

TERMINATION AND AMENDMENT

10.1 Termination. This Agreement may be terminated at any time prior to the Closing (with respect to Sections 10.1(b) through 10.1(e), by written notice by the terminating party to the other party) as provided below:

(a) by mutual written consent of the Buyer and the Equityholder Representative; or

(b) by either the Buyer or the Equityholder Representative if the Closing shall not have occurred on or before the Outside Date; provided, however, that the right to terminate this Agreement under this Section 10.1(b) shall not be available to (i) the Buyer, if the failure of the Closing to have occurred on or before the Outside Date was proximately caused by the failure of the Buyer to perform any of its obligations under this Agreement or (ii) the Equityholder Representative, if the failure of the Closing to have occurred on or before the Outside Date was proximately caused by the failure of any Group Company or any Participating Seller to perform any of such Person’s obligations under this Agreement; or

(c) by either the Buyer or the Equityholder Representative if a Governmental Entity of competent jurisdiction shall have issued a nonappealable final Order or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; provided, however, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to (i) the Buyer, if the issuance of such Order or the taking of such action was proximately caused by the failure of the Buyer to perform any of its obligations under this Agreement or (ii) the Equityholder Representative, if the issuance of such Order or the taking of such action was proximately caused by the failure of any Group Company or any Participating Seller to perform any of such Person’s obligations under this Agreement; or

(d) by the Buyer, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of any Group Company or Participating Seller set forth in this Agreement, which breach or failure to perform (i) would cause the conditions set forth in Section 7.1(c) or 7.1(d) not to be satisfied and (ii) shall not have been cured or waived within twenty (20) days following receipt by the applicable Group Company or Participating Seller of written notice of such breach or failure to perform from the Buyer; provided, however, that the right to terminate this Agreement under this Section 10.1(d) shall not be available to the Buyer if the Buyer is then in material breach of any representation, warranty or covenant set forth in this Agreement; or

(e) by the Equityholder Representative, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Buyer set forth in this Agreement, which breach or failure to perform (i) would cause the conditions set forth in Section 7.2(a) or 7.2(b) not to be satisfied and (ii) shall not have been cured or waived within twenty (20) days following receipt by the Buyer of written notice of such breach or failure to perform from the Equityholder Representative; provided, however, that the right to terminate this Agreement under this Section 10.1(e) shall not be available to the Equityholder Representative if any of the Group Companies or Participating Sellers is then in material breach of any representation, warranty or covenant set forth in this Agreement.

 

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10.2 Effect of Termination. In the event of the termination of this Agreement as provided in Section 10.1, this Agreement shall immediately become void and there shall be no liability or obligation on the part of any party or its respective officers, directors, equity holders or Affiliates; provided, that (a) any such termination shall not relieve any party from liability for Damages for any Willful Breach on the part of such party, including such party’s obligation to close if it was otherwise obligated to do so under the terms of this Agreement and (b) each of Section 5.2 (Confidentiality), this Section 10.2 (Effect of Termination), Section 10.3 (Fees and Expenses), Article XII (Miscellaneous) (in each case including the respective meanings ascribed to the related capitalized terms in Article XI (Definitions)), Buyer’s reimbursement and indemnification obligations pursuant to Section 6.4, and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement. Nothing shall limit or prevent any party from exercising any rights or remedies it may have under Section 12.9 hereof in lieu of terminating this Agreement pursuant to Section 10.1.

10.3 Fees and Expenses. Except as otherwise expressly provided herein, the Buyer will pay all fees and expenses (including legal and accounting fees and expenses and the Buyer Stamp Duty) incurred by it in connection with the transactions contemplated hereby and the Company Transaction Expenses shall be paid by the Company.

10.4 Amendment. This Agreement may be mutually amended by the Buyer, the Company and the Equityholder Representative (on behalf of itself and the Sellers) at any time. This Agreement may not be amended except by an instrument in writing signed (a) in the case of an amendment of any of Section 1.6, Section 1.7, Article VIII, Article IX, this Article X, Article XI and Article XII, on behalf of each of the Buyer, the Company and the Participating Sellers hereto, and (b) in the case of an amendment of any other provision of this Agreement, on behalf of the Buyer, the Company and the Equityholder Representative.

10.5 Extension; Waiver. (a) At any time prior to the Closing, the Buyer, the Group Companies and the Equityholder Representative (on behalf of itself and the Sellers) may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein; (b) any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party; (c) such extension or waiver shall not be deemed to apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance with any agreement or condition, as the case may be, other than that which is specified in the extension or waiver; and (d) the failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

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Article XI

DEFINITIONS

For purposes of this Agreement, each of the following terms has the meaning set forth below.

2020 Accrued Payment” has the meaning set forth in Section 9.2(c).

Accounting Principles” means the Accounting Standards applied on a basis consistent with the application thereof to the Company Financial Statements.

Accounting Standards” means FRS 102.

Adjusted Pro Rata Share” means, with respect to any Company Shares or In-the-Money Company Options, a fraction, (a) the numerator of which is the number of Company Shares represented thereby or subject thereto (as applicable) as of immediately prior to the Closing, and (b) the denominator of which is the number of Fully Diluted Shares minus the number of Fully Diluted Shares held by any Seller who is not a Participating Seller.

Adjustment Escrow Amount” means $350,000.

Adjustment Escrow Fund” means the account established pursuant to the Escrow Agreement to hold the Adjustment Escrow Amount and any interest or other amounts earned thereon prior to such time, less disbursements therefrom prior to such time in accordance with this Agreement and the Escrow Agreement.

Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct, secure or cause the direction of the management or policies of a Person, whether through the ownership of shares, securities or partnership or other ownership interests or by contract (including by the articles of association or other Organizational Documents).

Aggregate Closing Consideration” means an amount in cash equal to (a) the Base Purchase Price, minus (b) the Estimated Closing Adjustment (which for the avoidance of doubt may be a positive or negative number), minus (c) the Escrow Amount, (d) minus the Adjustment Escrow Amount and minus (e) the Equityholder Representative Expense Amount plus (f) the aggregate exercise price with respect to all In-the-Money Company Options outstanding as of immediately prior to the Closing (but after taking into account all exercises of In-the-Money Company Options effective simultaneously with the Closing).

Aggregate Consideration” means the sum of (a) the Aggregate Closing Consideration, plus (b) any Future Payments that become payable in accordance with the terms of this Agreement or the Escrow Agreement.

 

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Aggregate Residual Closing Consideration” means the sum of (a) the Aggregate Closing Consideration, less (b) the Deferred Shares Closing Consideration.

Agreed Amount” means part, but not all, of the Claimed Amount.

Agreement” has the meaning set forth in the first paragraph of this Agreement.

Anti-Bribery Laws” has the meaning set forth in Section 3.20.

Base Purchase Price” means $150,000,000.00.

Bonus Eligible Employee” has the meaning set forth in Section 9.2(c).

Business” has the meaning set forth in the recitals to this Agreement.

Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in Boston, Massachusetts, New York, New York or London, England are permitted or required by Law, executive order or governmental decree to remain closed.

Buyer” has the meaning set forth in the first paragraph of this Agreement.

Buyer Certificate” means a certificate delivered by the Buyer, signed on behalf of the Buyer by an authorized officer of the Buyer, to the effect that each of the conditions specified in paragraphs (a) and (b) of Section 7.2 is satisfied in all respects.

Buyer Indemnified Parties” means the Buyer and its Affiliates (including, after the Closing, each Group Company).

Buyer Material Adverse Effect” means any Change that has a material adverse effect on the ability of the Buyer to consummate the transactions contemplated by this Agreement.

Buyer Stamp Duty” means the UK stamp duty or stamp duty reserve tax liability payable in connection with the transfer of the issued and outstanding Company Shares to the Buyer

CARES Act” has the meaning set forth in Section 3.10(z).

Cause” means, for the purposes of Sections 5.1(f) and 9.2(c), (i) gross misconduct or gross negligence in the performance of employee duties; (ii) being charged with or convicted of any criminal offence (other than minor automobile offenses); (iii) material breach of any term of the contract of employment; or (iv) any reason justifying summary dismissal under an applicable Group Company policy.

CERCLA” means the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

Certificate” means a certificate which as of immediately prior to the Closing represented issued and outstanding Company Shares (or a customary indemnity in lieu thereof executed by the registered holder of the relevant Company Shares in favor of the Buyer in a form reasonably satisfactory to the Buyer).

 

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CFA” has the meaning set forth in Section 3.10(v).

Change” means any change, event, circumstance or development.

Claim Notice” means written notification which contains (a) a description of the Damages incurred or reasonably expected to be incurred by the Buyer and the Claimed Amount of such Damages, to the extent then known, (b) a statement that the Buyer is entitled to indemnification under Article VIII for such Damages and a reasonable explanation of the basis therefor, and (c) a demand for payment in the amount of such Damages.

Claimed Amount” means the amount of any Damages incurred or reasonably expected to be incurred by the Buyer in connection with a claim for indemnification pursuant to Article VIII.

Clearance” has the meaning set forth in Section 3.10(b).

Closing” means the closing of the transactions contemplated by this Agreement.

Closing Adjustment Items” means the sum of (a) the Company Transaction Expenses, (b) the Employee Amount, (c) if the Closing Cash exceeds the amount of the Closing Indebtedness, a negative number (which, for the avoidance of doubt, shall reduce the Estimated Closing Adjustment and the Final Closing Adjustment) equal to the amount by which the Closing Cash exceeds the amount of the Closing Indebtedness, (d) if the amount of the Closing Indebtedness exceeds the Closing Cash, the amount by which the Closing Indebtedness exceeds the Closing Cash, (e) if Closing Net Working Capital is less than the Working Capital Target, the amount of such shortfall, and (f) if the Closing Net Working Capital exceeds the Working Capital Target, a negative number (which, for the avoidance of doubt, shall reduce the Estimated Closing Adjustment and the Final Closing Adjustment) equal to such excess.

Closing Adjustment Statement” means the statement of the Closing Adjustment Items prepared in accordance with the provisions of Section 1.6 and in the form of Schedule 1.6(a).

Closing Adjustment Statement Relief” means any Relief which appears or has been taken into account in the Final Closing Adjustment Statement or has been taken into account in reducing or eliminating any provision for deferred tax which appears in the Final Closing Adjustment Statement (or which, but for the presumed availability of such Relief, would have appeared in the Final Closing Adjustment Statement) and any prepayment of Tax which is treated as an asset in the Final Closing Adjustment Statement.

Closing Cash” means all cash and cash equivalents held by the Group Companies (plus the amount of all un-cleared checks or deposits for the benefit of the Group Companies, and less the amount of all un-cleared checks drafts issued by the Group Companies, security deposits and any other cash or cash equivalents that is subject to limitation on use as of immediately following the Closing), measured as of 11:59 PM Eastern time on the day immediately prior to the Closing Date and determined in accordance with the Accounting Principles (to the extent consistent with the Accounting Standards).

 

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Closing Date” means (a) a date to be specified by the Buyer, which shall be no later than the third (3rd) Business Day after the satisfaction or waiver of the conditions set forth in Article VII (other than the delivery of items to be delivered at the Closing and other than satisfaction of those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such items and the satisfaction or waiver of such conditions at the Closing); provided that, without the Buyer’s consent, such date shall not be prior to the Inside Date; or (b) such other date as may be mutually agreeable to the Equityholder Representative and the Buyer.

Closing Date Allocation Schedule” means a schedule, prepared by the Equityholder Representative in substantially the form attached hereto as Exhibit B and dated as of the Closing Date (as such schedule may be updated, corrected, amended or modified in accordance with Section 1.6(a) from time to time after the Closing), setting forth, with respect to each Seller, (a) such Seller’s name and address; (b) the number of Company Shares held as of the Closing Date by such Seller; (c) (i) the number of Company Shares subject to Non-Employee In-the-Money Company Options outstanding immediately prior to the Closing (after giving effect to the full acceleration of vesting in connection with the transactions contemplated by this Agreement or otherwise) held by such Seller (and, if applicable, the exercise price thereof), and (ii) the number of Company Shares subject to Employee In-the-Money Company Options outstanding immediately prior to the Closing (after giving effect to the full acceleration of vesting in connection with the transactions contemplated by this Agreement or otherwise) held by such Seller (and, if applicable, the exercise price thereof); (d) the portion of the Aggregate Closing Consideration attributable to such Seller’s Company Shares, Non-Employee In-the-Money Company Options and Employee In-the-Money Company Options; and (e) the portion of any Future Payments attributable to such Seller’s Company Shares, Non-Employee In-the-Money Company Options and Employee In-the-Money Company Options.

Closing Indebtedness” means all Indebtedness of each of the Group Companies to the extent outstanding as of the Closing.

Closing Net Working Capital” means the Group Companies’ consolidated current assets in the asset categories reflected on Schedule 1.6(a) under the heading “Current Assets” less the Group Companies’ consolidated current liabilities as of the Closing in the liability categories reflected on Schedule 1.6(a) under the heading “Current Liabilities” (each determined in accordance with GAAP applied on a basis consistent with the application thereof to the most recent audited financial statements included in Company Financial Statements (to the extent consistent with GAAP)).

Closing Payment Certificate” means a certificate, signed by the Company, which (a) sets forth (i) a calculation of the payments to be made by the Buyer in accordance with Section 1.3(b) or which the Buyer will procure that a Group Company make in accordance with Section 1.3, (ii) the identity of each Person entitled to a payment pursuant to Section 1.3(b) or Section 1.3, as appropriate, (iii) the amount due to each such Person and (iv) the applicable wire instructions for the account or accounts of such Person and (b) attaches the Closing Date Allocation Schedule as a schedule thereto.

 

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COBRA” means Part 6 of Title I of ERISA.

Code” means the U.S. Internal Revenue Code of 1986, as amended.

Company” has the meaning set forth in the first paragraph of this Agreement.

Company 401(k) Plan” has the meaning set forth in Section 3.18(c).

Company Articles of Association” means the articles of association of the Company, in effect as of the date of this Agreement.

Company Data” means all confidential or sensitive data and information belonging to the Group Companies and any Personal Data held or used by the Group Companies.

Company Certificate” means a certificate delivered by the Company, signed on behalf of each of the Group Companies by the Chief Executive Officer or President and the Chief Financial Officer (or executive officer equivalent thereof) of the Company, to the effect that each of the conditions specified in Section 7.1 is satisfied.

Company EMI Share” has the meaning set forth in Section 1.9(f).

Company Employee” means any employee of any Group Company.

Company Financial Statements” means:

(a) (i) the audited consolidated balance sheets of the Group Companies at December 31, 2019 and the related consolidated statements of operations, changes in stockholder’s equity and cash flows of the Group Companies as of the end of the fiscal year ended December 31, 2019 prepared in accordance with the Accounting Standards and (ii) an unaudited reconciliation to GAAP;

(b) (i) the audited consolidated balance sheets of the Group Companies at December 31, 2018 and 2017 and the related consolidated statements of operations, changes in stockholder’s equity and cash flows of the Group Companies as of the end of and for each of the fiscal years ended December 31, 2018 and 2017 prepared in accordance with the Accounting Standards and (ii) an unaudited reconciliation to GAAP; and

(c) (i) the unaudited consolidated balance sheets of the Group Companies at September 30, 2020 and the related consolidated statements of operations, changes in stockholder’s equity and cash flows of the Group Companies as of the end of and for the three fiscal quarters ended September 30, 2020 prepared in accordance with the Accounting Standards and (ii) an unaudited reconciliation to GAAP.

Company Intellectual Property” means the Company Owned Intellectual Property and the Company Licensed Intellectual Property.

 

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Companies Knowledge,” “Knowledge of the Companies” and words of similar effect means the knowledge of each of the individuals named on Schedule 11, in each case after due and reasonable inquiry. Such individuals will be deemed to have knowledge of a particular fact, circumstance, event or other matter only if (a) such individual has actual knowledge of such fact, circumstance, event or other matter, or (b) such fact, circumstance, event or other matter would actually be known to such individual had he or she made reasonable inquiry of appropriate employees, directors and/or officers of any Group Company reasonably expected to have actual knowledge of such fact, circumstance or other matter.

Company Licensed Intellectual Property” means all Intellectual Property that is, or is purported to be, licensed to any of the Group Companies by any third party.

Company Material Adverse Effect” means any Change that, individually or in the aggregate with all other Changes, has had or would reasonably be expected to have a material adverse effect on (a) the Business, the assets and liabilities (taken together), or financial condition of the Group Companies or the results of operations of the Group Companies taken as a whole, other than an adverse change of effect resulting from (except to the extent, in the cases of clause (i), (ii), (iii), (iv), (vii) and (viii) below, they had a disproportionate effect on the Group Companies as compared to the other companies in the industries in which the Group Companies operate): (i) general economic conditions (or changes in conditions) in the U.S., the United Kingdom or any other country or region of the world; (ii) conditions (or changes in such conditions) in the industries in which the Group Companies operate; (iii) the announcement or pendency of this Agreement or the transactions contemplated hereby; (iv) any change in applicable Laws or the interpretation thereof; (v) actions required to be taken pursuant to this Agreement; (vi) any change in GAAP or the generally accepted accounting principles of any jurisdiction to which any Group Company is subject; (vii) an earthquake or other natural disaster, pandemics or epidemics (including COVID-19 Measures) and other force majeure events in the United States, the United Kingdom or any other country or region in the world; (viii) political conditions (or changes in such conditions) in the U.S., the United Kingdom or any other country or region in the world; (ix) the commencement, continuation or escalation of a war, material armed hostilities or other material international or national calamity or act of terrorism; and (x) any failure by any Group Company to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would other be expected from this definition). For the avoidance of doubt, the parties agree that the terms “material,” “materially” and “materiality” as used in this Agreement with an initial lower case “m” shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Company Material Adverse Effect.

Company Option” means an option to purchase Company Shares under any Company Option Plan that is outstanding and unexercised, including any EMI Option.

Company Optionholders” means each holder of Employee In-the-Money Company Options or Non-Employee In-the-Money Company Options.

 

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Company Option Plans” means, collectively, the Company UK Stock Option Plan 2012, the Company US Stock Option Plan 2012 and the Company pre-2012 Option Plan in each case, as amended from time to time.

Company Owned Intellectual Property” means all Intellectual Property owned or purported to be owned by, or exclusively licensed (or purported to be exclusively licensed) to, any Group Company, in whole or in part.

Company Plan” means any Employee Benefit Plan in respect of any current or former employees, independent contractors, directors, officers or equity holders of any Group Company that are sponsored or maintained by such Group Company or ERISA Affiliate or with respect to which such Group Company has made or is required, directly or indirectly to make or fund payments, transfers or contributions or has or may have any actual or potential liability, including any Employee Benefit Plan sponsored by a third party that covers service providers to any Group Company.

Company Privacy Policy” shall mean each external or internal, past or present written privacy or security policy or other public written privacy- or security-related policy, notice, representation, obligation, or promise of any Group Company relating to: (a) the privacy of any individuals, including users of any Group Company product or service; or (b) the Processing or security of any Personal Data, including Personal Data of individuals who are employees of any Group Company or are associated with Persons with which any Group Company thereof has an agreement.

Company Registrations” means Intellectual Property Registrations that are registered or filed in the name of any Group Company, alone or jointly with others.

Company Shares” means (a) the ordinary shares of £0.005 each in the capital of the Company, (b) the series A convertible preference shares of £0.005 each in the capital of the Company, (c) the series A-1 convertible preference shares of £0.001 each in the capital of the Company and (d) the Deferred Shares,

Company Source Code” means the source code for any Software included in the Customer Offerings or Internal Systems.

Company Transaction Expenses” means all the sum of, without duplication, (i) all brokerage fees and commissions, finders’ fees or financial advisory fees, any fees and expenses of legal counsel or accountants or other professional services fees payable by any of the Group Companies (or for which any of the Group Companies is responsible) in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby, (b) 50% of the fees and expenses of the Escrow Agent, (c) 50% of the fees and expenses of the Paying Agent and (d) 50% of the premium for the R&W Policy, any Taxes on such premium, any underwriting or similar fee incurred in connection with the R&W Policy, and any compensation, fee, or expense payable to the Buyer’s broker in connection with the R&W Policy.

 

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Confidentiality Agreement” means that certain Nondisclosure Agreement, dated as of April 2, 2019, between the Buyer and the Company.

Contract” means any legally binding contract, covenant, plan, undertaking, concession, agreement, franchise, instrument, license, sublicense, lease, sublease, note, bond, indenture, deed of trust, mortgage, Lien, loan agreement, instrument of Indebtedness or other binding understanding, commitment or arrangement, whether written or oral.

Continuing Employees” means all Company Employees who (i) at the Closing, continue their employment with the Group Companies or the Buyer or any of its Subsidiaries, or (ii) remain or become at the Closing employees of the Group Companies or Buyer or any of its Subsidiaries as required by applicable Law.

Controlling Party” means the party controlling the defense of any Third Party Action.

COVID-19” shall mean the novel coronavirus, SARS-CoV-2 or COVID-19 (and all related strains and sequences), including any intensification, resurgence or any evolutions or mutations thereof, and/or related or associated epidemics, pandemics, disease outbreaks or public health emergencies.

COVID-19 Measures” shall mean any Law, directive, pronouncement or guideline issued by a Governmental Entity, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place,” curfews or other restrictions that relate to, or arise out of COVID-19, including, but not limited to, the CARES Act.

Customer Offerings” means, with respect to each Group Company (a) the products (including Software and Documentation) that such Group Company (i) currently develops, manufactures, markets, distributes, makes available, sells or licenses to third parties, or (ii) has developed, manufactured, marketed, distributed, made available, sold or licensed to third parties in the past, and (b) the services that such Group Company (i) currently provides or makes available to third parties or (ii) has provided or made available to third parties in the past.

D&O Indemnitees” has the meaning set forth in Section 6.9(a).

Damages” means any and all claims, debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses, Taxes and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation, arbitration or other dispute resolution procedures), excluding indirect, special, punitive or exemplary damages except to the extent paid to a third party.

 

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Data Security Incident” means any actual or reasonably suspected breach of security of Company Data or any systems, databases, or other locations where Company Data is Processed regardless of whether such an incident triggers any notice or reporting obligations under applicable Information Privacy and Security Laws, including any actual or reasonably suspected, (a) unauthorized access to, acquisition of, or Processing of Company Data; (b) unauthorized or accidental loss, alteration, disclosure, deletion or destruction of Company Data; or (c) compromise, intrusion, or unauthorized access to networks, systems, databases, servers, or electronic or other media of the Company’s Internal Systems on which Company Data is Processed or from which Company Data may be accessed.

