Securities Purchase Agreement, dated as of April 9, 2021, by and among Ingersoll Rand Inc., Club Car, LLC and MajorDrive Holdings IV, LLC

Section 5.9          Investment Purposes. 

 

(a)          Purchaser is purchasing the Purchased Equity Interests for its own account for investment purposes and not with a view toward distribution or re-sale in violation of the Securities Act, and all other applicable securities Laws, rules or regulations. Purchaser is an “accredited investor” as defined in Regulation D promulgated by the SEC under the Securities Act. Purchaser acknowledges that it is informed as to the risks of the transactions contemplated by this Agreement and of ownership of the Purchased Equity Interests.

 

(b)          Purchaser acknowledges that none of the Purchased Equity Interests has been registered under federal Law or qualified under state Law, but rather has been offered for sale in accordance with certain exemptions under applicable Law and that the Purchased Equity Interests may not be resold by it unless they are subsequently registered or qualified under applicable Law, or an exemption from registration and qualification is then available.

 

 

 

Section 6.1          Conduct of the Company’s Business.  Except for matters set forth in Section 6.1 of the Company Disclosure Schedule, for matters otherwise expressly permitted or required by the terms of this Agreement (including in connection with the Reorganization) or as required by applicable Law (including the Pandemic Measures), from the date of this Agreement to the earlier of the Closing and the termination of this Agreement in accordance with Article VIII, the Seller and the Company shall use commercially reasonable efforts to conduct the Company Business in the ordinary course of business, keep intact the Company Business and preserve the Company Business’ relationships with its customers and suppliers with whom it