Deferred Shares” means the deferred shares of £0.005 each in the capital of the Company.

Deferred Shares Closing Consideration” means £0.01.

Disclosure Schedule” means the Disclosure Schedule provided by the Group Companies and the Participating Sellers to the Buyer on the date hereof.

Dispute” means the dispute resulting if the Equityholder Representative in a Response disputes the liability of the Sellers for all or part of a Claimed Amount.

Documentation” means printed, visual or electronic materials, reports, white papers, documentation, specifications, designs, flow charts, code listings, instructions, user manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports, marketing materials, packaging, labeling, service manuals and other information describing the use, operation, installation, configuration, features, functionality, pricing, marketing or correction of a product, whether or not provided to end users.

Draft Company Financial Statements” has the meaning set forth in Section 3.6(a).

EMI Option” means a Company Option that satisfies or is intended to satisfy the requirements of Schedule 5 to ITEPA. For the avoidance of doubt, each Company Option issued under the Company pre-2012 Option Plan shall be deemed an EMI Option.

Employee Amount” means (a) all amounts payable by any Group Company pursuant to any change in control bonus plan or severance, change of control, retention or similar arrangement in effect prior to the Closing (excluding the Key Personnel Arrangement and other agreements effected by, or at the request of the Buyer) as a result of the Closing (without regard to any action taken by Buyer following the Closing), including the Transaction Bonuses, and (b) the employer’s share of Taxes payable with respect to (i) all such amounts described in the foregoing clause (a) and (ii) all payments with respect to In-the-Money Company Options pursuant to this Agreement.

Employee Benefit Plans” means all employee benefit plans and compensation arrangements, including (a) “employee benefit plans,” as defined in Section 3(3) of ERISA, together with plans or arrangements that would be so defined if they were not (i) otherwise exempt from ERISA by Section 3(3) of ERISA or another Section of ERISA, (ii) maintained outside the United States or (iii) individually negotiated or applicable only to one individual and (b) any other written or oral benefit arrangement or obligation to provide benefits as compensation for services rendered, including employment or consulting agreements (except for agreements that provide for at will employment that can be terminated at no cost to the applicable Group Company or agreements that provide only what is legally required by applicable local Law), severance

 

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agreements, arrangements, plans or pay policies, stay or retention bonuses or compensation, incentive (including equity or equity-linked) plans, programs or arrangements, patent award programs, sick leave, vacation pay, plant closing benefits, salary continuation or insurance for disability, consulting, or other compensation arrangements, retirement, deferred compensation, bonus, share option or purchase plans or programs, hospitalization, medical insurance, life insurance, tuition reimbursement or scholarship programs, any plans subject to favorable tax treatment and any plans providing benefits or payments in the event of a change of control, change in ownership or effective control, or sale of a substantial portion (including all or substantially all) of the assets of any business or portion thereof.

Employee In-the-Money Company Option” means a Company Option held by a Company Employee that will receive consideration pursuant to the transactions contemplated by this Agreement.

Enforceability Exceptions” has the meaning set forth in Section 3.4(a).

Environmental Law” means any Law relating to the environment, occupational health and safety, or exposure of persons or property to Materials of Environmental Concern, including any statute, regulation, administrative decision or Order pertaining to: (a) the presence of or the treatment, storage, disposal, generation, transportation, handling, distribution, manufacture, processing, use, import, export, labeling, recycling, registration, investigation or remediation of Materials of Environmental Concern or documentation related to the foregoing; (b) air, water and noise pollution; (c) groundwater and soil contamination; (d) the release, threatened release, or accidental release into the environment, the workplace or other areas of Materials of Environmental Concern, including emissions, discharges, injections, spills, escapes or dumping of Materials of Environmental Concern; (e) transfer of interests in or control of real property which may be contaminated; (f) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (g) the protection of wild life, marine life and wetlands, and endangered and threatened species; (h) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (i) health and safety of employees and other persons. As used above, the term “release” shall have the meaning set forth in CERCLA.

Equity Interest” means, with respect to any Person, any share, quota, partnership or membership interest, unit of participation or other similar interest (however designated) in such Person.

Equityholder Representative” has the meaning set forth in the first paragraph of this Agreement.

Equityholder Representative Account Payment” has the meaning set forth in Section 1.5(c).

Equityholder Representative Expense Amount” means $250,000.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

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ERISA Affiliate” shall mean any entity which is, or at any applicable time was within the meaning of Section 414(b), (c), (m) or (o) of the Code, or Section 4001(a)(14) or (b)(1) of ERISA, or guidance thereunder, a member of (a) a controlled group of corporations, (b) a group of trades or businesses under common control, or (c) an affiliated service group, any of which includes or included a Group Company.

Escrow Account” means the account established pursuant to the Escrow Agreement to hold the Escrow Amount.

Escrow Agent” means JPMorgan Chase Bank, NA, as escrow agent pursuant to the Escrow Agreement, or any successor escrow agent pursuant to the Escrow Agreement.

Escrow Agreement” means the Escrow Agreement substantially in the form attached hereto as Exhibit C.

Escrow Amount” means the lesser of $223,334 and fifty percent (50%) of the retention under the R&W Policy.

Escrow Fund” means, as of any time, the Escrow Amount, including any additions thereto made in accordance with this Agreement and the Escrow Agreement and any interest or other amounts earned thereon prior to such time, less disbursements therefrom prior to such time in accordance with this Agreement and the Escrow Agreement.

Estimated Closing Adjustment” means the estimated amount of the Closing Adjustment Items as of the Closing Date to be delivered with the Estimated Closing Adjustment Statement in accordance with the provisions of Section 1.6(a).

Estimated Closing Adjustment Statement” has the meaning set forth in Section 1.6(a).

Exploit” means develop, design, test, modify, make, use, sell, have made, have used, have sold, import, reproduce, market, offer to sell, distribute, perform, display, transmit, commercialize, support, maintain, correct or create derivative works of; “Exploitation” has the correlative meaning.

Final Closing Adjustment” has the meaning set forth in Section 1.6(f).

Final Closing Adjustment Items” has the meaning set forth in Section 1.6(b).

Final Closing Adjustment Statement” has the meaning set forth in Section 1.6(b).

Financing” means one or more financings on terms satisfactory to the Buyer with aggregate net proceeds to the Buyer of at least $150,000,000.

Financing Entities” means each debt or other Financing provider and each other Person (including each agent and arranger) that commits to provide or has otherwise entered into agreements with the Buyer or any of its Subsidiaries to provide Financing.

 

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Financing Parties” means the Financing Entities and their respective Affiliates and their and their respective Affiliates’ Representatives and their respective successors and assigns; provided that neither the Buyer nor any Affiliate thereof shall be a Financing Party.

Foreign Plan” has the meaning set forth in Section 3.18(o).

Fraud” means Delaware common law fraud with scienter in connection with the making of the representations and warranties contained in this Agreement.

Fully Diluted Shares” means a number of Company Shares (other than Deferred Shares) equal to (a) the aggregate number of Company Shares issued and outstanding as of immediately prior to the Closing, plus (b) the aggregate number of Company Shares subject to In-the-Money Company Options outstanding as of immediately prior to the Closing. Fully Diluted Shares shall be deemed to be held by a Seller to the extent the corresponding Company Shares or In-the-Money Company Options are held by such Seller as of immediately prior to the Closing.

Fundamental Representations” has the meaning set forth in Section 8.3(a).

Future Payments” means, collectively, (a) any Final Closing Adjustment that may become payable to Sellers pursuant to Section 1.6, plus (b) any portion of the Escrow Fund or the Adjustment Escrow Fund that may become distributable to Sellers pursuant to this Agreement and the Escrow Agreement (and not already included pursuant to clause (a) hereof), plus (c) any Equityholder Representative Account Payment, plus (d) any amounts that may become payable to Sellers pursuant to Section 9.3(e).

GAAP” means generally accepted accounting principles in the United States.

Governmental Entity” means any federal, state, local or foreign government or any court, arbitrational tribunal, administrative agency or commission or government authority acting under the authority of the federal or any state, local or foreign government.

Grant Date” has the meaning set forth in Section 3.2(d).

Group Company” has the meaning set forth in the recitals of this Agreement.

HMRC” means Her Majesty’s Revenue and Customs.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

IHTA” means the UK Inheritance Tax Act 1984.

In-the-Money Company Option” means the Employee In-the-Money Company Options (including any In-the-Money Company EMI Options) and the Non-Employee In-the-Money Company Options.

In-the-Money Company EMI Option” means each In-the-Money Company Option that is an EMI Option, and the In-The-Money Company Options held by Graham Elliot.

 

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Indebtedness” with respect to any Person means, without duplication, (a) any indebtedness or other obligation for borrowed money; (b) any earnout and similar obligations; (c) the face amount of all letters of credit issued for the account of such Person, to the extent drawn; (d) capitalized lease obligations; (e) the Sales Tax Liability; (f) all payroll Taxes deferred pursuant to the CARES Act or any similar provision of applicable Law and payable after the Closing Date; (g) any VAT or other UK Tax payments deferred due to COVID-19 and payable after the Closing Date of the type included in “GL 24201 “VAT Control” of the Most Recent Balance Sheet (“UK Deferred Taxes”); (h) all interest, prepayment premiums and penalties, and any other fees, expenses, indemnities and other amounts payable as a result of the prepayment or discharge of any Indebtedness; and (i) guarantees by a Person of the Indebtedness another Person (excluding, for the purpose of clarity, intercompany guarantees).

Information Privacy and Security Laws” means: (a) any and all applicable Laws concerning privacy, data protection, or information security with regard to the Processing of Personal Data, including, to the extent applicable, the following to the extent concerning privacy, data protection or information security with regard to the Processing of Personal Data: the Federal Trade Commission (FTC) Act; the Children’s Online Privacy Protection Act (COPPA) and the FTC’s COPPA rule; The Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) Act of 2003 and the FTC’s CAN-SPAM Rule; the Gramm-Leach-Bliley Act (GLBA) and all applicable GLBA rules and regulations; the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and all applicable HIPAA rules and regulations; state data protection Laws, including the California Consumer Protection Act (CCPA) and its implementing regulations; Massachusetts 201 CMR 17.00: Standards for the Protection of Personal Information of Residents of the Commonwealth; state data breach notification Laws; state privacy and consumer protection Laws; the European Union’s Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 (GDPR); the European Union’s Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), as amended by Directive 2009/136/EC of 25 November 2009; the UK Data Protection Act 2018; and all other applicable privacy, data security, data protection, and consumer protection Laws of any jurisdiction, including, as applicable, the European Union, China, India, the Ukraine, the United Kingdom, Canada, Australia or the United States, or any other jurisdiction in which the Company collects or Processes Personal Data, (b) to the extent applicable, the Digital Advertising Alliance’s Self-Regulatory Principles, available at https://digitaladvertisingalliance.org/principles and the European Principles of the European Interactive Digital Advertising Alliance (EDAA), available at https://www.edaa.eu.european-principles/, and (c) all other applicable consumer protection Laws relating to privacy, data protection or information security with regard to the Processing of Personal Data.

Initial Participating Sellers” has the meaning set forth in the first paragraph of this Agreement.

Inlicense” has the meaning set forth in Section 3.13(k).

 

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Inside Date” means December 31, 2020, unless the Company Financial Statements shall not have been delivered to the Buyer at least five (5) Business Days prior to such date, in which case the Inside Date shall be the fifth (5th) Business Day after the date on which the Company Financial Statements is delivered to the Buyer; provided that if the Financing shall have been funded in full prior to such date, then the Inside Date shall be the date on which the Financing has been so funded in full.

Intellectual Property” means the following subsisting throughout the world:

(a) Patent Rights;

(b) Trademarks and all goodwill in the Trademarks;

(c) copyrights, works of authorship (including Software), designs, database rights and registrations and applications for registration thereof, including moral rights of authors;

(d) mask works and registrations and applications for registration thereof and any other rights in semiconductor topologies under the Laws of any jurisdiction;

(e) inventions, invention disclosures, statutory invention registrations, trade secrets and confidential business information, know-how, scientific and technical information, technology, manufacturing and product processes, algorithms, techniques and analytical methodology, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether patentable or nonpatentable, whether copyrightable or noncopyrightable and whether or not reduced to practice;

(f) rights of publicity; and

(g) all proprietary rights relating to any of the foregoing (including remedies against past, present and future infringement thereof and rights of protection of interest therein under the Laws of all jurisdictions).

Intellectual Property Registrations” means Patent Rights, Trademarks (other than unregistered trademarks, service marks and trade dress), registered copyrights and designs, mask work registrations, domain name registrations and applications for each of the foregoing.

Interest Rate” has the meaning set forth Section 1.7(c).

Internal Systems” means the Software and Documentation and the computer, communications and network systems (both desktop and enterprise-wide) used by any of the Group Companies in their business or operations, whether located on the premises of any Group Company or hosted at a third party site.

ITEPA” means the UK Income Tax (Earnings and Pensions) Act 2003.

Joinder Agreement” means a joinder agreement in the form attached hereto as Exhibit D.

 

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Key Company Employee” means any executive-level employee of any Group Company.

Key Personnel” has the meaning set forth in the recitals to this Agreement.

Key Personnel Arrangements” has the meaning set forth in the recitals to this Agreement.

Law” means any United Kingdom or United States federal, state or local or foreign law, common law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any Order of or by any Governmental Entity, or any Permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law.

Lease” means any lease, sublease, license, or occupancy agreement pursuant to which any Group Company leases or subleases from or to another party any real property, or otherwise occupies any real property.

Legal Proceeding” means any action, suit, proceeding (including administrative proceeding), claim, complaint, hearing, information request, notice of violation, arbitration, inquiry or investigation of or before any Governmental Entity or before any arbitrator.

Lien” means any mortgage, pledge, assignment, security interest, encumbrance, charge or other lien (whether arising by Contract or by operation of Law), other than (a) mechanic’s, material men’s and similar liens, (b) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, (c) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of the applicable Group Company and not material to such Group Company.

Material Contract” has the meaning set forth in Section 3.14(a)

Materials of Environmental Concern” means any: pollutants, contaminants or hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof), or any other material (or article containing such material) listed or subject to regulation under any Law due to its potential, directly or indirectly, to harm the environment or the health of humans or other living beings.

Most Recent Balance Sheet” means the unaudited consolidated balance sheets of the Group Companies at the Most Recent Balance Sheet Date.

Most Recent Balance Sheet Date” means September 30, 2020.

Neutral Accountant” has the meaning set forth in Section 1.6(d).

Non-controlling Party” means the party not controlling the defense of any Third Party Action.

 

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Non-Employee In-the-Money Company Option” means a Company Option held by a Person who is not a Company Employee that will receive consideration pursuant to the transactions contemplated by this Agreement.

Objection Notice” has the meaning set forth in Section 1.7(c).

OFCCP” has the meaning set forth in Section 3.17(i).

Open Source Materials” means all Software, Documentation or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model, including, but not limited to, the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), or any other license described by the Open Source Initiative as set forth on www.opensource.org.

Option Exercise Agreement” means the Company Option Exercise and Joinder Agreement in the form attached hereto as Exhibit E.

Options Tax Relief” has the meaning set forth in Section 9.3(e)(i).

Order” means any order, injunction, judgment, decree, ruling, writ, consent, assessment, award, stipulation or arbitration award of or by any Governmental Entity or arbitrator.

Ordinary Course of Business” means the ordinary course of business consistent with past practice.

Organizational Documents” means, with respect to any Person (other than an individual), (a) the constitution, certificate or articles of incorporation or organization and any joint venture, limited liability company, operating or partnership agreement and other similar documents adopted or filed in connection with the creation, formation or organization of such Person and (b) all by-laws, voting agreements and similar documents, instruments or agreements relating to the organization or governance of such Person, in each case as in force as of the date hereof and otherwise (for the avoidance of doubt), as amended or supplemented.

Outlicense” has the meaning set forth in Section 3.13(j).

Outside Date” means February 9, 2021.

Participating Sellers” means the Initial Participating Sellers and any holder of Equity Interests of the Company who executes an Option Exercise Agreement and/or a Joinder Agreement prior to the Closing.

Patent Rights” means all patents, patent applications (including provisional patent applications), utility models, design registrations and certificates of invention and other governmental grants for the protection of inventions or industrial designs (including all related continuations, continuations-in-part, divisionals, substitutions, renewals, extensions, reissues and reexaminations).

 

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Paying Agent” means a paying agent selected by the Buyer and reasonably acceptable to the Company.

Paying Agent Agreement” means an agreement to be entered into at or prior to the Closing by the Paying Agent and the Buyer, governing the disbursement of the Payment Fund.

Payment Fund” means cash in an amount sufficient to make payment of the portion of the Aggregate Closing Consideration payable to the Sellers.

Pending Claim Amount” has the meaning set forth in Section 8.5(b).

Pending Disbursement Amount” has the meaning set forth in Section 8.5(b).

Permits” means all permits, licenses, registrations, certificates, Orders, approvals, consents, waivers, authorizations, franchises, variances and similar rights issued by or obtained from any Governmental Entity (including those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property).

Permitted Lien” means (a) statutory Liens and other governmental assessments for the payment of current Taxes that are not yet delinquent or that are being contested in good faith and for which reserves are properly made in accordance with the Accounting Standards; (b) Liens imposed by Law, such as carriers’, material men’s, mechanics’, warehousemans’, and other like Liens incurred in the Ordinary Course of Business with respect to which payment is not delinquent; and (c) statutory or common law Liens to secure obligations to landlords, lessors, or renters, in each case incurred in the Ordinary Course of Business and that do not materially impair any Group Company’s ownership or use of such operation of its business; (d) with respect to Intellectual Property: (i) restrictions associated with third party rights and licenses and (ii) non-exclusive rights granted under Intellectual Property by any Group Company in the Ordinary Course of Business; (e) liens or encumbrances imposed on the underlying fee interest in real property subject to any Leases of Properties by any Group Company; and (f) other Liens arising in the Ordinary Course of Business none of which, individually or in the aggregate, materially impairs the use, value, title or marketability of title of the affected properties or materially impairs any Group Company or the operation of its or their businesses.

Person” means any natural person, firm, limited liability company, general or limited partnership, association, corporation, unincorporated organization, company, joint venture, trust, Governmental Entity or other entity.

Personal Data” shall mean any data or information in any media that constitutes personal data, personal information, or personally identifiable information under any applicable Law, including the Information Privacy and Security Laws, including, as applicable, a natural person’s first and last name, home or other physical address, telephone number, e-mail address, username and password, photograph, video or audio file that contains a person’s image or voice, Social Security number, driver’s license number, passport number or other government-issued identification number, biometric information, credit or debit card or other financial information, or customer or account number, IP address, cookie information, identification number, location data that relates to an identifiable person, browser, computer or device, and is capable of

 

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determining with reasonable specificity the actual physical location of such person, browser, computer or device, an online or other persistent identifier, or one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of an individual, but in each case only to the extent that any of the foregoing relates to an identified or identifiable specific individual or device.

PPACA” has the meaning set forth in Section 3.18(j).

Pre-Closing Period” means the period commencing on the date of this Agreement and ending at the Closing or such earlier date as this Agreement is terminated in accordance with its terms.

Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period ending on or before the Closing Date.

Pro Rata Share” means (i) with respect to any Company Shares (other than Deferred Shares) or In-the-Money Company Options, a fraction, (a) the numerator of which is the number of Company Shares represented thereby or subject thereto (as applicable) as of immediately prior to the Closing, and (b) the denominator of which is the number of Fully Diluted Shares and (ii) with respect to any Deferred Shares, zero (0).

Processing” or “Processed means any operation or set of operations or set of operations that is performed upon data or information, whether or not by automatic means, such as collection, recording, organization, structuring, storage, access, acquisition, creation, derivation, recordation, organization, storage, adaptation or alteration, correction, retrieval, maintenance, consultation, use, disclosure, dissemination, transmission, transfer, or otherwise making available, alignment, combination, blocking, storage, restriction, retention, deleting, erasure, or destruction.

Properties” means the real properties owned, leased, occupied or used by a Group Company listed in Section 3.12(b) of the Disclosure Schedule.

Purchased Interests” means the Company Shares held by the Participating Sellers.

R&D Credits” means any reduction or repayment of corporation tax or any amounts payable (including by way of set off) by HMRC in respect of research and development tax credits under Part 13 UK Corporation Tax Act 2009 (“CTA 2009”).

R&W Policy” means a representation and warranty insurance policy, issued at or prior to the Closing on terms and conditions that are substantially similar to those set forth on Schedule 6.10.

Reasonable Best Efforts” means best efforts, to the extent commercially reasonable.

Release Amount” has the meaning set forth in Section 8.5(b).

Required Transfer Documents” has the meaning set forth in Section 1.2(c)(iii).

 

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Release Date” has the meaning set forth in Section 8.5(a).

Relief” means any relief, loss, allowance, exemption set-off, deduction or credit in respect of any Tax or relevant to the computation of any income, profits or gains for the purposes of any Tax, and any right to a repayment of Tax.

Relevant Benefits” means any pension, lump sum, gratuity or other like benefit provided or to be provided in connection with past service, retirement, death, or any change in the nature of the service of any employee or officer.

Representatives” means, with respect to any Person, such Person’s officers and directors (or persons holding comparable positions), employees, consultants, independent contractors, subcontractors, leased employees, volunteers, temporary workers, equity holders, accountants, legal and other representatives, agents, executors, heirs, successors and permitted assigns.

Response” means a written response containing the information provided for in Section 8.2(c).

Sales Tax Liability” means $945,000.

Sales Taxes” means sales and use Taxes imposed by a Governmental Authority in the United States or a state or local jurisdiction thereof.

Securities Act” means the Securities Act of 1933, as amended.

Seller Restrictive Covenant Agreement” has the meaning set forth in the recitals to this Agreement.

Sellers” means, collectively, the Participating Sellers, and the Company Optionholders.

Shareholders Agreement” means that certain Investment and Shareholders’ Agreement, relating to the Company, dated February 19, 2014.

Significant Customer” has the meaning set forth in Section 3.23.

Significant Supplier” has the meaning set forth in Section 3.23.

Social Media Account” means any and all accounts, profiles, pages, feeds, registrations and other presences on or in connection with any Social Media Service.

Social Media Service” means (a) social media or social networking website or online service, (b) blog or microblog, (c) photo, video or other content-sharing website or (d) other website or application (including mobile application) used for sharing content with or among end users who are not Company Employees or consultants of a Group Company.

Software” means computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.

 

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Specified Seller Representations” means the representations and warranties set forth in Article II.

Straddle Period” means any taxable period that includes but does not end on the Closing Date.

Stock Transfer Form” means a stock transfer form in the form attached hereto as Exhibit F.

Subsidiary” means, with respect to any Person, any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which such Person (or another Subsidiary) holds shares, stock or other ownership interests representing (a) more than 50% of the voting power of all issued and outstanding shares, stock or ownership interests of such entity or (b) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of issued and outstanding shares, stock or ownership interests upon a liquidation or dissolution of such entity.

Tax Authority” means any government, state or municipality or any local, state, federal or other authority, body or official in any jurisdiction exercising a fiscal, revenue, customs or excise function.

Tax Reduction Periods” has the meaning set forth in Section 9.3(e)(i).

Tax Returns” means any and all reports, returns (including information returns), declarations, or statements relating to Taxes, including any schedule or attachment thereto and any amendment thereof, filed with or submitted to (or required to be filed with or submitted to) any Governmental Entity in connection with the determination, assessment, collection or payment of Taxes or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax.

Taxes” means any and all taxes, charges, fees, duties, contributions, levies or other similar assessments or liabilities, including income, gross receipts, corporation, ad valorem, premium, value-added, net worth, capital stock, capital gains, documentary, recapture, alternative or add-on minimum, disability, registration, recording, excise, real property, personal property, sales, use, license, lease, service, service use, transfer, withholding (including Pay As You Earn), employment, unemployment, insurance, social security, national insurance, business license, business organization, environmental, workers compensation, payroll, profits, severance, stamp, occupation, windfall profits, customs duties, franchise, estimated and other taxes of any kind whatsoever imposed by the United States of America or any state, local or non-U.S. government, or any agency or political subdivision thereof, and any interest, fines, penalties, assessments or additions to tax imposed with respect to or related to such items.

TCGA” means the UK Taxation of Chargeable Gains Act 1992.

Third Party Action” means any Legal Proceeding by a Person other than a party for which indemnification may be sought by the Buyer under Article VIII.

 

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Trademarks” means all registered trademarks, service marks and trade dress, logos, Internet domain names, corporate names and doing business designations and all registrations and applications for registration of the foregoing, common law trademarks and service marks and trade dress.

Transaction Bonuses” means transaction bonuses that are not materially greater in amount than those made available to Buyer.

Transaction Documents” has the meaning set forth in Section 1.5(a).

UK Deferred Taxes” has the meaning set forth in the definition of “Indebtedness”.

U.S. Company Employee” means a Company Employee whose principal location is in the United States.

VAT” means value added tax charged or imposed pursuant to Council Directive 2006/112/EC or any national legislation implementing such Directive (including for the avoidance of doubt the Value Added Tax Act 1994 and any related secondary legislation, regardless of whether or not the United Kingdom is a member of the European Union or continues to be subject to such Directive), and any other value added, sales or turnover tax imposed in any jurisdiction;

VATA” means the UK Value Added Tax Act 1994.

VATable Group Company” has the meaning set forth in Section 3.10(u).

WARN Act” has the meaning set forth in Section 3.17(k).

Willful Breach” means, with respect to any Person, a material breach of this Agreement that is the consequence of an act or omission by such Person, with the actual knowledge that the taking of such act or failure to take such action would be a material breach of this Agreement.

Working Capital Target” means $4,702,566.

Voting Power of Attorney” means a voting power of attorney in the form attached hereto as Exhibit G.

Article XII

MISCELLANEOUS

12.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) two (2) Business Days after being sent for expedited delivery, fees prepaid, via a reputable international overnight courier service or (ii) on the date of confirmation of receipt (or, the first Business Day following such receipt if the date of such receipt is not a Business Day) of transmission by email or facsimile, in each case to the intended recipient as set forth below:

(a) if to the Buyer or (after the Closing) the Company, to:

 

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TechTarget, Inc.

275 Grove Street

Newton, Massachusetts 02466

Attention: Charles D. Rennick, Vice President, General Counsel and

Corporate Secretary

Email: [Redacted]

with copies to (which shall not constitute notice):

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention:     Joseph B. Conahan, Esq.

Email:           joseph.conahan@wilmerhale.com

and

Macfarlanes LLP

20 Cursitor Street

EC4A 1LT

London, England

Attention: Alex Edmonson

Email: alex.edmondson@macfarlanes.com

(b)    if (prior to the Closing) to the Company, to:

BrightTalk Limited

703 Market Street, 15th Floor

San Francisco, California 94103

Attention:                Paul Heald

Email:                       [Redacted]

with a copy to (which shall not constitute notice):

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Attention:                Bradley L. Finkelstein

Email:                       bfinkelstein@wsgr.com

 

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(c)    if to any Participating Seller or the Equityholder Representative, to:

c/o Guidepost Growth Equity

The Prudential Tower

800 Boylston Street, Suite 1310

Boston, MA 02199

Attention:                Russell Pyle

Email:                       [Redacted]

with a copy to (which shall not constitute notice):

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Attention:                Bradley L. Finkelstein

Email:                       bfinkelstein@wsgr.com

Any party to this Agreement may give any notice or other communication hereunder using any other means (including personal delivery, messenger service or ordinary mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. Any party to this Agreement may change the address to which notices and other communications hereunder are to be delivered by giving the other parties to this Agreement notice in the manner herein set forth.

12.2    Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement among the parties to this Agreement and supersedes any prior understandings, agreements or representations by or among the parties hereto, or any of them, written or oral, with respect to the subject matter hereof; provided that the Confidentiality Agreement shall remain in effect in accordance with its terms.

12.3    Third-Party Beneficiaries. This Agreement is not intended to, and shall not, confer upon any other Person any rights or remedies hereunder, except that the Buyer Indemnified Parties shall be third-party beneficiaries of Article VIII and the D&O Indemnitees are third-party beneficiaries of Section 6.9.

12.4    Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of Law or otherwise by any of the parties hereto without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void, except that the Buyer may transfer or assign its rights and obligations under this Agreement, in whole or from time to time in part, to one (1) or more of its Affiliates; provided, that such transfer or assignment shall not relieve the Buyer of its primary liability for its obligations hereunder or enlarge, alter or change any obligation of any other party hereto or due to the Buyer. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.

12.5    Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation and/or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable,

 

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the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

12.6    Counterparts and Signature. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall be considered one (1) and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile or by an electronic scan delivered by electronic transmission.

12.7    Interpretation. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) “either” and “or” are not exclusive and “include,” “includes” and “including” are not limiting; (b) “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) “date of this Agreement” refers to the date set forth in the initial caption of this Agreement; (d) “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”; (e) the descriptive headings and table of contents included herein are included for convenience only and shall not affect in any way the meaning or interpretation of this Agreement or any provision hereof; (f) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (g) references to a Contract mean such Contract as amended or otherwise supplemented or modified from time to time; (h) references to a Person are also to its permitted successors and assigns; (i) references to an “Article,” “Section,” “Exhibit” or “Schedule” refer to an Article or Section of, or an Exhibit or Schedule to, this Agreement; (j) references to “$” or otherwise to dollar amounts refer to the lawful currency of the United States; (k) references to a federal, state, local or foreign Law include any rules, regulations and delegated legislation issued thereunder; (l) references to accounting terms used and not otherwise defined herein have the meaning assigned to them under GAAP; and (m) a term that begins with an initial capital letter, is not defined herein and reflects a different part of speech than a term that begins with an initial capital letter and is defined herein, shall be interpreted in a correlative manner. When reference is made in this Agreement to information that has been “made available” to the Buyer, that shall consist of only the information that was (i) contained in the Group Companies’ electronic data room no later than 5:00 p.m., Eastern time, on the second (2nd) Business Day prior to the date of this Agreement or (ii) delivered to the Buyer or its counsel. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party hereto. No summary of this Agreement prepared by any party shall affect the meaning or interpretation of this Agreement. If any date on which a party is required to make a payment or a delivery pursuant to the terms hereof is not a Business Day, then such party shall make such payment or delivery on the next succeeding Business Day. Time shall be of the essence in this Agreement.

 

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12.8    Governing Law. This Agreement (and any claims or disputes arising out of or related hereto or the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed in all respects, including validity, interpretation, and effect, by and construed in accordance with the internal Laws of the State of Delaware, USA (including in respect of the statute of limitations or other limitations period applicable to any claim, controversy or dispute) without giving effect to any choice or conflict of Law provision or rule (whether of the State of Delaware, USA or any other jurisdiction) that would cause the application of Laws of any jurisdictions other than those of the State of Delaware, USA.

12.9    Remedies.

(a)    Any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such party, and the exercise by a party of any one (1) remedy will not preclude the exercise of any other remedy.

(b)    The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case without posting a bond or undertaking, this being in addition to any other remedy to which they are entitled at Law or in equity. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that (i) the party seeking such remedy has an adequate remedy at Law or (ii) an award of specific performance is not an appropriate remedy for any reason at Law or equity.

12.10    Submission to Jurisdiction. Each of the parties to this Agreement (a) consents to submit itself to the exclusive personal jurisdiction of the Court of Chancery of the State of Delaware, New Castle County, USA or, if that court does not have jurisdiction, a federal court sitting in Wilmington, Delaware, USA in any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (d) agrees not to bring any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement in any other court, and (e) waives any right it may have to a trial by jury with respect to any action or proceeding arising out of or relating to this Agreement. Each of the parties hereto waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. Any party hereto may make service on another party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in Section 12.1. Nothing in this Section 12.10, however, shall affect the right of any party to serve legal process in any other manner permitted by Law.

 

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12.11    Financing Parties. Notwithstanding anything in this Agreement to the contrary, the Sellers, the Equityholder Representative and the Company, each on behalf of itself, its Subsidiaries and each of its controlled Affiliates hereby: (a) agrees that any action or proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Financing Parties, arising out of or relating to, this Agreement, the Financing or any of the agreements entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of the United States District Court for the Southern District of New York sitting in the Borough of Manhattan (or if such court lacks subject matter jurisdiction, the Supreme Court of the State of New York sitting in the Borough of Manhattan), and any appellate court from any thereof and each party hereto irrevocably submits itself and its property with respect to any such action or proceeding to the exclusive jurisdiction of such court, (b) agrees that any such action or proceeding shall be governed by the laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), except as otherwise provided in any agreement relating to the Financing, (c) agrees not to bring or support or permit any of its controlled Affiliates to bring or support any action or proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Party in any way arising out of or relating to, this Agreement, the Financing or any commitment letter, engagement letter or any other agreement entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder in any forum other than any federal (to the extent permitted by law) or state court in the Borough of Manhattan, New York, New York, (d) agrees that service of process upon the Sellers, the Equityholder Representative and the Company, and each of their respective Subsidiaries or their respective controlled Affiliates in any such action or proceeding shall be effective if notice is given in accordance with Section 12.1, (e) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court, (f) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable law trial by jury in any action or proceeding brought against the Financing Parties in any way arising out of or relating to, this Agreement, the Financing or any commitment letter, engagement letter or any other agreement entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (g) agrees that none of the Financing Parties will have any liability to the Sellers, the Equityholder Representative, the Company or any of their respective Subsidiaries or any of their respective controlled Affiliates or Representatives relating to or arising out of this Agreement, the Financing or any commitment letter, engagement letter or any other agreement entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, whether in law or in equity, whether in contract or in tort or otherwise, (h) hereby waives any and all claims and causes of action against the Financing Parties relating to or arising out of this Agreement, the Financing or any commitment letter, engagement letter or any other agreement entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, whether in law or in equity, whether in contract or in tort or otherwise, (i) agrees not to commence (and if commenced agrees to dismiss or otherwise terminate, and not to assist) any

 

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action or proceeding against any Financing Party under this Agreement, the Financing or any commitment letter, engagement letter or any other agreement entered into in connection with the Financing or the transactions contemplated hereby or thereby, (j) agrees that the Financing Parties are express third party beneficiaries of, and may enforce, any of the provisions of this Section 12.11, and (k) agrees that the provisions of this Section 12.11 and the definitions of “Financing Entities” and “Financing Parties” (and any other provisions of this Agreement to the extent a modification thereof would affect the substance of any of the foregoing) shall not be amended in any manner adverse to the Financing Parties without the prior written consent of the Financing Entities.

[Remainder of the Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

BUYER:
TechTarget, Inc.
By:  

/s/ Daniel Noreck

Name: Daniel Noreck
Title: Chief Financial Officer and Treasurer

[Signature Page to Equity Purchase Agreement]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

COMPANY:
BRIGHTTALK LIMITED acting by its two directors
By:  

/s/ Paul Heald

Name: Paul Heald
Title: Director
By:  

/s/ Richard Heald

Name: Richard Heald
Title: Director

[Signature Page to Equity Purchase Agreement]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

EQUITYHOLDER REPRESENTATIVE:

/s/ Russell Pyle

Russell Pyle, solely in his capacity as the Equityholder Representative

[Signature Page to Equity Purchase Agreement]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

INITIAL PARTICIPATING SELLER:
NBGE AIV (BT) L.P.
By:   NBGE AIV (BT) GP, LLC
Its:   General Partner
By:   North Bridge Growth Management, L.P.
Its:   Sole Member
By:   NBGE GP, LLC
Its:   General Partner
By:  

/s/ Russell Pyle

Name: Russell Pyle
Title: Authorized Signatory

[Signature Page to Equity Purchase Agreement]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

INITIAL PARTICIPATING SELLER:

/s/ Paul Heald

Paul Heald, as attorney in fact for each Initial Participating Seller identified on Schedule 1-B, acting under a power of attorney dated December 9, 2020

[Signature Page to Equity Purchase Agreement]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

INITIAL PARTICIPATING SELLER:

/s/ Paul Heald

Paul Heald

[Signature Page to Equity Purchase Agreement]

(Back To Top)

Section 3: EX-10.1 (EX-10.1)

EX-10.1

EXHIBIT 10.1

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179

December 9, 2020

TechTarget, Inc.

$145,000,000 Credit Facility

Commitment Letter

TechTarget, Inc.

275 Grove Street

Newton, MA 02466

Attention: Daniel Noreck

Ladies and Gentlemen:

TechTarget, Inc. (the “Company”) has advised JPMorgan Chase Bank, N.A. (“JPMorgan”, the “Commitment Party”, “we” or “us”) that the Company intends to acquire, directly or indirectly, the company you have identified to us (the “Target”) and consummate the other transactions described on Exhibit A hereto. Capitalized terms used but not defined herein are used with the meanings assigned to them on the Exhibits attached hereto (such Exhibits, together with this letter, collectively, the “Commitment Letter”).

1. Commitments

In connection with the Transactions, JPMorgan is pleased to advise you of its commitment to provide the entire amount of the Credit Facility, upon the terms of this Commitment Letter and in the Credit Agreement attached hereto as Exhibit B (the “Credit Agreement”) and subject only to the satisfaction of the conditions set forth in Exhibit C hereto.

2. Titles and Roles

It is agreed that JPMorgan will act as the sole lead arranger and sole bookrunner in respect of the Credit Facility (acting in such capacities, the “Lead Arranger”; provided that the Company agrees that JPMorgan may perform its responsibilities hereunder through its affiliate, J.P. Morgan Securities LLC) and that JPMorgan will act as the sole administrative agent and collateral agent in respect of the Credit Facility. It is further agreed that JPMorgan will have “left” placement in any marketing materials or other documentation used in connection with the Credit Facility. You agree that, as a condition to the commitments and agreements hereunder, no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Credit Agreement and Fee Letter referred to below) will be paid in connection with the Credit Facility unless you and we shall so agree (our consent not to be unreasonably withheld).


In consideration of JPMorgan’s agreement to arrange the Credit Facility, you agree to offer JPMorgan the right to act as escrow agent in connection with the transactions contemplated by the Purchase Agreement. If JPMorgan agrees to act in such capacity, the Borrower and JPMorgan will enter into the appropriate form of agreement relating to the escrow arrangement substantially in the form attached hereto as Exhibit D.

3. Syndication

We reserve the right to syndicate the Credit Facility (including our commitment hereunder) to a group of lenders (together with JPMorgan, the “Lenders”) identified by us in consultation with you and subject to your consent (such consent not to be unreasonably withheld or delayed); provided, that, in any event, we agree not to syndicate or assign any of the commitments with respect to the Credit Facility to any Disqualified Lender (as defined below) without your consent.

Disqualified Lenders” shall mean (a) those banks, financial institutions and other institutional lenders and investors or persons who are separately identified by name in writing by you to us on or prior to the date of this Commitment Letter, (b) those persons who are competitors of the Company and its subsidiaries or of the Target and its subsidiaries that are separately identified by name in writing by you to us (or following the Closing Date, to the Administrative Agent) from time to time, and (c) in the case of each of clauses (a) and (b), any of their affiliates that are identified by name in writing by you to us (or following the Closing Date, the Administrative Agent) from time to time, or that are clearly identifiable on the basis of the similarity of their name to the name of any entity set forth on the list of Disqualified Lenders (other than, in the case of clauses (b) and (c), any affiliate that is a Debt Fund Affiliate (as defined below) of such Disqualified Lenders); provided that (i) delivery of any written notice with respect to the foregoing shall be made to JPMorgan and the Administrative Agent (at any time following the Closing Date when JPMorgan is serving as Administrative Agent) by e-mail to [redacted]), (ii) any update pursuant to clauses (b) or (c) above shall not become effective until the third business day following JPMorgan’s or, following the Closing Date, the Administrative Agent’s receipt of such notice and (iii) no such updates pursuant to clauses (b) or (c) shall be deemed to retroactively disqualify any banks, financial institutions, institutional lenders, investors or persons that have previously acquired (or entered into a trade for) an assignment or participation interest in the Credit Facility from continuing to hold or vote such previously acquired assignments and participations on terms for Lenders that are not Disqualified Lenders. For the avoidance of doubt JPMorgan shall be permitted provide such list of Disqualified Lenders to the Lenders and prospective Lenders. The company shall be permitted to remove banks, financial institutions and other institutional lenders and investors or persons from the list of Disqualified Lenders by notice to JPMorgan or, following the Closing Date, the Administrative Agent).

Debt Fund Affiliate” shall mean any affiliate of a Disqualified Lender pursuant to clauses (b) or (c) of the definition thereof that is a bona fide debt fund, an investment vehicle, a regulated bank entity or unregulated lending entity that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course which is managed, sponsored or advised by any person controlling, controlled by or under common control with any Disqualified Lender or any affiliate thereof or any competitor, as applicable, and for which no personnel involved with the investment of such competitor or affiliate thereof, as applicable, (i) makes any investment decisions or (ii) has access to any information (other than information publicly available) relating to the Company or Target or any entity that forms a part of the Company’s or Target’s business (including subsidiaries of the Company or subsidiaries of Target).

We reserve the right to commence syndication efforts at any time after the public announcement of the Acquisition, and to the extent we determine to syndicate the Credit Facility, you agree to actively assist (and, subject always to the extent permitted in the Purchase Agreement, to use your

 

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commercially reasonable efforts to cause the Target to actively assist) us in completing a syndication satisfactory to us or until the date that is 60 days after the Closing Date (whichever occurs first). Such assistance shall include, in all cases subject always to the extent permitted in the Purchase Agreement, (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from the existing banking relationships of the Company, (b) direct contact between senior management and advisors of the Company and the proposed Lenders (and using your commercially reasonable efforts to ensure such contact between senior management of the Target and the proposed Lenders), in all such cases at times mutually agreed upon by you and us, (c) as set forth in the next paragraph, assistance from the Company (and using commercially reasonable efforts to cause the Target to assist) in the preparation of a customary confidential information memorandum (the “Confidential Information Memorandum”), a customary lender presentation (the “Lender Presentation”) and other customary marketing materials (together with the Confidential Information Memorandum and the Lender Presentation, the “Information Materials”), and your providing to us (and, subject always to the extent permitted in the Purchase Agreement, using commercially reasonable efforts to cause the Target to provide) all information with respect to you and the Target and its subsidiaries and the Acquisition as JPMorgan may reasonably request provided in connection with the arrangement and syndication of the Credit Facility, (d) the hosting, with us and senior management of the Company, of one virtual meeting of prospective Lenders (and using your commercially reasonable efforts to cause the officers of the Target to be available for such meeting) at a time to be mutually agreed upon and (e) your ensuring (and using commercially reasonably efforts to ensure with respect to the Target and its subsidiaries to the extent provided in the Purchase Agreement) that, prior to the completion of our syndication efforts or until the date that is 60 days after the Closing Date (whichever occurs first), there is no competing offering, placement, arrangement or syndication of any debt securities or bank financing or public announcement thereof by or on behalf of you and your subsidiaries or the Target and its subsidiaries that could reasonably be expected to materially impair the syndication of the Credit Facility, other than (i) the Notes, (ii) the Credit Facility, (iii) capital leases, equipment financings and working capital facilities in the ordinary course of business, (iv) indebtedness permitted to be incurred pursuant to the Purchase Agreement and (v) other indebtedness to be mutually agreed by you and us as specified in the Credit Agreement. Upon the request of the Commitment Party, you will furnish, and (subject always to the extent provided in the Purchase Agreement) will use your commercially reasonable efforts to cause the Target to furnish, in each case for no fee, to the Commitment Party an electronic version of the Company’s and the Target’s trademarks, service marks and corporate logo, as applicable, and you hereby authorize (and, subject always to the extent provided in the Purchase Agreement, will use your commercially reasonable efforts to cause the Target to authorize) the Lead Arranger to download copies of the Company’s and the Target’s, as applicable, trademark logos from its website and post copies thereof and any Information Materials to a deal site on IntraLinks, DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the Lead Arranger to be its electronic transmission system established by the Lead Arranger to syndicate the Credit Facility, and to use the Company’s and the Target’s, as applicable, trademark logos on any confidential information memoranda, presentations and other marketing materials prepared in connection with the syndication of the Credit Facility or, with your consent, in any advertisements that we may place after the closing of the Credit Facility in financial and other newspapers, journals, the World Wide Web, home page or otherwise. You also understand and acknowledge that we may provide to market data collectors, such as league table, or other service providers to the lending industry, information regarding the closing date, size, type, purpose of, and parties to, the Credit Facility. Without limiting your obligations to assist with syndication efforts as set forth in this paragraph, we agree that we will not be released from our commitment hereunder (including our obligation to fund the Credit Facility on the Closing Date pursuant to the terms hereof) nor will our commitment hereunder be reduced with respect to the Credit Facility in connection with any syndication or assignment to any Lender until the initial funding of the Credit Facility and the occurrence of the Closing Date unless (A) you have consented to such syndication or assignment in writing (such consent not to be unreasonably withheld or delayed) and (B) (i) any such Lender has entered into an amendment or joinder with respect to this Commitment Letter committing to provide a portion of the Credit Facility (in which case our commitments hereunder shall be

 

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reduced at such time by an amount equal to the commitment assumed by such Lender) or (ii) such Lender shall have entered into the applicable Credit Facility Documentation (as defined in Exhibit C) and funded the portion of the Credit Facility required to be funded by it on the Closing Date and unless you otherwise agree in writing, JPMorgan shall retain exclusive control over all rights and obligations with respect to its commitment, including all rights with respect to consents, modifications and amendments, until the Closing Date has occurred. Without limiting your obligations to assist with syndication efforts as set forth above, the commencement, conduct or completion of such syndication is not a condition to the commitments or the closing or funding of the Credit Facility.

JPMorgan, in its capacity as Lead Arranger, will manage, in consultation with you, all aspects of the syndication (in each case subject to the provisions set forth in this Commitment Letter and the Fee Letter), including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders, in each case subject to the provisions of the second preceding paragraph. In its capacity as Lead Arranger (but without in any way limiting its commitment to provide the Credit Facility on the terms and conditions set forth herein and in the Fee Letter), JPMorgan will have no responsibility other than to arrange the syndication as set forth herein and in no event shall be subject to any fiduciary or other implied duties. The Lead Arranger is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the arrangement of the Credit Facility and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other Person. Additionally, the Company acknowledges and agrees that, as Lead Arranger, JPMorgan is not advising the Company as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Lead Arranger shall have no responsibility or liability to the Company with respect thereto. Any review by JPMorgan of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of JPMorgan and shall not be on behalf of the Company.

At the request of the Commitment Party, you agree to assist in the preparation of a version of each Confidential Information Memorandum or other Information Material (a “Public Version”) consisting exclusively of information with respect to you and your affiliates, the Target and its subsidiaries and the Acquisition that is either publicly available or not material with respect to you and your affiliates, the Target and its subsidiaries, any of your or their respective securities or the Acquisition for purposes of United States federal and state securities laws (such information, “Non-MNPI”). Such Public Versions, together with any other information prepared by you or the Target or your or its affiliates or representatives and conspicuously marked “Public” (collectively, the “Public Information” and with any information and documentation that is not Public Information being referred to herein as “Private Information”), which at a minimum means that the word “Public” will appear prominently on the first page of any such information, may be distributed by us to prospective Lenders who have advised us that they wish to receive only Non-MNPI (“Public Side Lenders”). You acknowledge and agree that, in addition to Public Information, unless you notify the Lead Arranger in writing (including by e-mail) within a reasonable period of time prior to the intended distribution that such materials contain Private Information (provided that such materials have been provided to you for review a reasonable period of time prior thereto), (a) drafts and final definitive documentation with respect to the Credit Facility and term sheets summarizing the Credit Facility’s terms, (b) administrative materials prepared by the Commitment Party for prospective Lenders (such as a lender meeting invitation, allocations and funding and closing memoranda) and (c) notifications of changes in the terms of the Credit Facility may be distributed to Public Side Lenders. You acknowledge that Commitment Party public-side employees and representatives who are publishing debt analysts may participate in any meetings or telephone conference calls held pursuant to the third preceding paragraph; provided that such analysts shall not publish any information obtained from such meetings or calls (i) until the syndication of

 

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the Credit Facility has been completed upon the making of allocations by the Lead Arranger and the Lead Arranger freeing the Credit Facility to trade or (ii) in violation of any confidentiality agreement between you and the Commitment Party. We hereby agree that any information that is not Public Information shall be treated as Private Information. For the avoidance of doubt, in connection with the foregoing requirements to provide assistance, you will not be required to provide any information to the extent that the provision thereof would violate any applicable law, rule or regulation or any obligation of confidentiality owing to a third party and binding on you, the Target or your or its respective affiliates, provided, that in the case of any confidentiality obligation, (x) you shall have used commercially reasonable efforts to obtain consent to provide such information, (y) such obligation was not entered into in contemplation of this provision and (z) you shall provide notice to us that any such information is being withheld.

In connection with our distribution to prospective Lenders of any Confidential Information Memorandum and, upon our request, any other Information Materials, you will execute and deliver to us a customary authorization letter authorizing such distribution and, in the case of any Public Version thereof or other Public Information, representing that it only contains Non-MNPI. Each Confidential Information Memorandum will be accompanied by a disclaimer exculpating you, the Target and us with respect to any use thereof and of any related Information Materials by the recipients thereof.

4. Information

To assist us in our syndication efforts, you agree promptly to prepare and provide to us all customary information with respect to the Company and the other transactions contemplated hereby, including all financial information and projections (including financial estimates, budgets, forecasts and other forward-looking information) (the “Projections”), as we may reasonably request in connection with the arrangement and syndication of the Credit Facility. For the avoidance of doubt, you will not be required to provide any information to the extent that the provision thereof would violate any attorney-client privilege, law, rule or regulation, or any obligation of confidentiality binding upon you, the Target or any of your or its respective affiliates (so long as such confidentiality obligation was not entered into in contemplation of the Transaction); provided that in the event that you do not provide information in reliance on the exclusions in this sentence, you shall use commercially reasonable efforts to provide notice to the Lead Arranger promptly upon obtaining knowledge that such information is being withheld and you shall use your commercially reasonable efforts to communicate, to the extent permitted, the applicable information in a way that would not violate the applicable obligation or privilege. You hereby represent and warrant (but, for the avoidance of doubt, the making of any such representation, the making of any supplementation thereof, or the accuracy of such representation and warranty, shall not be a condition to the commitment hereunder or the funding of the Credit Facility on the Closing Date) that (with respect to any information relating to the Target and its subsidiaries or information that is provided by another person that is not your affiliate, employee, advisor, agent or representative, to your knowledge) (a) all written information (including all Information Materials) other than the Projections and other forward-looking information and information of a general economic or industry-specific nature in connection with the Transactions (the “Information”) that has been or will be made available to us by you or any of your representatives in connection with the Transactions is or will be, when furnished and taken as a whole, true and correct in all material respects and does not or will not, when furnished and taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections that have been or will be made available to us by you or any of your representatives have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time made (it being understood that the Projections are as to future events and are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be made that the Projections will be realized and that actual results may differ significantly

 

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from the projected results and such differences may be material). You agree that if, at any time prior to the Closing Date, and thereafter until the completion of our syndication efforts or until the date that is 60 days after the Closing Date (whichever occurs first), you become aware that any of the representations and warranties in the preceding sentence would be incorrect if such Information or Projections were furnished at such time and such representations were remade at such time, in any material respect, then you will (or, with respect to the Information and Projections relating to the Target and its subsidiaries, will use commercially reasonable efforts to) promptly supplement the Information and the Projections so that (with respect to Information and Projections relating to the Target and its subsidiaries, to your knowledge) such representations when remade would be correct, in all material respects, under those circumstances. You understand that in arranging and syndicating the Credit Facility we may use and rely on the Information and Projections without independent verification thereof. Notwithstanding anything herein to the contrary, except as otherwise provided in paragraphs 7 and 8 of Exhibit C hereof, no financial statements shall be required to be provided to the Lead Arranger as a condition precedent to closing. The accuracy of the foregoing representations and warranties, whether or not cured, shall not be a condition to the obligations of the Lenders hereunder or the funding of the Credit Facility on the Closing Date.

5. Fees

As consideration for the commitments and agreements of the Commitment Party hereunder, you agree to pay or cause to be paid the nonrefundable fees described in the Fee Letter dated the date hereof and delivered herewith (the “Fee Letter”), except as expressly set forth therein (including, for the avoidance of doubt, clause 1(b) of the Fee Letter).

You agree that, except as expressly set forth in the Fee Letter (including, for the avoidance of doubt, clause 1(b) of the Fee Letter), once paid, the fees or any part thereof payable hereunder or under the Fee Letter shall not be refundable under any circumstances, regardless of whether the transactions or borrowings contemplated by this Commitment Letter are consummated, except as otherwise agreed in writing by you and JPMorgan. All fees payable hereunder and under the Fee Letter shall be paid in immediately available funds in U.S. Dollars and shall not be subject to reduction by way of withholding, setoff or counterclaim or be otherwise affected by any claim or dispute related to any other matter. In addition, all fees payable hereunder shall be paid without deduction for any taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any national, state or local taxing authority, or will be grossed up by you for such amounts.

6. Conditions

The Commitment Party’s commitments and agreements hereunder are subject solely to the conditions set forth in Exhibit C (the “Funding Conditions”), and upon satisfaction (or waiver by JPMorgan) of such conditions, the funding of the Credit Facility shall occur; it being understood and agreed that there are no other conditions (express or implied) to the commitments hereunder, other than those that are expressly stated in Exhibit C hereto.

Notwithstanding anything in this Commitment Letter (including each of the exhibits attached hereto), the Fee Letter or the Credit Facility Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, the only representations the accuracy of which shall be a condition to availability of the Credit Facility on the Closing Date shall be (i) such of the representations made by or with respect to the Target and its subsidiaries in the Purchase Agreement as are material to the interests of the Lenders, but only to the extent that the Company (or an affiliate thereof) has the right to terminate its obligations under the Purchase Agreement or to decline to consummate the Acquisition in accordance with the terms of the Purchase Agreement as a result of a breach of such representations in the Purchase Agreement (the “Specified Purchase Agreement Representations”)

 

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and (ii) the Specified Representations (as defined in the Credit Agreement). The terms of the Credit Facility Documentation shall be in a form such that they do not impair the availability of the Credit Facility on the Closing Date if the Funding Conditions are satisfied (or waived by JPMorgan); provided that, to the extent any security interest in any Collateral (as defined in the Credit Facility Documentation) is not or cannot be provided and/or perfected on the Closing Date (other than any intended Collateral with respect to which the security interest in which may be perfected solely by the filing of a financing statement under the Uniform Commercial Code or the possession of stock certificates) after your use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Credit Facility on the Closing Date, but instead shall be required to be delivered, or a security interest therein perfected, after the Closing Date pursuant to arrangements and timing to be mutually agreed by JPMorgan, as Administrative Agent, and the Company, as Borrower, acting reasonably but in any event not more than 45 days after the Closing Date (as such period may be extended by JPMorgan, as Administrative Agent, in its reasonable discretion). This paragraph, and the provisions herein, shall be referred to as the “Limited Conditionality Provision”.

7. Limitation of Liability, Indemnity, Settlement

 

  (a)

Limitation of Liability.

You agree that (i) in no event shall any of JPMorgan and its affiliates and its and their officers, directors, employees, members, partners, advisors, agents and other representatives (each, and including, without limitation, JPMorgan, an “Arranger-Related Person”) have any Liabilities, on any theory of liability, for any special, indirect, consequential or punitive damages incurred by you, your affiliates or your respective equity holders arising out of, in connection with, or as a result of, this Commitment Letter, the Fee Letter, the Transactions (including the Credit Facility and the use of proceeds thereunder) or any other agreement or instrument contemplated hereby, (ii) no Arranger-Related Person shall have any Liabilities arising from, or be responsible for, the use by others of Information or other materials (including, without limitation, any personal data) obtained through electronic, telecommunications or other information transmission systems, including an Electronic Platform or otherwise via the internet, except to the extent that such damages have resulted from the willful misconduct, bad faith or gross negligence of such Arranger-Related Person (or its controlled affiliates and controlling persons and their respective officers, directors, employees, members, partners, advisors, agents and other representatives)(as determined by a court of competent jurisdiction in a final, non-appealable judgment) and (iii) none of you (or any of your subsidiaries) or the Target (or any of its subsidiaries or affiliates) or any of your and their respective equity investors shall be liable for any special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of, this Commitment Letter, the Fee Letter, the Transactions (including the Credit Facility and the use of proceeds thereunder) or any other agreement or instrument contemplated hereby; provided that, nothing in this clause (a) shall relieve you of any obligation you may have to indemnify an Indemnified Person, as provided in clause (b) below, against any special, indirect, consequential or punitive damages asserted against such Indemnified Person by a third party. You agree, to the extent permitted by applicable law, to not assert any claims against any Arranger-Related Person with respect to any of the foregoing. As used herein, the term “Liabilities” shall mean any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

 

  (b)

Indemnity.

You agree (A) to (i) indemnify and hold harmless each of JPMorgan and its affiliates and its and their respective officers, directors, employees, advisors, and agents (each, and including, without limitation, JPMorgan, an “Indemnified Person”) from and against any and all Liabilities and related expenses to which any such Indemnified Person may become subject arising out of or in connection with

 

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this Commitment Letter, the Credit Facility, the use of the proceeds thereof, any related transaction or the activities performed or the commitments or services furnished pursuant to this Commitment Letter or the role of JPMorgan in connection therewith or in connection with any actual or prospective claim, litigation, investigation, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction relating to any of the foregoing (including in relation to enforcing the terms of clause (a) above and the terms of this clause (b)) (each, a “Proceeding”), regardless of whether or not any Indemnified Person is a party thereto and whether or not such Proceeding is brought by you, your equity holders, affiliates, creditors or any other person and (ii) reimburse each Indemnified Person within 10 business days of written demand for any reasonable and documented legal fees (limited to one firm of counsel for all Indemnified Persons, taken as a whole and, if reasonably necessary, a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for all such Indemnified Persons, taken as a whole (and, in the case of an actual or perceived conflict of interest where any Indemnified Person affected by such conflict notifies you of the existence of such conflict and thereafter retains its own counsel, one other firm of counsel for such similarly affected Indemnified Person))) or other reasonable and documented fees and expenses incurred in connection with investigating or defending any of the foregoing, regardless of whether or not in connection with any pending or threatened Proceeding to which any Indemnified Person is a party, in each case as such expenses are incurred or paid; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to any Liabilities or related expenses to the extent they are found by a final, non-appealable judgment of a court of competent jurisdiction to (I) primarily result from the willful misconduct, bad faith or gross negligence of such Indemnified Person in performing its activities or in furnishing its commitments or services under this Commitment Letter or any of JPMorgan’s affiliates under this Commitment Letter, (II) result from material breach of the obligations of such Indemnified Person under this Commitment Letter, the Fee Letter or the Credit Facility or (III) have not resulted from an act or omission by you or any of your affiliates and have been brought by an Indemnified Person against any other Indemnified Person (other than any claims against JPMorgan in its capacity or in fulfilling its role as an arranger or agent or any similar role hereunder and (B) to reimburse JPMorgan and its affiliates upon the earlier of (x) the Closing Date, in the case of expenses documented on or prior to the Closing Date, and (y) within 10 business days after written demand for all reasonable and documented out-of-pocket expenses (including due diligence expenses, syndication expenses, consultant’s fees and expenses, travel expenses, and reasonable fees, charges and disbursements of counsel (with respect to legal expenses, limited to one firm of counsel to JPMorgan and its affiliates, taken as a whole and, if necessary, a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for JPMorgan and its affiliates, taken as a whole, and of such other counsel retained with your written consent (and, in the case of an actual or perceived conflict of interest where you are notified of the existence of such conflict and any such party thereafter retains its own counsel, one other firm of counsel for such affected party)))) incurred in connection with the Credit Facility and any related documentation (including this Commitment Letter, the Fee Letter and the definitive documentation relating to the Credit Facility) or the administration, amendment, modification or waiver thereof.

 

  (c)

Settlement.

You shall not, without the prior written consent of JPMorgan (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought hereunder by JPMorgan unless (x) such settlement includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to JPMorgan from all liability on claims that are the subject matter of such Proceedings and (y) such settlement does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any JPMorgan or any injunctive relief or other non-monetary remedy. You acknowledge that any failure to comply with your obligations under the preceding sentence may cause irreparable harm to JPMorgan and the other Indemnified Persons.

 

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In case any Proceeding is instituted involving any Indemnified Person for which indemnification is to be sought hereunder by such Indemnified Person, then such Indemnified Person will promptly notify you of the commencement of any such Proceeding; provided, that the failure to so notify you will not relieve you from any liability that you may have to such Indemnified Person pursuant to this Section 7 or from any liability that you may have to such Indemnified Person other than pursuant to this Section 7.

8. Affiliate Activities, Sharing of Information, Absence of Fiduciary Relationships

The Commitment Party may employ the services of its affiliates in providing certain services hereunder and, in connection with the provision of such services, may exchange with such affiliates information concerning you and the other companies that may be the subject of the transactions contemplated by this Commitment Letter, and, to the extent so employed, such affiliates shall be entitled to the benefits, and be subject to the obligations, of the Commitment Party hereunder. The Commitment Party shall be responsible for its affiliates’ failure to comply with such obligations under this Commitment Letter.

You acknowledge that the Commitment Party (or an affiliate) is a full service securities firm and such person may from time to time effect transactions, for its own or its affiliates’ account or the account of customers, and hold positions in loans, securities or options on loans or securities of you, the Target, your or their respective affiliates and other companies that may be the subject of the transactions contemplated by this Commitment Letter. You also acknowledge (a) that the Commitment Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise and (b) that the Commitment Party and its affiliates have no obligation to use in connection with the transactions contemplated hereby, or to furnish to you, confidential information obtained from other companies or persons. The Commitment Party and its affiliates will not use confidential information obtained from you, the Target or any of your or their respective subsidiaries or affiliates by virtue of the Transactions or any other transactions contemplated by this Commitment Letter or their other relationships with you, the Target or any of your or their respective subsidiaries or affiliates in connection with the performance by them or their affiliates of services for other persons, and the Commitment Party and its affiliates will not furnish any such information to other persons, except to the extent permitted below. You also acknowledge that the Commitment Party and its affiliates have no obligation to use in connection with the Transactions or any other transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained from other persons.

You agree that the Commitment Party will act under this Commitment Letter as an independent contractor and that nothing in this Commitment Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Party, on the one hand, and you and your respective equity holders or your and their respective affiliates on the other hand. You acknowledge and agree that (a) the transactions contemplated by this Commitment Letter are arm’s-length commercial transactions between the Commitment Party and, if applicable, its affiliates, on the one hand, and you, on the other, (b) in connection therewith and with the process leading to such transaction the Commitment Party and, if applicable, each of its affiliates, is acting solely as a principal and has not been, is not and will not be acting as an advisor, agent or fiduciary of you, your management, equity holders, creditors, affiliates or any other person and (c) with respect to the transactions contemplated hereby or the process leading thereto, the Commitment Party and, if applicable, its affiliates, has not assumed (x) an advisory or fiduciary responsibility in favor of you or your affiliates (irrespective of whether the Commitment Party or any of its affiliates has advised or is currently advising you or your affiliates on other matters (which, for the avoidance of doubt, includes acting as a financial advisor to the Company or any of its affiliates in respect of any transaction related hereto)) or (y) any other obligation except the

 

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obligations expressly set forth in this Commitment Letter. You further acknowledge and agree that (i) you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto, (ii) you are capable of evaluating and understand and accept the terms, risks and conditions of the transactions contemplated hereby, and the Commitment Party shall have no responsibility or liability to you with respect thereto, and (iii) the Commitment Party is not advising the Company as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction, and you shall consult with your own advisors concerning such matters and you shall be responsible for making your own independent investigation and appraisal of the transactions contemplated hereby. Any review by the Commitment Party or any of its affiliates of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Commitment Party and shall not be on behalf of the Company. The Company agrees that it will not claim that the Commitment Party has rendered any advisory services or assert any claim against the Commitment Party based on an alleged breach of fiduciary duty by the Commitment Party in connection with this Commitment Letter and the transactions contemplated hereby or assert any claim based on any actual or potential conflict of interest that might be asserted to arise or result from the engagement of the Commitment Party or any of its affiliates acting as a financial advisor to the Company or any of its affiliates, on the one hand, and the engagement of the Commitment Party hereunder and the transactions contemplated hereby, on the other hand.

9. Confidentiality

This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter nor the Fee Letter nor any of their terms or substance shall be disclosed by you, directly or indirectly, to any other person except (a) you and your officers, directors, employees, affiliates, members, partners, stockholders, attorneys, accountants, agents and advisors and those of the Target and its subsidiaries and the Target itself, in each case on a confidential and need-to-know basis, (provided that any disclosure of the Fee Letter or its terms or substance to the Target or its officers, directors, employees, attorneys, accountants, agents or advisors shall be redacted in a manner reasonably satisfactory to the Commitment Party), and you shall be responsible for any breach by the confidentiality undertaking of any of the foregoing, (b) as may be compelled in any legal, judicial or administrative proceeding or as otherwise required by law or regulation or as requested by a governmental authority (including, for the avoidance of doubt, filings with the SEC or the UK Financial Conduct Authority) (in which case you agree, to the extent permitted by law, to inform us promptly in advance thereof), (c) upon notice to the Commitment Party, this Commitment Letter and the existence and contents hereof (but not the Fee Letter or the contents thereof other than the existence thereof and the contents thereof as part of projections, pro forma information and a generic disclosure of aggregate sources and uses to the extent customary in marketing materials and other required filings) may be disclosed in any prospectus or offering memoranda relating to the Notes, in any syndication or other marketing material in connection with the Credit Facility or in connection with any public filing requirement, (d) marketing term sheets and the Credit Agreement may be disclosed to potential Lenders and to any rating agency in connection with the Acquisition, the Credit Facility and the Notes and (e) if the Commitment Party consents in writing to such proposed disclosure; provided that (i) you may disclose the aggregate fee amounts contained in the Fee Letter as part of a generic disclosure of aggregate sources and uses related to fee amounts applicable to the Transactions to the extent customary or required in offering and marketing materials for the Credit Facility or the Notes or in any public release or filing relating to the Transactions and (ii) to the extent necessary to enforce your rights hereunder. Your obligations under this paragraph (other than in respect of the Fee Letter) shall expire on the date occurring one year after the date of this Commitment Letter.

The Commitment Party will treat all non-public information provided to it by or on behalf of you hereunder or in connection with the Acquisition, the related Transactions and any other transactions contemplated hereby solely for the purpose of negotiating, evaluating and consummating the transactions contemplated hereby and providing the services which are the subject of this Commitment Letter and shall

 

10


treat confidentially and shall not publish, disclose or otherwise divulge, such information; provided that nothing herein shall prevent the Commitment Party and its affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law, rule or regulation, subpoena or compulsory legal process or upon the request or demand of any regulatory authority (including any self-regulatory authority) or other governmental authority purporting to have jurisdiction over the Commitment Party or any of its affiliates (in which case the Commitment Party agrees (except with respect to any audit or examination conducted by bank accountants or any self-regulatory authority or governmental or regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law or regulation, to inform you promptly thereof prior to disclosure), (b) to the extent that such information becomes publicly available other than by reason of improper disclosure by the Commitment Party or any of its affiliates in violation of any confidentiality obligations owing to you hereunder, (c) to the extent that such information is received by the Commitment Party from a third party that is not, to the Commitment Party’s knowledge, subject to contractual or fiduciary confidentiality obligations owing to you with respect to such information, (d) to the extent that such information is independently developed by the Commitment Party or any of its affiliates, (e) to the Commitment Party’s affiliates and their and their respective employees, directors, officers, independent auditors, rating agencies, professional advisors and other experts or agents who need to know such information in connection with the transactions contemplated hereby and who are informed of the confidential nature of such information (with the Commitment Party responsible for its affiliates’ compliance with this paragraph), (f) in connection with the exercise of any remedies hereunder or under the Fee Letter or any suit, action or proceeding relating to this Commitment Letter, the Fee Letter or the Credit Facility and/or (g) to prospective Lenders, hedge providers, participants or assignees (collectively, “Prospective Parties”); provided that for purposes of clause (g) above, (i) the disclosure of any such information to any Prospective Party shall be made subject to such Prospective Party’s written agreement to treat such information confidentially on substantially the terms set forth in this paragraph and (ii) no such disclosure shall be made by the Commitment Party to any Disqualified Lender. If the Credit Facility closes, the Commitment Party’s obligations under this paragraph shall terminate and be superseded by the confidentiality provisions in the definitive documentation relating to the Credit Facility. The provisions of this paragraph shall automatically terminate upon the earlier of (x) the Closing Date and (y) one year following the date of this Commitment Letter.

10. Miscellaneous

This Commitment Letter shall not be assignable by you without the prior written consent of the Commitment Party (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and the Indemnified Persons and is not intended to, and does not confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the Indemnified Persons to the extent expressly set forth herein. The Commitment Party reserves the right to employ the services of its affiliates in providing services contemplated hereby and to allocate, in whole or in part, to its affiliates certain fees payable to the Commitment Party in such manner as the Commitment Party and its affiliates may agree in their sole discretion. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and the Commitment Party. This Commitment Letter and the Fee Letter are the only agreements that have been entered into among us and you with respect to the Credit Facility and set forth the entire understanding of the parties with respect thereto.

This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Commitment Letter, the Fee Letter and/or any document to be signed in connection with this letter agreement and the transactions contemplated hereby shall be deemed to include Electronic Signatures (as defined below),

 

11


deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be. “Electronic Signatures” means any electronic symbol or process attached to, or associated with, any contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.

This Commitment Letter and any claim or controversy arising hereunder or related hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York; provided, that (a) whether the Acquisition has been consummated in accordance with the terms of the Purchase Agreement, (b) the determination of whether a Company Material Adverse Effect (as defined in the Purchase Agreement as in effect on the date hereof) has occurred and is continuing and whether a Specified Purchase Agreement Representation is true and correct and whether the Company has the right to terminate its obligations under the Purchase Agreement or to decline to consummate the Acquisition in accordance with the terms of the Purchase Agreement shall be determined under the law of the State of Delaware. You and we hereby consent to the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York sitting in the Borough of Manhattan (or if such court lacks subject matter jurisdiction, the Supreme Court of the State of New York sitting in the Borough of Manhattan). Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, (a) any right it may have to a trial by jury in any legal proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory) and (b) any objection that it may now or hereafter have to the laying of venue of any such legal proceeding in the federal or state courts located in the City of New York, Borough of Manhattan. You and we agree that service of any process, summons, notice or document by registered mail addressed to you or us shall be effective service of process for any suit, action or proceeding brought in any such court. You and we hereby irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in any inconvenient forum. You and we hereby irrevocably agree to waive trial by jury in any suit, action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of the Transactions, this Commitment Letter or the Fee Letter or the performance of services hereunder or thereunder.

The Commitment Party hereby notifies you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”) and 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), it and its affiliates are required to obtain, verify and record information that identifies the Borrower and the Guarantors (if any), which information includes the name, address, tax identification number and other information regarding the Borrower and the Guarantors (if any) that will allow JPMorgan to identify the Borrower and the Guarantors (if any) in accordance with the Patriot Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the Patriot Act and Beneficial Ownership Regulation and is effective for each of the Commitment Party and the Lenders, and each of their respective affiliates.

The compensation, reimbursement, affiliate activities, indemnification, jurisdiction, governing law, waiver of jury trial, syndication, absence of fiduciary relationships, electronic signatures and confidentiality provisions contained herein and in the Fee Letter and any other provision herein or therein which by its terms expressly survives the termination of this Commitment Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder.

This Commitment Letter and the Fee Letter set forth the entire agreement between the parties with respect to the matters addressed herein and supersedes all prior communications, written or oral, with respect hereto. Each of the parties hereto agrees that (i) this Commitment Letter is a binding and

 

12


enforceable agreement with respect to the subject matter contained herein, including the good faith negotiation of the Credit Facility Documentation by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the commitments provided hereunder is subject only to the satisfaction or waiver of the Funding Conditions and (ii) the Fee Letter is a binding and enforceable agreement with respect to the subject matter contained therein.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and the Fee Letter by returning to us executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City time, on December 9, 2020. This offer will automatically expire at such time if we have not received such executed counterparts in accordance with the preceding sentence. In the event that the initial borrowing under the Credit Facility does not occur on or before the Expiration Date, then this Commitment Letter and the commitments hereunder shall automatically terminate unless we shall, in our discretion, agree to an extension. “Expiration Date” means the earliest of (i) June 9, 2021, (ii) the closing of the Acquisition without the use of the Credit Facility and (iii) the termination of the Purchase Agreement prior to closing of the Acquisition.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

13


We are pleased to have been given the opportunity to assist you in connection with this important financing.

 

Very truly yours,
JPMORGAN CHASE BANK, N.A.
By:  

/s/ Peter Thauer

Name: Peter Thauer
Title: Managing Director

Signature Page to Bridge Commitment Letter


Accepted and agreed to as of the date first above written:
TECHTARGET, INC.
By:  

/s/ Daniel Noreck

Name: Daniel Noreck
Title: Chief Financial Officer

Signature Page to Bridge Commitment Letter


EXHIBIT B TO COMMITMENT LETTER

 

 

 

CREDIT AGREEMENT

dated as of

December [_], 2020,

among

TECHTARGET, INC.,

as Borrower,

The LENDERS Party Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

JPMORGAN CHASE BANK, N.A.,

as Sole Lead Arranger and Sole Bookrunner

 

 

 


Table of Contents

 

         Page  
ARTICLE I

 

Definitions

 

SECTION 1.01.        

 

Defined Terms

     5  

SECTION 1.02.

 

Classification of Loans and Borrowings

     48  

SECTION 1.03.

 

Terms Generally

     48  

SECTION 1.04.

 

Accounting Terms; GAAP; Pro Forma Calculations

     48  

SECTION 1.05.

 

Excluded Swap Obligations

     50  

SECTION 1.06.

 

Interest Rate; LIBOR Notification

     50  

SECTION 1.07.

 

Divisions

     50  
ARTICLE II

 

The Credits

 

SECTION 2.01.

 

Commitments

     51  

SECTION 2.02.

 

Loans and Borrowings

     51  

SECTION 2.03.

 

Requests for Borrowings

     51  

SECTION 2.04.

 

Funding of Borrowings

     52  

SECTION 2.05.

 

Interest Elections

     53  

SECTION 2.06.

 

Termination and Reduction of Commitments

     54  

SECTION 2.07.

 

Repayment of Loans; Evidence of Debt

     54  

SECTION 2.08.

 

Prepayment of Loans; Mandatory Prepayment of Term Loans

     55  

SECTION 2.09.

 

Fees

     56  

SECTION 2.10.

 

Interest

     56  

SECTION 2.11.

 

Alternate Rate of Interest

     57  

SECTION 2.12.

 

Increased Costs

     59  

SECTION 2.13.

 

Break Funding Payments

     60  

SECTION 2.14.

 

Taxes

     61  

SECTION 2.15.

 

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

     65  

SECTION 2.16.

 

Mitigation Obligations; Replacement of Lenders

     66  

SECTION 2.17.

 

Defaulting Lenders

     67  
ARTICLE III

 

Representations and Warranties

 

SECTION 3.01.

 

Organization; Powers

     68  

SECTION 3.02.

 

Authorization; Enforceability

     68  

SECTION 3.03.

 

Governmental Approvals; No Conflicts

     69  

SECTION 3.04.

 

Financial Condition; No Material Adverse Change

     69  

SECTION 3.05.

 

Properties

     70  

 

i


SECTION 3.06.

 

Litigation and Environmental Matters

     70  

SECTION 3.07.

 

Compliance with Laws and Agreements; No Default

     70  

SECTION 3.08.

 

Investment Company Status

     71  

SECTION 3.09.

 

Taxes

     71  

SECTION 3.10.

 

ERISA and Labor Matters

     71  

SECTION 3.11.

 

Subsidiaries

     71  

SECTION 3.12.

 

Solvency

     72  

SECTION 3.13.

 

Disclosure

     72  

SECTION 3.14.

 

Collateral Matters

     72  

SECTION 3.15.

 

Federal Reserve Regulations

     73  

SECTION 3.16.

 

Anti-Corruption Laws and Sanctions

     74  

SECTION 3.17.

 

Use of Proceeds

     74  

SECTION 3.18.

 

USA PATRIOT Act

     74  

SECTION 3.19.

 

Acquisition Agreement

     74  

SECTION 3.20.

 

EEA Financial Institution

     74  

SECTION 3.21.

 

Data Security

     74  

SECTION 3.22.

 

Plan Assets; Prohibited Transactions

     74  
ARTICLE IV

 

Conditions

 

SECTION 4.01.

 

Effective Date

     75  

SECTION 4.02.

 

Closing Date

     76  
ARTICLE V

 

Affirmative Covenants

 

SECTION 5.01.

 

Financial Statements and Other Information

     78  

SECTION 5.02.

 

Notices of Material Events

     80  

SECTION 5.03.

 

Information Regarding Collateral

     81  

SECTION 5.04.

 

Existence; Conduct of Business

     81  

SECTION 5.05.

 

Maintenance of Properties

     81  

SECTION 5.06.

 

Insurance

     81  

SECTION 5.07.

 

Books and Records; Inspection and Audit Rights

     82  

SECTION 5.08.

 

Compliance with Laws

     82  

SECTION 5.09.

 

Use of Proceeds

     83  

SECTION 5.10.

 

Additional Subsidiaries

     83  

SECTION 5.11.

 

Further Assurances

     83  

SECTION 5.12.

 

After-Acquired Real Property

     83  

SECTION 5.13.

 

Environmental Compliance

     84  

SECTION 5.14.

 

Designation of Subsidiaries

     84  

 

ii


ARTICLE VI

 

Negative Covenants

 

SECTION 6.01.

 

Indebtedness; Certain Equity Securities

     85  

SECTION 6.02.

 

Liens

     87  

SECTION 6.03.

 

Fundamental Changes

     88  

SECTION 6.04.

 

Investments, Loans, Advances, Guarantees and Acquisitions

     89  

SECTION 6.05.

 

Asset Sales

     91  

SECTION 6.06.

 

Sale/Leaseback Transactions

     93  

SECTION 6.07.

 

Hedging Agreements

     93  

SECTION 6.08.

 

Restricted Payments; Certain Payments of Indebtedness

     93  

SECTION 6.09.

 

Transactions with Affiliates

     95  

SECTION 6.10.

 

Restrictive Agreements

     96  

SECTION 6.11.

 

Amendment of Material Documents

     96  

SECTION 6.12.

 

Fiscal Year

     97  

SECTION 6.13.

 

Total Leverage Ratio

     97  
ARTICLE VII

 

Events of Default

 

ARTICLE VIII

 

The Administrative Agent

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01.

 

Notices

     110  

SECTION 9.02.

 

Waivers; Amendments

     111  

SECTION 9.03.

 

Expenses; Limitation of Liability; Indemnity, Etc.

     113  

SECTION 9.04.

 

Successors and Assigns

     116  

SECTION 9.05.

 

Survival

     120  

SECTION 9.06.

 

Counterparts; Integration; Effectiveness; Electronic Signatures

     120  

SECTION 9.07.

 

Severability

     122  

SECTION 9.08.

 

Right of Setoff

     122  

SECTION 9.09.

 

Governing Law; Jurisdiction; Consent to Service of Process

     122  

SECTION 9.10.

 

WAIVER OF JURY TRIAL

     123  

SECTION 9.11.

 

Headings

     123  

SECTION 9.12.

 

Confidentiality; Material Non-Public Information

     124  

SECTION 9.13.

 

Interest Rate Limitation

     125  

SECTION 9.14.

 

Release of Liens and Guarantees

     125  

SECTION 9.15.

 

USA PATRIOT Act Notice

     126  

SECTION 9.16.

 

No Fiduciary Relationship

     126  

SECTION 9.17.

 

[Reserved]

     127  

SECTION 9.18.

 

Judgment Currency

     127  

SECTION 9.19.

 

Acknowledgement and Consent to Bail-In of Affected Financial Institutions

     127  

SECTION 9.20.

 

Acknowledgement Regarding Any Supported QFCs

     128  

SECTION 9.21.

 

Certain ERISA Matters

     128  

 

iii


SCHEDULES:

 

Schedule 2.01      Commitments
Schedule 3.06(a)      Litigation
Schedule 3.06(b)      Environmental Matters
Schedule 3.11      Subsidiaries
Schedule 6.01      Existing Indebtedness
Schedule 6.02      Existing Liens
Schedule 6.04      Existing Investments
Schedule 6.10      Existing Restrictions
EXHIBITS:     
Exhibit A      Form of Assignment and Assumption
Exhibit B      Form of Borrowing Request
Exhibit C      Form of Collateral Agreement
Exhibit D      Form of Compliance Certificate
Exhibit E      Form of Interest Election Request
Exhibit F-1      Form of U.S. Tax Compliance Certificate for Non-U.S. Lenders that are not Partnerships for U.S. Federal Income Tax Purposes
Exhibit F-2      Form of U.S. Tax Compliance Certificate for Non-U.S. Participants that are not Partnerships for U.S. Federal Income Tax Purposes
Exhibit F-3      Form of U.S. Tax Compliance Certificate for Non-U.S. Participants that are Partnerships for U.S. Federal Income Tax Purposes
Exhibit F-4      Form of U.S. Tax Compliance Certificate for Non-U.S. Lenders that are Partnerships for U.S. Federal Income Tax Purposes
Exhibit G      Form of Closing Certificates
Exhibit H      Form of Guarantee Agreement
Exhibit I      Form of Perfection Certificate
Exhibit J      Form of Solvency Certificate

 

iv


CREDIT AGREEMENT dated as of December [_], 2020, among TECHTARGET, INC., a corporation organized under the laws of Delaware, as Borrower, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

ABR”, when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, shall bear interest at a rate determined by reference to the Alternate Base Rate.

Acquisition Agreement” means that certain Equity Purchase Agreement, dated as of December 9, 2020, among the Borrower, the Target and the sellers and other parties party thereto (and all schedules, exhibits, disclosure letters and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith).

Adjusted LIBO Rate” means with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

Administrative Agent” means JPMorgan Chase Bank, N.A. (including its branches and affiliates), in its capacity as administrative agent hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article VIII.

Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affiliate” means, with respect to a specified Person, another Person that directly or indirectly Controls or is Controlled by or is under common Control with the Person specified.

Agreement” means this Credit Agreement, as the same may be modified, amended, restated or supplemented from time to time.

Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 12 of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in Dollars with a maturity of one month plus 1% provided that for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period,

 

5


the Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.11 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.11(b)), then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 2.00%, such rate shall be deemed to be 2.00% for purposes of this Agreement.

Ancillary Document” has the meaning set forth in Section 9.06(b).

Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

Applicable Creditor” has the meaning set forth in Section 9.18(b).

Applicable Funding Account” means the applicable account of the Borrower that shall be specified in the applicable Borrowing Request (and, in the case of any account located outside the United States, reasonably approved by the Administrative Agent).

Applicable Parties” has the meaning set forth in Section 8.03.

Applicable Rate” means (a) with respect to any Eurocurrency Loan, 2.50% and (b) with respect to any ABR Loan, 1.50%.

Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course of its activities and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Arranger” means JPMorgan Chase Bank, N.A., in its capacity as sole lead arranger and sole bookrunner for the credit facilities provided for herein.

Asset Sale” means any Disposition of property or series of related Dispositions of property.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee, with the consent of any Person whose consent is required by Section 9.04, and accepted by the Administrative Agent, substantially in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent and the Borrower.

 

6


Availability Period” means the period starting on the Closing Date and ending on the earliest to occur of (a) the Maturity Date, (b) the date on which the Target Acquisition has been achieved without the making of any Term Loans and (c) the date of the termination of the Acquisition Agreement prior to the Target Acquisition.

Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (f) of Section 2.11.

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any order for relief in such proceeding entered in respect thereof; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the United States or any other relevant jurisdiction or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Benchmark” means, initially, LIBO Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to LIBO Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) or clause (c) of Section 2.11.

 

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Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

(1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

(2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

(3) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment;

provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).

If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent:

(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;

 

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(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

(2) for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities;

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein;

 

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(3) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to Section 2.11(c); or

(4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.

 

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For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.11 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.11.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

Borrower” means TechTarget, Inc., a corporation organized under the laws of the State of Delaware.

Borrowing” means Loans of the same Type made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect.

Borrowing Minimum” means $500,000.

Borrowing Multiple” means $100,000.

Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be substantially in the form of Exhibit B or any other form approved by the Administrative Agent.

Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in U.S. Dollars in the London interbank market.

Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP,

 

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subject to Section 1.04. The amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. For purposes of Section 6.02, a Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased and such property shall be deemed to be owned by the lessee.

CFC” means (a) a “controlled foreign corporation” within the meaning of Section 957 of the Code.

CFC Holding Company” means any direct or indirect Domestic Subsidiary of the Borrower that has no material assets other than Equity Interests in and/or debt of one or more direct or indirect Foreign Subsidiaries that are CFCs.

Change in Control” means (a) occupation of a majority of the seats (other than vacant seats) on the Board of Directors of the Borrower by Persons who were neither (i) nominated by the Board of Directors of the Borrower nor (ii) appointed or approved by directors so nominated or (b) any person or group or persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership or control in one or more series of transactions of more than 35.0% of the common Equity Interests or 35.0% of the voting power of the Equity Interests of the Borrower entitled to vote on the election of members of the Board of Directors of the Borrower.

Change in Law” means the occurrence, after the Effective Date, of any of the following: (a) the adoption or taking effect of any rule, regulation, treaty or other law, (b) any change in any rule, regulation, treaty or other law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

Charges” has the meaning set forth in Section 9.13.

Closing Date” means the date on which the conditions specified in Section 4.02 are satisfied (or waived in accordance with Section 9.02).

Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

Collateral” means any and all assets, whether real or personal, tangible or intangible, on which Liens are granted pursuant to the Security Documents as security for the Obligations.

 

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Collateral Agreement” means the Collateral Agreement among the Borrower, the other Loan Parties and the Administrative Agent, substantially in the form of Exhibit C.

Collateral and Guarantee Requirement” means, at any time, the requirement that:

(a) the Administrative Agent shall have received from the Borrower and each Designated Subsidiary either (i) counterparts of the Guarantee Agreement (if applicable) and the applicable Security Documents duly executed and delivered on behalf of such Person or (ii) in the case of any Person that becomes a Designated Subsidiary after the Closing Date, a counterpart or supplement to the Guarantee Agreement and the applicable Security Documents, substantially in the form specified therein (or as otherwise agreed by the Administrative Agent), duly executed and delivered on behalf of such Person, together with documents of the type referred to in paragraphs (b)(i), (b)(ii), (b)(iii) and (b)(iv) of Section 4.01 and, to the extent reasonably requested by the Administrative Agent, opinions of the type referred to in paragraph (b)(v) of Section 4.01, with respect to such Designated Subsidiary;

(b) (i) all outstanding Equity Interests in any Significant Subsidiary (other than Excluded Equity Interests), in each case directly owned by any Loan Party, shall have been pledged pursuant to the Collateral Agreement and (ii) the Administrative Agent shall, to the extent such Equity Interests are certificated securities, have received certificates or other instruments representing all such Equity Interests, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c) all Indebtedness that is owing to any Loan Party in an aggregate principal amount in excess of $7,500,000 shall be evidenced by a promissory note and shall have been pledged pursuant to the Collateral Agreement or a supplement to the Collateral Agreement, and the Administrative Agent shall have received all such promissory notes, together with undated instruments of transfer with respect thereto endorsed in blank;

(d) all documents and instruments, including Uniform Commercial Code financing statements, required by Requirements of Law or reasonably requested by the Administrative Agent to be filed, registered or recorded to evidence the Liens intended to be created by the Security Documents and perfect such Liens to the extent required by, and with the priority required by, the Security Documents and the other provisions of the term “Collateral and Guarantee Requirement” and the requirements of this Agreement, shall have been filed, registered or recorded or delivered to (or provided by, as applicable) the Administrative Agent for filing, registration or recording; and

(e) the Administrative Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) with respect to each Mortgaged Property located in the United States, a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid and enforceable Lien on the Mortgaged Property described therein, free of any other Liens except as permitted under Section 6.02, together with such endorsements as the Administrative Agent may reasonably request, (iii) with respect to each Mortgaged Property located

 

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outside the United States, such title reports and other documentation as is customary in such jurisdiction in connection with the mortgage of property in comparable transactions, (iv) if the Borrower is in receipt of a Standard Flood Hazard Determination that shows that a Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the Borrower shall (prior to the delivery of a counterpart to the Mortgage for such Mortgaged Property) deliver to the Administrative Agent evidence of such flood insurance as may be required under applicable law or regulations, including Regulation H of the Board of Governors, and in any event in form and substance reasonably satisfactory to the Administrative Agent and (v) any surveys as may exist at such time with respect to any such Mortgaged Property and any legal opinions as the Administrative Agent may reasonably request with respect to any such Mortgage.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, (a) the Loan Parties shall have the time periods specified in Section 5.11 to satisfy the Collateral and Collateral and Guarantee Requirement with respect to Designated Subsidiaries newly acquired or formed (or which first become Designated Subsidiaries) after the Closing Date and with respect to assets acquired after the Closing Date that do not automatically constitute Collateral under the Collateral Agreement, (b) the foregoing provisions of this definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance, legal opinions or other deliverables with respect to, particular assets of the Loan Parties, or the provision of Guarantees by any Subsidiary, as to which the Administrative Agent and the Borrower reasonably agree that the cost of creating or perfecting such pledges or security interests in such assets, or obtaining such title insurance, legal opinions or other deliverables in respect of such assets, or providing such Guarantees (taking into account any adverse tax consequences to the Borrower and the Subsidiaries), shall be excessive in view of the benefits to be obtained by the Lenders therefrom, (c) Liens required to be granted from time to time pursuant to the term “Collateral and Guarantee Requirement” shall be subject to exceptions and limitations set forth in the Security Documents and, to the extent appropriate in the applicable jurisdiction, as reasonably agreed between the Administrative Agent and the Borrower, (d) in no event shall the Collateral include any Excluded Assets, (e) no Person shall be required to Guarantee the Obligations or grant security therefor if to do so would conflict with the fiduciary duties of its directors or contravene any legal prohibition or result in a risk of personal or criminal liability on the part of any officer or director thereof, (f) the requirement to enter into the Guarantee Agreement and any Security Document and the terms of each such agreement shall be subject to general statutory limitations, financial assistance, capital maintenance, corporate benefit, fraudulent preference, “thin capitalization” rules, retention of title claims, exchange control restrictions, ineffectiveness of agency provisions, and similar principles that may limit the ability of any Person to provide a Guarantee or security to the Administrative Agent or the Lenders or may require that the Guarantee or security be limited by an amount or otherwise; provided, that each such affected Person that is otherwise required to be a Loan Party shall use commercially reasonable efforts to provide the maximum permissible credit support and to assist in demonstrating that adequate corporate benefit accrues to any relevant entity, and (g) the maximum Guaranteed or secured amount may be limited due to legal or regulatory limitations, or, in the Administrative Agent’s reasonable discretion, to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties. Notwithstanding any other provision of any Loan Document, the Guarantee given by any Subsidiary that becomes a Subsidiary Guarantor (as

 

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defined in the Guarantee Agreement) after the Closing Date (an “Additional Guarantor”) shall be subject to the limitations consistent with this definition and such limitations shall be set forth in the Guarantee Agreement or in the Supplement (as defined in the Guarantee Agreement) applicable to such Additional Guarantor. The Administrative Agent may, without the consent of any Lender, grant extensions of time for the creation and perfection of security interests in or the obtaining of title insurance, legal opinions or other deliverables with respect to particular assets or the provision of any Guarantee by any Designated Subsidiary (including extensions beyond the Closing Date or in connection with assets acquired, or Designated Subsidiaries formed or acquired, after the Closing Date) where it and the Borrower reasonably agree that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Security Documents. In addition, in no event shall (a) control agreements or control or similar arrangements be required with respect to cash deposit or securities accounts, (b) notice be required to be sent to account debtors or other contractual third parties prior to the occurrence and absent the continuance of an Event of Default, (c) perfection be required with respect to letter of credit rights (except to the extent perfected through the filing of Uniform Commercial Code financing statements), (d) security documents governed by the laws of a jurisdiction other than the United States, any State thereof, the District of Columbia or the jurisdiction of incorporation of the relevant Loan Party be required, (e) filings be required to be made against Intellectual Property in any jurisdiction other than the United States or the relevant jurisdiction of registering of such Intellectual Property or (f) landlord, warehouse or bailee waivers be required for leased or used real property.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, to the extent any security interest in any Collateral is not or cannot be provided and/or perfected on the Effective Date and/or Closing Date (other than any intended Collateral with respect to which the security interest in which may be perfected solely by the filing of a financing statement under the Uniform Commercial Code or the possession of certificated Equity Interest) after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent under Sections 4.01 or 4.02, as applicable, but instead shall be required to be delivered, or a security interest therein perfected, after the Closing Date pursuant to arrangements and timing to be mutually agreed by the Administrative Agent and the Borrower, acting reasonably but in any event not more than 45 days after the Closing Date (as such period may be extended by the Administrative Agent, in its reasonable discretion).

Commitment” means with respect to any Lender, such Lender’s Term Loan Commitment.

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S. C. § 1 et seq.), as amended from time to time, and any successor statute.

Communications” has the meaning set forth in Section 8.03.

Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit D or any other form approved by the Administrative Agent.

 

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Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, plus without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of:

(a) (i) Consolidated Interest Expense for such period (including imputed interest expense in respect of Capital Lease Obligations),

(ii) provision for taxes based on income, profits or losses, including foreign withholding taxes, and for corporate franchise, capital stock, net worth and value-added taxes, in each case during such period,

(iii) all amounts attributable to depreciation, depletion and amortization for such period (excluding amortization expense attributable to a prepaid cash expense that was paid in a prior period),

(iv) any extraordinary losses or charges for such period, determined on a consolidated basis in accordance with GAAP,

(v) any Non-Cash Charges for such period; provided that any cash payment made with respect to any Non-Cash Charges added back in computing Consolidated EBITDA for any prior period pursuant to this clause (a)(v) (or that would have been added back had this Agreement been in effect during such prior period) shall be subtracted in computing Consolidated EBITDA for the period in which such cash payment is made,

(vi) any losses for such period attributable to early extinguishment of Indebtedness or obligations under any Hedging Agreement,

(vii) any unrealized losses for such period attributable to the application of “mark to market” accounting in respect of Hedging Agreements,

(viii) the cumulative effect for such period of a change in accounting principles,

(ix) Transaction Costs related to the Transactions and any non-recurring fees, costs and expenses incurred or payable by the Borrower or any of its Subsidiaries in connection with any Permitted Acquisition or Specified Transaction or any other asset acquisitions permitted hereunder,

(x) any impact for expenses related to an asset acquisition that would have otherwise been capitalized if it were treated as the acquisition of a business, in each case, consistent with past practices, and

 

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(xi) any revenue that would have been recognized but for a reduction related to the application of purchase accounting (including, without limitation, revenues of the Target or of any target for a Permitted Acquisition or Specified Transaction); minus

(b) without duplication and to the extent included in determining such Consolidated Net Income:

(i) any extraordinary gains for such period, determined on a consolidated basis in accordance with GAAP,

(ii) any non-cash gains for such period, including with respect to write-ups of assets or goodwill, determined on a consolidated basis in accordance with GAAP,

(iii) any gains attributable to the early extinguishment of Indebtedness or obligations under any Hedging Agreement, determined on a consolidated basis in accordance with GAAP,

(iv) the cumulative effect for such period of a change in accounting principles; and

(v) any unrealized gains for such period attributable to the application of “mark to market” accounting in respect of Hedging Agreements.

provided further that, Consolidated EBITDA for any period shall be calculated (A) so as to exclude (without duplication of any adjustment referred to above) non-cash foreign translation gains and losses and (B) with respect to changes in accounting standards, in accordance with Section 1.04.

Consolidated Interest Expense” means, with reference to any period, the Interest Expense of the Borrower and its Subsidiaries calculated on a consolidated basis in accordance with GAAP for such period.

Consolidated Net Income” means, for any period, the net income or loss of the Borrower and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication: (1) the cumulative effect of any change in accounting principles during such period; (2) any net after-tax income or loss from discontinued operations; (3) the effects of any non-cash adjustments in the inventory, property and equipment, software, goodwill, other intangible assets, in-process research and development, deferred revenue, debt line items, any earn-out obligations and any other non-cash charges (other than the amortization of unfavorable operating leases) in the Borrower’s consolidated financial statements pursuant to GAAP, in each case for this clause (3), to the extent such adjustment or other amount is non-cash and results from the application of purchase accounting in relation to any consummated Permitted Acquisition; and (4) the income of any Person (other than the Borrower) that is not a consolidated Subsidiary or that is accounted for by the equity method of accounting, except to the extent of the amount of cash dividends or other cash distributions actually paid by such Person to the Borrower or, any consolidated Subsidiary during such period.

 

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Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

Covered Entity” means any of the following:

 

  (i)

a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

  (ii)

a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

  (iii)

a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

Covered Party” has the meaning assigned to it in Section 9.20.

Credit Party” means the Administrative Agent and each Lender.

Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

Default” means any event or condition that constitutes, or upon notice, lapse of time or both would constitute, unless cured or waived, an Event of Default.

Debt Fund Affiliate” means any Affiliate of a Disqualified Lender pursuant to clauses (b) or (c) of the definition thereof that is a bona fide debt fund, an investment vehicle, a regulated bank entity or unregulated lending entity that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course which is managed, sponsored or advised by any person controlling, controlled by or under common control with any Disqualified Lender or any Affiliate thereof or any competitor, as applicable, and for which no personnel involved with the investment of such competitor or affiliate thereof, as applicable, (i) makes any investment decisions or (ii) has access to any information (other than information publicly available) relating to the Borrower or Target or any entity that forms a part of the Borrower’s or Target’s business (including Subsidiaries of the Borrower or subsidiaries of Target).

Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

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Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified in such writing, including, if applicable, by reference to a specific Default and supported by reasonable background information provided by such Lender in writing) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent to funding (specifically identified in such writing, including, if applicable, by reference to a specific Default and supported by reasonable background information provided by such Lender in writing) cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, made in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund Loans under this Agreement; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such written certification, (d) has become the subject of a Bankruptcy Event or (e) has become the subject of a Bail-in Action. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower and each Lender.

Designated Subsidiary” means each Significant Subsidiary that is not an Excluded Subsidiary.

Disposition” has the meaning set forth in Section 6.05.

Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition:

(a) matures or is mandatorily redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;

(b) is convertible or exchangeable, either mandatorily or at the option of the holder thereof, for Indebtedness or Equity Interests (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests); or

 

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(c) is redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests) or is required to be repurchased by the Borrower or any Subsidiary, in whole or in part, at the option of the holder thereof;

in each case, on or prior to the date that is 91 days after the Maturity Date (determined as of the date of issuance thereof or, in the case of any such Equity Interests outstanding on the Closing Date, the Closing Date); provided, however, that (i) an Equity Interest in any Person that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Equity Interest upon the occurrence of an “asset sale” or a “change of control” (or similar event, however denominated) shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after repayment in full of all the Loans and all other Loan Document Obligations that are accrued and payable and the termination or expiration of the Commitments and (ii) an Equity Interest in any Person that is issued to any employee or to any plan for the benefit of employees or by any such plan to such employees shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by such Person or any of its subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

Disqualified Lenders” means (a) those banks, financial institutions and other institutional lenders and investors or persons who are separately identified by name in writing by the Borrower to the Arranger on or prior to December 9, 2020, (b) those persons who are competitors of the Borrower and its Subsidiaries or of the Target and its subsidiaries that are separately identified by name in writing by the Borrower to the Administrative Agent from time to time, and (c) in the case of each of clauses (a) and (b), any of their Affiliates that are identified by name in writing by the Borrower to the Administrative Agent from time to time, or that are clearly identifiable on the basis of the similarity of their name to the name of any entity set forth on the list of Disqualified Lenders (other than, in the case of clauses (b) and (c), any affiliate that is a Debt Fund Affiliate of such Disqualified Lenders); provided that (i) delivery of any written notice with respect to the foregoing shall be made to the Administrative Agent by e-mail to [Redacted.]), (ii) any update pursuant to clauses (b) or (c) above shall not become effective until the third business day following the Administrative Agent’s receipt of such notice and (iii) no such updates pursuant to clauses (b) or (c) shall be deemed to retroactively disqualify any banks, financial institutions, institutional lenders, investors or persons that have previously acquired (or entered into a trade for) an assignment or participation interest in the Commitments or the Loans from continuing to hold or vote such previously acquired assignments and participations on terms for Lenders that are not Disqualified Lenders. For the avoidance of doubt the Administrative Agent shall be permitted provide such list of Disqualified Lenders to the Lenders and prospective Lenders. The Borrower shall be permitted to remove banks, financial institutions and other institutional lenders and investors or persons from the list of Disqualified Lenders by notice to the Administrative Agent. In no event shall the Administrative Agent be obligated to ascertain, monitor or inquire as to whether any prospective assignee is a Disqualified Institution or have any liability with respect to any assignment made to a Disqualified Institution.

Domestic Subsidiary” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

Early Opt-in Election” means, if the then-current Benchmark is LIBO Rate, the occurrence of:

 

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(1) a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a Term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

(2) the joint election by the Administrative Agent and the Borrower to trigger a fallback from LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Lenders.

EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

Effective Date” means the date on which the conditions set forth in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, (d) any bank and (e) any other financial institution or investment fund engaged as a primary activity in the ordinary course of its business in making or investing in commercial loans or debt securities, other than, in each case, (i) a natural person (including a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof) or (ii) except to the extent permitted under Section 9.04(e), the Borrower, any Subsidiary or any other Affiliate of the Borrower.

Environmental Laws” means all Requirements of Law relating to pollution or the protection of the environment or natural resources (or, as it relates to exposure to hazardous or toxic substances).

Environmental Liability” means any liability, obligation, loss, claim, lawsuit or order, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties and indemnities) directly or indirectly resulting or arising from (a) the violation of any Environmental Law or Environmental Permit, (b) the generation, use, handling,

 

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transportation, storage, treatment or disposal of any Hazardous Materials, (c) the Release or threatened Release of any Hazardous Materials, (d) exposure to any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Permits” means any and all permits, licenses, approvals, registrations, notifications, exemptions and any other authorization issued or required under Environmental Laws.

Equity Interests” means shares of capital stock, partnership interests, membership interests, beneficial interests in a trust or other equity ownership interests (whether voting or non-voting) in, or interests in the income or profits of, a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing (other than, prior to the date of such conversion, Indebtedness that is convertible into Equity Interests).

ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

ERISA Affiliate” means (A) any trade or business (whether or not incorporated) that, together with the Borrower or any Loan Party, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or (B) any entity, whether or not incorporated, that is under common control with the Borrower or any Loan Party within the meaning of Section 4001(a)(14) or 4001(b)(1) of ERISA.

ERISA Event” means (a) the existence, with respect to any Plan, of a non-exempt Prohibited Transaction; (b) any Reportable Event; (c) the failure of the Borrower, any Loan Party or any ERISA Affiliate to make by its due date a required installment under Section 430(j) of the Code with respect to any Plan or any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived; (d) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) a determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA); (f) the incurrence by the Borrower, any Loan Party or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (g) the receipt by the Borrower, any Loan Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan; (h) the incurrence by the Borrower, any Loan Party or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (i) the receipt by the Borrower, any Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower, any Loan Party or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, Insolvent, in “endangered” or “critical” status (within the meaning of Sections 431 or 432 of the Code or Sections 304 or 305 of ERISA), or in “critical and declining” status (within the meaning of Section 432 of the Code or Section 305 of ERISA) or terminated (within the meaning of Section 4041A of ERISA) or that the PBGC has issued a partition order under Section 4233 of ERISA with respect to the Multiemployer Plan; (j) the failure by the Borrower or any ERISA Affiliate to

 

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pay when due (after expiration of any applicable grace period) any installment payment with respect to Withdrawal Liability under Section 4201 of ERISA; (k) a Foreign Plan Event; (l) the imposition of a Lien pursuant to Section 430(k) of the Code or pursuant to Section 303(k) or 4068 of ERISA with respect to any Plan; or (m) the occurrence of an act or omission which could give rise to the imposition on any Borrower or any of its ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA.

EU Bail-in Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

Eurocurrency”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO Rate.

Event of Default” has the meaning set forth in Article VII.

Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

Excluded Assets” means (a) any fee-owned real property with a fair market value of less than $7,500,000 and all leasehold interests; (b) motor vehicles and other assets subject to certificates of title (other than to the extent a security interest in such assets can be perfected by filing a Uniform Commercial Code financing statement or similar financing statement in a non-U.S. jurisdiction); (c) commercial tort claims with a value of less than $7,500,000; (d) any lease, license or other agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money security interest or similar arrangement or create a right of termination in favor of any other party thereto (other than the Borrower or any wholly owned Subsidiary) after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code or analogous law of any non-U.S. jurisdiction, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code or analogous law of any non-U.S. jurisdiction notwithstanding such prohibition; (e) “intent-to-use” United States trademark applications, solely to the extent and for the time period that including any of them in the Collateral would invalidate them; (f) any Excluded Equity Interests; and (g) any business interruption insurance policies of the Borrower or any of its Subsidiaries (or the proceeds thereof other than to the extent such proceeds would constitute Collateral).

Excluded Equity Interests” means (a) any Equity Interests that consist of voting stock of a Subsidiary that is a CFC or a CFC Holding Company in excess of 65% of the outstanding voting stock (or 65% of the outstanding Equity Interests in the case of an entity that is not a corporation for U.S. tax purposes) of such Subsidiary, (b) any Equity Interests if, to the extent, and for so long as, the grant of a Lien thereon to secure the Obligations is effectively prohibited by any Requirements of Law; provided that such Equity Interest shall cease to be an Excluded Equity Interest at such time as such prohibition ceases to be in effect and (c) Equity Interests in any Person

 

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that is not a Subsidiary or in non-wholly owned Subsidiaries permitted under this Agreement to the extent and for so long as the granting of security interests in such Equity Interests would (i) be prohibited by the Organizational Documents or shareholder agreements or similar contracts between the owners of the Equity Interests of such non-wholly owned Subsidiaries or (ii) in the good faith judgment of the board of directors of the Borrower or such Subsidiary, require shareholder approval for such pledge; provided that such Equity Interest shall cease to be an Excluded Equity Interest at such time as such prohibition ceases to be in effect.

Excluded Subsidiary” means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a wholly-owned Significant Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia, (c) any Subsidiary that is a CFC, a CFC Holding Company or a Domestic Subsidiary of a CFC (and accordingly, in no event shall a CFC, a CFC Holding Company or a Domestic Subsidiary of a CFC be required to enter into any Security Document or pledge any assets hereunder), (d) any Subsidiary that is a Massachusetts security corporation and (e) any Subsidiary formed or acquired after the Closing Date, in each case that is prohibited or restricted by Requirements of Law from guaranteeing the Loan Document Obligations or if the guaranteeing of the Loan Document Obligations by such Subsidiary (i) would require governmental (including regulatory) consent, approval, license or authorization that has not been obtained or granted (provided that the Borrower shall take reasonable and commercially reasonable efforts to obtain such consent, approval, license or authorization) or (ii) would result in material adverse tax consequences as reasonably determined by the Borrower in consultation with the Administrative Agent and for so long as such material adverse tax consequences are applicable; provided, any Subsidiary shall cease to be an Excluded Subsidiary at such time as none of clauses (a), (b), (c), (d) or (e) above apply to such Subsidiary and provided, further, that if a Subsidiary that is party to the Guarantee Agreement ceases to be wholly-owned by the Borrower then it shall not constitute an “Excluded Subsidiary” under clause (b) to the extent it remains a Significant Subsidiary of the Borrower.

Excluded Swap Obligation” means, with respect to any Loan Party, any Hedging Obligation if, and to the extent that, and only for so long as, the Guarantee by such Loan Party of, or the grant by such Loan Party of a security interest to secure, as applicable, such Hedging Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Loan Party or the grant by any Loan Party of a security interest, as applicable, becomes effective with respect to such related Hedging Obligation. If a Hedging Obligation arises under a master agreement governing more than one Hedging Agreement, such exclusion shall apply only to the portion of such Hedging Obligation that is attributable to Hedging Agreements for which such guarantee or security interest is or becomes illegal.

Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office

 

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located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.16(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.14, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in such Loan or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.14(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

Existing Credit Agreement” means that certain Loan and Security Agreement, dated as of December 24, 2018 (as amended by that certain Loan and Security Modification Agreement, dated as of July 2, 2020), by and between Western Alliance Bank and the Borrower.

FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate, provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of calculating such rate.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

Financial Officer” means, with respect to any Person, the chief executive officer, chief financial officer, principal accounting officer or treasurer of such Person (or other persons having similar duties).

Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to LIBO Rate.

Foreign Lender” means any Lender that is not a U.S. Person.

Foreign Plan” means each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA), program or agreement that is not subject to U.S. law and is maintained or contributed to by, or entered into with, the Borrower or any ERISA Affiliate, other than any employee benefit plan, program or agreement that is sponsored or maintained exclusively by a Governmental Authority.

 

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Foreign Plan Event” means, with respect to any Foreign Plan, (a) the failure to make or, if applicable, accrue in accordance with normal accounting practices, any contributions or payments required by applicable law or by the terms of such Foreign Plan; (b) the failure to register or loss of good standing with applicable Governmental Authorities of any such Foreign Plan required to be registered with such Governmental Authorities; or (c) the failure of any Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Plan.

Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.

Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, Governmental Authorities.

Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount, as of any date of determination, of any Guarantee shall be the principal amount outstanding on such date of the Indebtedness guaranteed thereby (or, in the case of (i) any Guarantee the terms of which limit the monetary exposure of the guarantor or (ii) any Guarantee of an obligation that does not have a principal amount, the maximum monetary exposure as of such date of the guarantor under such Guarantee (as determined, in the case of clause (i), pursuant to such terms or, in the case of clause (ii), reasonably and in good faith by a Financial Officer of the Borrower)). The term “Guarantee” used as a verb has a corresponding meaning.

Guarantee Agreement” means the Guarantee Agreement among the Borrower, the other Loan Parties from time to time parties thereto and the Administrative Agent, substantially in the form of Exhibit H.

 

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Hazardous Materials” means petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, per- and polyfluorinated substances, mercury, lime solids, radon gas and all other substances, wastes or other pollutants (including explosive, radioactive, hazardous or toxic substances or wastes) that are regulated as toxic or hazardous pursuant to, or that would reasonably be expected to result in liability under, any Environmental Law.

Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction, or any option or similar agreement, involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt securities or instruments, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or any similar transaction or any combination of the foregoing transactions, in each case, not entered into for speculative purposes; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any Subsidiary shall be a Hedging Agreement.

Hedging Obligations” means, with respect to any Person, the obligations of such Person under any Hedging Agreements.

Impacted Interest Period” has the meaning set forth in the definition of LIBO Rate.

Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding trade accounts payable, deferred compensation arrangements for employees, directors and officers and other accrued obligations), (e) all Capital Lease Obligations of such Person, (f) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (g) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (h) all Disqualified Equity Interests in such Person, valued, as of the date of determination, at the greater of (i) the maximum aggregate amount that would be payable upon maturity, redemption, repayment or repurchase thereof (or of Disqualified Equity Interests or Indebtedness into which such Disqualified Equity Interests are convertible or exchangeable) and (ii) the maximum liquidation preference of such Disqualified Equity Interests, (i) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed by such Person, and (j) all Guarantees by such Person of Indebtedness of others; provided that Indebtedness shall not include any performance guarantee or other Guarantee that is not a Guarantee of other Indebtedness; and provided, further, that Indebtedness shall not include obligations under any operating lease, financing lease or property that is not required to be capitalized on the balance sheet of such Person. The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such other Person, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

 

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Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

Indemnitee” has the meaning set forth in Section 9.03(b).

Insolvent” means with respect to any Multiemployer Plan, the condition that such plan is insolvent within the meaning of Section 4245 of ERISA.

Intellectual Property” means the collective reference to all rights, priorities and privileges relating to all intellectual property rights, whether arising under United States, state, multinational or foreign laws or otherwise, including copyrights, works of authorship, patents, trademarks, service marks, trade names, Internet domain names, other source indicators, technology, inventions, trade secrets, know-how, methods and processes, in each case, together with the goodwill associated therewith along with licenses to, registrations for and applications to register any of the foregoing, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

Interest Expense” means, with respect to any person for any period, the gross interest expense of such person for such period on a consolidated basis, including without limitation (i) the amortization of debt discounts, (ii) the amortization of all fees (including fees with respect to Hedge Agreements (other than as set forth below)) payable in connection with the incurrence of Indebtedness to the extent included in interest expense, (iii) the portion of any payments or accruals with respect to Capital Lease Obligations allocable to interest expense and (iv) commissions, discounts, yield and other fees and charges incurred in connection with the asset securitization or similar transaction which are payable to any person other than the Borrower or a wholly-owned Subsidiary; provided that in any event “Interest Expense” will exclude any make whole or prepayment premiums, write offs or Hedge Agreement termination costs and similar premiums and costs related to the Transactions. For purposes of the foregoing, gross interest expense shall be determined after giving effect to any net payments made or received by the Borrower and the Subsidiaries with respect to Hedge Agreements.

Interest Election Request” means a request by the Borrower to convert or continue a Term Loan Borrowing in accordance with Section 2.05, which shall be, in the case of any such written request, substantially in the form of Exhibit E or any other form approved by the Administrative Agent.

Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, such day or days prior to the last day of such Interest Period as shall occur at intervals of three months’ duration after the first day of such Interest Period.

Interest Period” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or, to the extent made available

 

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by all Lenders, a shorter period), as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, at such time.

Investment” means, with respect to a specified Person, (a) any Equity Interests, evidences of Indebtedness (other than accounts receivables and/or accrued expenses arising in the ordinary course of business payable in accordance with customary practices and loans to employees in the ordinary course of business) or other securities (including any option, warrant or other right to acquire any of the foregoing) of, or any capital contribution or loans or advances (other than commission, travel and similar advances to officers and employees made in the ordinary course of business) to, Guarantees of any Indebtedness or other obligations of, or any other investment in, any other Person that are held or made by the specified Person and (b) the purchase or acquisition (in one transaction or a series of related transactions) of all or substantially all the property and assets or business of another Person or assets constituting a business unit, line of business, division or product line of such other Person. The amount, as of any date of determination, of (i) any Investment in the form of a loan or an advance shall be the principal amount thereof outstanding on such date (excluding any portion thereof representing paid-in-kind interest or principal accretion), without any adjustment for write-downs or write-offs (including as a result of forgiveness of any portion thereof) with respect to such loan or advance after the date thereof, (ii) any Investment in the form of a Guarantee shall be determined in accordance with the definition of the term “Guarantee”, (iii) any Investment in the form of a transfer of Equity Interests or other non-cash property by the investor to the investee, including any such transfer in the form of a capital contribution, shall be the fair value (as determined reasonably and in good faith by the Borrower in accordance with GAAP) of such Equity Interests or other property as of the time of the transfer, minus any payments actually received in cash, or other property that has been converted into cash or is readily marketable for cash, by such specified Person representing a return of capital of such Investment, but without any adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such transfer, (iv) any Investment (other than any Investment referred to in clause (i), (ii) or (iii) above) by the specified Person in the form of a purchase or other acquisition for value of any Equity Interests, evidences of Indebtedness, other securities or assets of any other Person shall be the

 

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original cost of such Investment (including any Indebtedness assumed in connection therewith), plus the cost of all additions, as of such date, thereto, and minus the amount, as of such date, of any portion of such Investment repaid to the investor in cash as a repayment of principal or a return of capital, as the case may be, but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment, and (v) any Investment (other than any Investment referred to in clause (i), (ii), (iii) or (iv) above) by the specified Person in any other Person resulting from the issuance by such other Person of its Equity Interests to the specified Person shall be the fair value (as determined reasonably and in good faith by a Financial Officer of the Borrower) of such Equity Interests at the time of the issuance thereof. For purposes of Section 6.04, if an Investment involves the acquisition of more than one Person, the amount of such Investment shall be allocated among the acquired Persons in accordance with GAAP; provided that pending the final determination of the amounts to be so allocated in accordance with GAAP, such allocation shall be as reasonably determined by a Financial Officer of the Borrower. Any basket in this Agreement used to make an Investment by any Loan Party on or after the Closing Date in any Person that is not a Loan Party on the date such Investment is made but subsequently becomes a Loan Party in accordance with the terms of this Agreement shall be refreshed by the amount of the Investment so made on the date such Person so becomes a Loan Party. For the avoidance of doubt, for purposes of covenant compliance, the amount of an Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment and, in the case of an Investment made in a currency other than U.S. Dollars, without adjustment for any changes in any applicable exchange rate.

Investment Company Act” means the U.S. Investment Company Act of 1940, as amended.

IRS” means the United States Internal Revenue Service.

ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

IT Systems” means computers, workstations, software, code, websites, applications, interfaces, platforms, networks, hardware, firmware, servers, systems, and all other information technology related equipment and assets used by or on behalf of any of the Borrower and its Subsidiaries in their business or operations.

Judgment Currency” has the meaning set forth in Section 9.18(b).

Lender-Related Person” has the meaning set forth in Section 9.03(b).

Lenders” means, initially, the Persons listed on Schedule 2.01, and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that shall have ceased to be a party hereto pursuant to an Assignment and Assumption.

 

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LIBO Rate” means, with respect to any Eurocurrency Borrowing for any applicable currency and for any Interest Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) with respect to the applicable currency then the LIBO Rate shall be the Interpolated Rate. For the avoidance of doubt, if the LIBO Rate as so determined would be less than 1.00%, such rate shall be deemed to be 1.00% for the purposes of this Agreement.

LIBO Screen Rate” means, for any day and time, with respect to any Eurocurrency Borrowing for any applicable currency and for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for the relevant currency for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion); provided that if the LIBO Screen Rate as so determined would be less than 1.00%, such rate shall be deemed to be 1.00% for the purposes of this Agreement.

Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, charge, security interest or other encumbrance on, in or of such asset, including any agreement to provide any of the foregoing, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

Loan Document Obligations” means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Borrower under this Agreement and each of the other Loan Documents, including subject to the terms of the Loan Documents, obligations to pay fees, expense reimbursement obligations (including with respect to outside counsel attorneys’ fees) and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to this Agreement and each of the other Loan Documents and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to each of the Loan Documents (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding).

 

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Loan Documents” means this Agreement, the Guarantee Agreement, the Collateral Agreement, the other Security Documents and, except for purposes of Section 9.02, any promissory notes delivered pursuant to Section 2.07(c) (and, in each case, any amendment, restatement, waiver, supplement or other modification to any of the foregoing).

Loan Parties” means the Borrower and each Designated Subsidiary that is a party to the Guarantee Agreement.

Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

Local Time” means New York City time.

Material Adverse Effect” means an event or condition (other than one relating to the Target Group) that has resulted, or could reasonably be expected to result, in a material adverse effect on (a) the business, assets, operations, or financial condition of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents or (c) the legality, validity or enforceability of the Loan Documents.

Material Indebtedness” means Indebtedness (other than the Loans and Guarantees under the Loan Documents) or Hedging Obligations of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount of $7,500,000 or more. For purposes of determining Material Indebtedness, the “principal amount” of any Hedging Obligation at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if the applicable Hedging Agreement were terminated at such time.

Maturity Date” means June 9, 2021.

Maximum Rate” has the meaning set forth in Section 9.13.

MNPI” means material information concerning the Borrower, any Subsidiary or any Affiliate of any of the foregoing or their securities that has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD under the Securities Act and the Exchange Act. For purposes of this definition, “material information” means information concerning the Borrower, the Subsidiaries or any Affiliate of any of the foregoing, or any of their securities, that could reasonably be expected to be material for purposes of the United States Federal and State securities laws.

Moody’s” means Moody’s Investors Service, Inc., and any successor to its rating agency business.

Mortgage” means a mortgage, deed of trust or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

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Mortgaged Property” means each parcel of real property owned in fee by a Loan Party, and the improvements thereto, that (together with such improvements) has a fair market value of $7,500,000 or more, subject to the limitations in the definition of the term “Collateral and Guarantee Requirement”.

Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

Net Cash Proceeds” means, (a) in connection with any Asset Sale or any Recovery Event or other Disposition, the proceeds thereof in the form of cash and cash equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale, Recovery Event or other Disposition (other than any Lien pursuant to a Security Document), other customary fees and expenses actually incurred in connection therewith and net of any transfer or similar taxes and other Taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements, in each case, to the extent the credit or deduction or payment under such an arrangement, as applicable, is reasonably expected to reduce such tax amounts as determined by treating the income from such Asset Sale, Recovery Event or other Disposition as if it were the last item of income available to offset such credit or deduction or payment) and amounts provided as a reserve, in accordance with GAAP against any liabilities under any indemnification obligations and any purchase price adjustments associated with any Asset Sale, (b) in connection with any incurrence of Indebtedness, the cash proceeds received from such incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith and (c) in connection with any issuance of Equity Interests, the cash proceeds received from such issuance, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

Non-Cash Charges” means any non-cash charges, including (a) any write-off for impairment of long lived assets (including goodwill, intangible assets and fixed assets such as property, plant and equipment), or of deferred financing fees or investments in debt and equity securities, in each case, pursuant to GAAP, (b) non-cash expenses resulting from the grant of stock options, restricted stock awards or other equity-based incentives to any director, officer or employee of the Borrower or any Subsidiary (excluding, for the avoidance of doubt, any cash payments of income taxes made for the benefit of any such Person in consideration of the surrender of any portion of such options, stock or other incentives upon the exercise or vesting thereof), (c) any non-cash charges resulting from (i) the application of purchase accounting or (ii) investments in minority interests in a Person, to the extent that such investments are subject to the equity method of accounting; provided that Non-Cash Charges shall not include additions to bad debt reserves or bad debt expense and any noncash charge that results from the write-down or write-off of accounts receivable, (d) the non-cash impact of accounting changes or restatements and (e) non-cash charges and expenses resulting from pension adjustments.

 

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Non-Consenting Lender has the meaning set forth in Section 9.02(c).

Notes” means unsecured convertible notes issued in one or more public or private offerings.

NYFRB” means the Federal Reserve Bank of New York.

NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for the purposes of calculating such rate.

Obligations” means the Loan Document Obligations.

OFAC” means the United States Treasury Department Office of Foreign Assets Control.

Organizational Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan Document).

Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are

 

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Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.16).

Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

Participant” has the meaning set forth in Section 9.04(c).

Participant Register” has the meaning set forth in Section 9.04(c).

PBGC” means the Pension Benefit Guaranty Corporation established under Section 4002 of ERISA or any successor entity performing similar functions.

Perfection Certificate” means a Perfection Certificate substantially in the form of Exhibit I or any other form approved by the Administrative Agent.

Permitted Acquisition” means the purchase or other acquisition, by merger or otherwise, by the Borrower or any Subsidiary of substantially all the Equity Interests in, or all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of), any Person if (a) in the case of any purchase or other acquisition of Equity Interests in a Person, such Person and each subsidiary of such Person upon the consummation of such acquisition, will be a wholly-owned Subsidiary (or, in the case of any such purchase or other acquisition structured as a two-step tender offer, such Person (including each subsidiary of such Person) will become a wholly-owned Subsidiary upon the consummation of the second step of such transaction), in each case including as a result of a merger or consolidation between any Subsidiary and such Person and, to the extent required under this Agreement, will be or become a Loan Party as required under the Collateral and Guarantee Requirement or otherwise become a Loan Party, or (b) in the case of any purchase or other acquisition of assets other than Equity Interests, such assets will be owned by a Loan Party or a Subsidiary thereof; provided that, in each case, (i) the business of such Person, or such assets, as the case may be, constitute a business permitted under Section 6.03(b), (ii) with respect to each such purchase or other acquisition, all actions required to be taken with respect to each newly created or acquired Subsidiary or assets in order to satisfy the requirements set forth in the definition of the term “Collateral and Guarantee Requirement” shall be taken within the required time periods for satisfaction of such requirements set forth therein and (iii) the aggregate principal amount of Permitted Acquisitions during the term of this Agreement shall not exceed $25,000,000.

Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes, assessments and other governmental charges that are not overdue by more than 30 days or are being contested;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’ and other like Liens imposed by law (other than any Lien imposed pursuant to Section 430(k) of the Code or Section 303(k) or 4068 of ERISA or a violation of Section 436 of the Code), arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or are being contested;

 

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(c) (i) Liens (including pledges and deposits) arising in the ordinary course of business in connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits and similar statutory obligations and (ii) pledges and deposits in respect of letters of credit, bank guarantees or similar instruments issued for the account of the Borrower or any Subsidiary in the ordinary course of business supporting obligations of the type set forth in clause (c)(i) above;

(d) pledges and deposits made (i) to secure the performance of bids, trade and commercial contracts (other than for payment of Indebtedness), leases (other than Capital Lease Obligations), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business and (ii) in respect of letters of credit, bank guarantees or similar instruments issued for the account of the Borrower or any Subsidiary in the ordinary course of business supporting obligations of the type set forth in clause (d)(i) above;

(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f) survey exceptions, easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business, and other minor title imperfections with respect to real property, that in any case do not secure any monetary obligations, are minor in nature and do not interfere with the ordinary conduct of business of the Borrower or any Loan Party;

(g) Liens arising from Permitted Investments described in clause (d) of the definition of the term Permitted Investments;

(h) banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with depository institutions and securities accounts and other financial assets maintained with a securities intermediary; provided that such deposit accounts or funds and securities accounts or other financial assets are not established or deposited for the purpose of providing collateral for any Indebtedness and are not subject to restrictions on access by the Borrower or any Subsidiary in excess of those required by applicable banking regulations;

(i) Liens arising by virtue of Uniform Commercial Code financing statement filings (or similar filings under applicable law) regarding operating leases entered into by the Borrower and the Subsidiaries in the ordinary course of business;

(j) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 (or the applicable corresponding section) of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon (or similar provisions under applicable law);

 

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(k) Liens representing any interest or title of a licensor, lessor or sublicensor or sublessor, or a licensee, lessee or sublicensee or sublessee, in the property subject to any lease, license or sublicense or concession agreement entered into in the ordinary course of business;

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business so long as such Liens only cover the related goods;

(m) Liens that are contractual rights of set-off;

(n) Leases, subleases, licenses and sublicenses granted to others in the ordinary course of business which do not materially interfere with the ordinary course of business of the Borrower and its Subsidiaries and do not secure Indebtedness;

(o) Deposits in the ordinary course of business to secure liability to insurance carriers; and

(p) Precautionary financing statement filings.

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, other than Liens referred to clauses (c) and (d) above securing obligations under letters of credit, bank guarantees or similar instruments.

Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, (i) a short term credit rating of “P-1” or higher from Moody’s or “A-1” or higher from S&P or (ii) a long term rating of “A2” or higher from Moody’s or “A” or higher from S&P;

(c) investments (i) in cash and (ii) in certificates of deposit, banker’s acceptances and demand or time deposits, in each case maturing within 365 days from the date of acquisition thereof, issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

 

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(e) “money market funds” that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act, (ii) with (A) a short term credit rating of “P-1” or higher from Moody’s or “A-1” or higher from S&P or (B) a long term rating of “A2” or higher from Moody’s or “A” or higher from S&P and (iii) have portfolio assets of at least $5,000,000,000;

(f) investments in Indebtedness that is (x) issued by Persons with (i) a short term credit rating of “P-1” or higher from Moody’s or “A-1” or higher from S&P or (ii) a long term rating of “A2” or higher from Moody’s or “A” or higher from S&P, in each case for clauses (i) and (ii) with maturities not more than 12 months after the date of acquisition and (y) of a type customarily used by companies for cash management purposes;

(g) investments in assets set forth on the Borrower’s cash management and investment policy as provided to the Administrative Agent and as in effect on the Effective Date (as may be modified by the Borrower after the Effective Date in a manner reasonably satisfactory to the Administrative Agent); and

(h) in the case of any Foreign Subsidiary, other short-term investments that are analogous to the foregoing, are of comparable credit quality and are customarily used by companies in the jurisdiction of such Foreign Subsidiary for cash management purposes.

Person” means any natural person, corporation, company, limited liability company, trust, joint venture, association, partnership, Governmental Authority or other entity.

Plan” means any “employee pension benefit plan”, as defined in Section 3(2) of ERISA (other than a Multiemployer Plan), that is subject to the provisions of Title IV of ERISA or Sections 412 or 430 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4062 or 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

Prepayment Event” means:

(a) any Asset Sale, Recovery Event or other Disposition (including pursuant to a sale and leaseback transaction and by way of merger or consolidation) (for purposes of this defined term, collectively, “dispositions”) by the Borrower or any Subsidiary, other than (i) dispositions described in clauses (a) through (f), (h), (i), (j), (l), (m) and (o) of Section 6.05 and (ii) other dispositions resulting in aggregate Net Cash Proceeds not exceeding $5,000,000 for all such dispositions during the term of this Agreement;

(b) the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than any Indebtedness permitted to be incurred under clauses (a), (b) and (d) through (o) of Section 6.01; or

(c) the receipt by the Borrower or any Subsidiary of Net Cash Proceeds from the issuance of any Equity Interests (including hybrid or convertible equity interests) other than (i) issuances pursuant to stock plans or other benefit or incentive plans and (ii) issuances to the Borrower or any Subsidiary.

 

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Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

Pro Forma Basis” means, with respect to compliance with any test or covenant hereunder required by the terms of this Agreement to be made on a Pro Forma Basis, that all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of (or commencing with) the first day of the applicable period of measurement in such test or covenant: (i) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction (A) in the case of a Disposition of all or substantially all Equity Interests in any Subsidiary or any division, product line, or facility used for operations of the Borrower or any of the Subsidiaries or a designation of a Subsidiary as an Unrestricted Subsidiary, shall be excluded and (B) in the case of an acquisition or Investment described in the definition of “Specified Transaction” or designation on an Unrestricted Subsidiary as a Subsidiary, shall be included, (ii) any prepayment, repayment, retirement, redemption or satisfaction of Indebtedness, and (iii) any Indebtedness incurred or assumed by the Borrower or any of the Subsidiaries in connection therewith.

Prohibited Transaction” has the meaning assigned to such term in Section 406 of ERISA or Section 4975 of the Code.

Proposed Change” has the meaning set forth in Section 9.02(c).

PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

Public Side Lender Representatives” means, with respect to any Lender, representatives of such Lender that do not wish to receive MNPI.

QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

QFC Credit Support” has the meaning assigned to it in Section 9.20.

Qualified Equity Interests” means Equity Interests of the Borrower other than Disqualified Equity Interests.

Recipient” means the Administrative Agent and any Lender, or any combination thereof (as the context requires).

Recovery Event” means any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the Borrower or any Subsidiary.

 

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Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is LIBO Rate, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not LIBO Rate, the time determined by the Administrative Agent in its reasonable discretion.

Refinancing Indebtedness” means, in respect of any Indebtedness (the “Original Indebtedness”), any Indebtedness that extends, renews, replaces or refinances such Original Indebtedness (or any prior Refinancing Indebtedness in respect thereof); provided that (a) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness shall not exceed the principal amount (or accreted value, if applicable) of such Original Indebtedness except by an amount no greater than accrued and unpaid interest with respect to such Original Indebtedness and any premiums (including tender premiums) thereon plus underwriting discounts and any other fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant extension, renewal, replacement or refinancing; (b) either (i) the stated final maturity of such Refinancing Indebtedness shall not be earlier than that of such Original Indebtedness or (ii) such Refinancing Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, upon the occurrence of an event of default, an asset sale or a change in control, fundamental change, or upon conversion or exchange in the case of convertible or exchangeable Indebtedness or as and to the extent such repayment, prepayment, redemption, repurchase or defeasance would have been required pursuant to the terms of such Original Indebtedness) prior to the date that is 91 days after the latest Maturity Date in effect on the date of such extension, renewal or refinancing; provided that, notwithstanding the foregoing, scheduled amortization payments (however denominated) of such Refinancing Indebtedness shall be permitted so long as the weighted average life to maturity of such Refinancing Indebtedness shall be longer than the shorter of (x) the weighted average life to maturity of such Original Indebtedness remaining as of the date of such extension, renewal, replacement or refinancing and (y) the weighted average life to maturity of Term Loans remaining as of the date of such extension, renewal, replacement or refinancing with the latest Maturity Date; (c) such Refinancing Indebtedness shall not constitute an obligation (including pursuant to a Guarantee) of any Subsidiary, in each case that shall not have been (or, in the case of after-acquired Subsidiaries, shall not have been required to become pursuant to the terms of the Original Indebtedness) an obligor in respect of such Original Indebtedness, and shall not constitute an obligation of the Borrower if the Borrower shall not have been an obligor in respect of such Original Indebtedness, in each case except to the extent such obligor or obligors would be permitted to otherwise incur such Indebtedness pursuant to Section 6.01 (it being understood that any Person that was a guarantor in respect of such Original Indebtedness may be the primary obligor in respect of such Refinancing Indebtedness, and any Person that was the primary obligor in respect of such Original Indebtedness may be a guarantor in respect of such Refinancing Indebtedness); (d) if such Original Indebtedness shall have been subordinated to the Loan Document Obligations, such Refinancing Indebtedness shall also be subordinated to the Loan Document Obligations on terms not less favorable in any material respect to the Lenders (as determined in good faith by the Borrower); and (e) such Refinancing Indebtedness shall not be secured by any Lien on any asset other than the assets that secured such Original Indebtedness (or would have been required to secure such Original Indebtedness pursuant to the terms thereof) or, in the event Liens securing such Original Indebtedness shall have been contractually subordinated to any Lien securing the Loan Document Obligations, by any Lien that shall not have been contractually subordinated to at least the same extent, in each case, except as otherwise permitted by Section 6.02.

 

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Register” has the meaning set forth in Section 9.04(b)(iv).

Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the directors, officers, partners, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and of such Person’s Affiliates.

Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the indoor or outdoor environment.

Relevant Governmental Body” means the Federal Reserve Board or the NYFRB, or a committee officially endorsed or convened by the Federal Reserve Board or the NYFRB, or any successor thereto.

Reportable Event” means any “reportable event,” as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Plan, other than those events as to which notice is waived pursuant to DOL Reg. § 4043.

Required Lenders” means (a) from the Effective Date until the Closing Date, Lenders having unused Commitments representing more than 50% of the sum of the aggregate unused Commitments at such time (excluding for purposes of any such calculation Defaulting Lenders) and (b) from the Closing Date and thereafter, Lenders having Term Loans representing more than 50% of the sum of the aggregate outstanding Term Loans at such time (excluding for purposes of any such calculation Defaulting Lenders).

Requirements of Law” means, with respect to any Person, any law (including common law), statute, ordinance, treaty, rule, regulation, code, judgment, order, decree, writ, injunction, settlement agreement or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject.

Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Responsible Officer” means the president, any Financial Officer, or other executive officer of the Borrower or any Subsidiary.

Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment or distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, exchange, conversion, cancellation or termination of, or any other return of capital with respect to, any Equity Interests in the Borrower or any Subsidiary.

 

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Reuters” means, as applicable, Thomson Reuters Corp., Refinitiv, or any successor thereto.

S&P” means S&P Global Ratings, a division of S&P Global Inc., and any successor thereto.

Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, Lebanon, North Korea and Syria).

Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority having jurisdiction over the Borrower or any of its Subsidiaries, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any other Person that is otherwise the subject or target of Sanctions.

Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union or any EU member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority having jurisdiction over the Borrower or any of its Subsidiaries.

Sale/Leaseback Transaction” means an arrangement relating to property owned by the Borrower or any Subsidiary whereby the Borrower or such Subsidiary sells or transfers such property to any Person and the Borrower or any Subsidiary leases such property, or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, from such Person or its Affiliates.

SEC” means the United States Securities and Exchange Commission.

Secured Indebtedness” means, on any date, the aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but without giving effect to any election to value any Indebtedness at “fair value”, as described in Section 1.04(a), or any other accounting principle that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on such balance sheet to be below the stated principal amount of such Indebtedness), that is secured by a Lien.

Secured Parties” means, collectively, (a) the Lenders, (b) the Administrative Agent, (c) the beneficiaries of each indemnification obligation undertaken by any Loan Party under this Agreement or any other Loan Document and (d) the permitted successors and assigns of each of the foregoing.

 

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Securities Act” means the United States Securities Act of 1933.

Security Documents” means the Collateral Agreement, the Mortgages (if any) and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.03 or 5.10 or the requirements of the Collateral and Guarantee Requirement to secure the Obligations.

Significant Subsidiary” means (a) each Subsidiary (i) with Total Assets (including the value of Equity Interests of its subsidiaries), on any date of determination, equal to or greater than 5% of the Total Assets of the Borrower and its Subsidiaries and/or (ii) the gross revenues of which, for the Test Period most recently ended, are equal to or greater than 5% of the gross revenues of the Borrower and its Subsidiaries, in each case calculated in accordance with GAAP and (b) each Subsidiary that owns any Equity Interests of any Subsidiary that would be deemed a Significant Subsidiary under clause (a)(i) or (a)(ii) above; provided that if at the end of or for any Test Period during the term of this Agreement, the combined aggregate amount of Total Assets as of the last day of any fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b) or combined aggregate amount of gross revenues for the Test Period most recently ended of all Subsidiaries that are not Significant Subsidiaries shall have exceeded 10% of the consolidated Total Assets of the Borrower and its Subsidiaries or 10% of the consolidated gross revenues of the Borrower and its Subsidiaries for the Test Period most recently ended, then one or more of the Subsidiaries that are not Significant Subsidiaries shall be designated by the Borrower in writing to the Administrative Agent as a Significant Subsidiary until such excess has been eliminated.

SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately 8:00 a.m. (New York City time) on the immediately succeeding Business Day.

SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).

SOFR Administrator’s Website” means the NYFRB’s Website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

Software” has the meaning set forth in the Collateral Agreement.

Solvent” means, as to any Person as of any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts, including contingent debts, as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities, including contingent debts and liabilities, beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

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Specified Purchase Agreement Representations” means such of the representations made by or with respect to the Target and its subsidiaries in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the Borrower (or an Affiliate thereof) has the right to terminate its obligations under the Acquisition Agreement or to decline to consummate the Acquisition in accordance with the terms of the Acquisition Agreement as a result of a breach of such representations in the Acquisition Agreement.

Specified Representations” means each of the representations set out in Sections 3.01(a) (in the case of the Loan Parties), 3.01(b)(ii) (in the case of the Loan Parties), 3.02, 3.03(b), 3.06(a), 3.08, 3.12, 3.14 (subject in all respects to the definition of “Collateral and Guarantee Requirement”), 3.15, 3.16, 3.17, 3.18 and 3.19 (but excluding the first sentence thereof).

Specified Transaction” means, with respect to any period, any Investment, acquisition (including the Target Acquisition), Disposition, incurrence, assumption or repayment of Indebtedness, Restricted Payment or designation of a Subsidiary as an Unrestricted Subsidiary or of an Unrestricted Subsidiary as a Subsidiary, that by the terms of this Agreement requires such test or covenant to be calculated on a Pro Forma Basis.

Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, established by the Federal Reserve Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

Subordinated Indebtedness” of any Person means any Indebtedness of such Person that is contractually subordinated in right of payment to any other Indebtedness of such Person.

subsidiary” means, with respect to any Person (the “parent”) at any date, (a) any Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP and (b) any other Person (i) of which Equity Interests representing more than 50% of the equity value or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

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Subsidiary” means any subsidiary of the Borrower. Unless otherwise set forth herein, Unrestricted Subsidiaries shall be deemed not to be “Subsidiaries” for any and all purposes of this Agreement and the other Loan Documents.

Supported QFC” has the meaning assigned to it in Section 9.20.

Target” means BrightTalk Limited, a private company limited by shares incorporated in England.

Target Acquisition” means the acquisition by the Borrower (directly or indirectly) of all the outstanding Equity Interests in Target.

Target Financials” means (a) the audited consolidated balance sheets of the Target and its subsidiaries at December 31, 2019, and the related consolidated statements of operations, changes in stockholder’s equity and cash flows of the Target and its subsidiaries as of the end of the fiscal year ended December 31, 2019, (b) the audited consolidated balance sheets of the Target and its subsidiaries at December 31, 2018 and 2017 and the related consolidated statements of operations, changes in stockholder’s equity and cash flows of the Target and its subsidiaries as of the end of and for each of the fiscal years ended December 31, 2018 and 2017, (c) a quality of earnings report with respect to the Target and (d) the unaudited consolidated balance sheets and related consolidated statements of operations, changes in stockholders’ equity and cash flows of the Target and its subsidiaries, in each case for each subsequent fiscal quarter (other than the fourth fiscal quarter of each fiscal year) ended at least 45 days before the Closing Date.

Target Group” means the Target and its subsidiaries.

Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Term Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Term Loans during the Availability Period, expressed as an amount representing the maximum aggregate principal amount of the Term Loans to be made by such Lender, as such commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Term Loan Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable. The initial aggregate amount of the Lenders’ Term Loan Commitments is $145,000,000.

Term Lender” means a Lender with a Term Commitment or an outstanding Term Loan.

Term Loan” means a Loan made pursuant to clause (a) of Section 2.01.

Test Period” means each period of four consecutive fiscal quarters of the Borrower.

 

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Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of a Term SOFR Transition Event.

Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 2.11 that is not Term SOFR.

Total Assets” means, as of any date, the total assets of the Borrower and its Subsidiaries on a consolidated basis, as shown on the most recent consolidated balance sheet of the Borrower and its Subsidiaries, determined on a Pro Forma Basis.

Total Indebtedness” means, on any date, the aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition and without giving effect to any election to value any Indebtedness at “fair value”, as described in Section 1.04(a), or any other accounting principle that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on such balance sheet to be below the stated principal amount of such Indebtedness).

Total Leverage Ratio” means, on any date of determination, the ratio of (a) an amount equal to Total Indebtedness minus an amount, not to exceed $10,000,000 in the aggregate, equal to the aggregate amount of unrestricted and unencumbered cash and Permitted Investments not subject to any Liens (other than Liens arising pursuant to the Loan Documents) and in each case maintained at such time in any account that is (x) owned by a Loan Party and (y) located in the United States of America as of such date to (b) Consolidated EBITDA for the Test Period recently ended on or prior to such date.

Transaction Costs” means all fees, costs and expenses incurred or payable by the Borrower or any Subsidiary in connection with the Transactions to be consummated on the Effective Date and Closing Date, as applicable.

Transactions” means, collectively, (a) the execution, delivery and performance by each Loan Party of the Loan Documents (including this Agreement) to which it is to be a party, (b) the creation, continuation (as applicable) and perfection of the security interests provided for in the Security Documents, (c) the consummation of the Target Acquisition, (d) the repayment of the Existing Credit Agreement and (e) the payment of the Transaction Costs.

 

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Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

Unrestricted Subsidiary”: means (a) any subsidiary of the Borrower that is designated as an Unrestricted Subsidiary by the Borrower on the Closing Date or pursuant to Section 5.14 subsequent to the Closing Date and (b) any subsidiary of an Unrestricted Subsidiary.

U.S. Dollars” or “$” refers to lawful money of the United States of America.

U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

U.S. Special Resolution Regime” has the meaning assigned to it in Section 9.20.

U.S. Tax Compliance Certificate” has the meaning set forth in Section 2.14(f)(ii)(B)(3).

USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

wholly-owned”, when used in reference to a subsidiary of any Person, means that all the Equity Interests in such subsidiary (other than directors’ qualifying shares and other nominal amounts of Equity Interests that are required to be held by other Persons under applicable law) are owned, beneficially and of record, by such Person, another wholly-owned subsidiary of such Person or any combination thereof.

Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

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Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a “Eurocurrency Loan” or “Eurocurrency Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal, tangible and intangible assets and properties, including cash, securities, accounts and contract rights. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders, writs and decrees, of all Governmental Authorities. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document (including this Agreement and the other Loan Documents) shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, extended, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, amendment and restatements, extensions, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, consolidated, replaced, interpreted, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

SECTION 1.04. Accounting Terms; GAAP; Pro Forma Calculations. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature used herein shall be construed in accordance with GAAP as in effect from time to time; provided that (i) if the Borrower, by notice to the Administrative Agent, shall request an amendment to any provision hereof to eliminate the effect of (A) any change occurring after the Effective Date in GAAP or in the application thereof or (B) the issuance of any new accounting rule or guidance (including, without limitation, any accounting rule or guidance relating to or issued in connection with Topic 606) or in the application thereof on the operation of such provision after the Effective

 

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Date (or if the Administrative Agent or the Required Lenders, in each case, by notice to the Borrower, shall request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof or the issuance of such rule or guidance or the application thereof, then such provision shall be interpreted on the basis of GAAP and such rule or guidance as in effect and applied immediately prior thereto shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith provided, further, that the Borrower shall provide reconciliation information in form and substance reasonably satisfactory to the Administrative Agent in the applicable Compliance Certificate to the extent required to reconcile such calculations with the information in the financial statements delivered pursuant to Section 5.01, and (ii) notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (A) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities), or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value”, as defined therein and (B) any treatment of Indebtedness relating to convertible or equity-linked securities under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) requiring the valuation of any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof. For purposes of the foregoing, any change by the Borrower in its accounting principles and standards to adopt International Financial Reporting Standards, regardless of whether required by applicable laws and regulations, will be deemed a change in GAAP.

(b) For purposes of determining compliance with any test or covenant contained in this Agreement with respect to any period during which any Specified Transaction occurs, or for purposes of determining whether any Specified Transaction, Consolidated EBITDA and the Total Leverage Ratio shall be calculated with respect to such period on a Pro Forma Basis, giving effect to such Specified Transaction. For the avoidance of doubt, any calculations on a Pro Forma Basis (i) shall exclude purchase acquisition accounting impact for any Permitted Acquisition or Specified Transaction, as applicable, and (ii) for periods prior to the applicable Permitted Acquisition or Specified Transaction, shall be made based on the financial information for the target of such Permitted Acquisition or Specified Transaction, as applicable, that is publicly or privately available and regardless of the accounting standard applied to such target prior to the date of such Permitted Acquisition or Specified Transaction (and, for the avoidance of doubt, no breach of this Agreement shall result therefrom).

(c) All leases of a Person that would have been treated as operating leases or financing leases and not as Capital Lease Obligations, as applicable, for purposes of GAAP but for the adoption of accounting rules or guidance with respect to Accounting Standards Codification Topic 842 (“ACS 842”), shall continue to be accounted for as operating leases and financing leases, respectively (and not Capital Lease Obligations), hereunder notwithstanding the fact that such leases are required in accordance with ACS 842 to be treated as Capital Lease Obligations.

 

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SECTION 1.05. Excluded Swap Obligations. Notwithstanding any provision of this Agreement or any other Loan Document, no Guarantee by any Loan Party under any Loan Document shall include a Guarantee of any Obligation that, as to such Loan Party, is an Excluded Swap Obligation and no Collateral provided by any Loan Party shall secure any Obligation that, as to such Loan Party, is an Excluded Swap Obligation. In the event that any payment is made by, or any collection is realized from, any Loan Party as to which any Obligations are Excluded Swap Obligations, or from any Collateral provided by such Loan Party, the proceeds thereof shall be applied to pay the Obligations of such Loan Party as otherwise provided herein without giving effect to such Excluded Swap Obligations and each reference in this Agreement or any other Loan Document to the ratable application of such amounts as among the Obligations or any specified portion of the Obligations that would otherwise include such Excluded Swap Obligations shall be deemed so to provide.

SECTION 1.06. Interest Rate; LIBOR Notification. The interest rate on Eurocurrency Loans is determined by reference to the LIBO Rate, which is derived from the London interbank offered rate. The London interbank offered rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA setting the London interbank offered rate. As a result, it is possible that commencing in 2022, the London interbank offered rate may no longer be available or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on Eurocurrency Loans. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of the London interbank offered rate. Upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, Section 2.11(b) and (c) provide the mechanism for determining an alternative rate of interest. The Administrative Agent will promptly notify the Borrower, pursuant to Section 2.11(e), of any change to the reference rate upon which the interest rate on Eurocurrency Loans is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of “LIBO Rate” or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section 2.11(b) or (c), whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 2.11(d)), including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the LIBO Rate or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.

SECTION 1.07. Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.

 

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ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Term Loans in U.S. Dollars to the Borrower in a single draw on the Closing Date, in an aggregate principal amount not exceeding its Term Loan Commitment. Amounts repaid or prepaid in respect of Term Loans may not be reborrowed.

SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b) Subject to Section 2.11, each Term Loan Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement and in exercising such option, such Lender shall use its reasonable efforts to minimize any increased costs to the Borrower resulting therefrom.

(c) At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum; provided that a Eurocurrency Borrowing that results from a continuation of an outstanding Eurocurrency Borrowing may be in an aggregate amount that is equal to such outstanding Borrowing. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $100,000. Borrowings of more than one Type may be outstanding at the same time.

(d) Notwithstanding any other provision of this Agreement, no Borrower shall be entitled to request, or to elect to convert to or continue, any Eurocurrency Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable thereto.

SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by submitting an executed written Borrowing Request (a) in the case of a Eurocurrency Borrowing, not later than 11:00 a.m., Local Time, three Business Days before the date of the proposed Borrowing (or such shorter period of time as may be agreed to by the Administrative Agent and the Lenders) or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., Local Time, on the day of the proposed Borrowing.

 

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Each such Borrowing Request shall be irrevocable. Each such written Borrowing Request for a Term Loan Borrowing shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of such Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day within the Availability Period;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

(iv) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v) the Applicable Funding Account.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds in U.S. Dollars by 2:00 p.m., Local Time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly remitting the amounts so received, in like funds, to the Applicable Funding Account.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.04 and may, in reliance on such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on written demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to ABR Term Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

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SECTION 2.05. Interest Elections. (a) Each Borrowing initially shall be of the Type and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in the applicable Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.05. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section 2.05, the Borrower shall notify the Administrative Agent of such election in writing by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Term Loan Borrowing of the Type resulting from such election to be made on the effective date of such election (it being understood and agreed that such an election may be made prior to the Closing Date). Each Interest Election Request shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv) if the resulting Borrowing is to be a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(c) Promptly following receipt of an Interest Election Request in accordance with this Section 2.05, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

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(d) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be continued as a Eurocurrency Borrowing for an additional Interest Period of one month. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing with respect to the Borrower, then, so long as such Event of Default is continuing, (i) no outstanding Borrowing may be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.06. Termination and Reduction of Commitments. (a) Unless previously terminated, the Term Loan Commitments shall automatically terminate at 5:00 p.m., New York City time on the earliest of (x) the Maturity Date, (y) the date on which the Target Acquisition has been achieved without the making of any Term Loans and (z) the date of the termination of the Acquisition Agreement prior to the Target Acquisition having been achieved. In the event and on each occasion that any Net Cash Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower or any such Subsidiary shall deposit such Net Cash Proceeds in an escrow account within one Business Day after the receipt of such Net Cash Proceeds, and upon such deposit, the Commitments shall be reduced in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds.

(b) The Borrower may at any time terminate, or from time to time permanently reduce, the Commitments; provided that each partial reduction of the Commitments shall be in an amount that is an integral multiple of $100,000 and not less than $500,000.

(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section 2.06 at least three Business Days (or such shorter period as the Administrative Agent may agree) prior to the effective date of such termination or reduction, specifying the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section 2.06 shall be irrevocable. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.07. Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender on the Maturity Date.

(b) The records maintained by the Administrative Agent and the Lenders shall be prima facie evidence (absent manifest error) of the existence and amounts of the obligations of the Borrower in respect of Loans, interest and fees due or accrued hereunder; provided that the failure of the Administrative Agent or any Lender to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to pay any amounts due hereunder in accordance with the terms of this Agreement.

 

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(c) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent (for which such form approval shall not be unreasonably withheld). Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the payee named therein (or to such payee and its registered assigns) to the extent requested and required by such Lender.

SECTION 2.08. Prepayment of Loans; Mandatory Prepayment of Term Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, but subject to the requirements of this Section 2.08 and the payment of accrued interest to the extent required by Section 2.10 and, if applicable, amounts owed pursuant to Section 2.13.

(b) [Reserved].

(c) If on any date the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds in respect of any Prepayment Event, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied within five (5) Business Days after the date of such Prepayment Event toward the prepayment of the Term Loans as set forth in Section 2.08(g).

(d) [Reserved].

(e) Prior to any optional or mandatory prepayment of Borrowings under this Section 2.08, the Borrower shall, subject to the next sentence, specify the Borrowing or Borrowings to be prepaid in the notice of such prepayment delivered pursuant to paragraph (f) of this Section 2.08.

(f) The Borrower shall notify the Administrative Agent in writing of any optional prepayment and, to the extent practicable, any mandatory prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later than 1:00 p.m., Local Time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later than 1:00 p.m., Local Time, one Business Day (or two Business Days, in the case of a mandatory prepayment) before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that a notice of prepayment of Term Loans pursuant to paragraph (a) of this Section 2.08 may state that such notice is conditioned upon the occurrence of one or more events specified therein in which case such notice of prepayment may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified date of prepayment) if such condition is not satisfied. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing as set forth in Section 2.08(g). Prepayments shall be accompanied by accrued interest to the extent required by Section 2.10 and, if applicable, amounts owed pursuant to Section 2.13, if any.

 

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(g) Amounts to be applied in connection with prepayments made pursuant to Section 2.08(c) shall be applied to reduce the then remaining installments of the Term Loans pro rata based upon the then remaining principal amounts thereof. The application of any prepayment pursuant to Section 2.08(c) shall be made, first, to ABR Loans and, second, to Eurocurrency Loans. Each prepayment of the Loans under Section 2.08(c) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

SECTION 2.09. Fees.

(a) The Borrower agrees to pay to the Administrative Agent and the Arranger, each for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent and the Arranger, as applicable.

(b) All fees payable hereunder shall be paid in U.S. Dollars on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

SECTION 2.10. Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.10 or (ii) in the case of any other overdue amount, 2.00% per annum plus the rate applicable to ABR Term Loans as provided in paragraph (a) of this Section 2.10.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (c) of this Section 2.10 shall be payable on written demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of a Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. All interest shall be payable in the currency in which the applicable Loan is denominated.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, the Adjusted LIBO Rate and the LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

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SECTION 2.11. Alternate Rate of Interest. (a) Subject to clauses (b), (c), (d), (e), (f) and (g) of this Section 2.11, if prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

(i) the Administrative Agent determines in good faith (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including by means of an Interpolated Rate) do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including because the LIBO Screen Rate is not available or published on a current basis), for such Interest Period; provided that no Benchmark Transition Event shall have occurred at such time; or

(ii) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Eurocurrency Borrowing for such Interest Period;

then the Administrative Agent shall give notice (which may be by telephone, telecopy or electronic mail) thereof to the Borrower and the Lenders as promptly as practicable and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, and such Borrowing shall be continued as an ABR Borrowing, and (ii) any Borrowing Request for a Eurocurrency Borrowing shall be treated as a request for an ABR Borrowing.

(b) Notwithstanding anything to the contrary herein or in any other Loan Document (and any Hedging Agreement shall be deemed not to be a “Loan Document” for purposes of this Section 2.11), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

 

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(c) Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that, this clause (c) shall not be effective unless the Administrative Agent has delivered to the Lenders and the Borrower a Term SOFR Notice. For the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion.

(d) In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(e) The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent, the Borrower or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.11, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.11.

(f) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or LIBO Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of

 

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information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(g) Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Eurocurrency Borrowing of, conversion to or continuation of Eurocurrency Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to ABR Loans. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR.

SECTION 2.12. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii) impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurocurrency Loans made by such Lender; or

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of the term “Excluded Taxes” and (C) Connection Income Taxes) on its loans, loan principal, commitments or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, from time to time upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs or expenses incurred or reduction suffered.

 

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(b) If any Lender reasonably determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements has had or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then, from time to time upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.12 delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.12 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 2.12 for any increased costs or expenses incurred or reductions suffered more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or expenses or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or expenses or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.13. Break Funding Payments. In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert or continue any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto, (d) the failure to prepay any Eurocurrency Loan on a date specified therefor in any notice of prepayment given by the Borrower (whether or not such notice may be revoked in accordance with the terms hereof) or (e) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.16 or 9.02(c), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event (excluding any loss of anticipated profits). Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan (but not including the Applicable Rate applicable thereto), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such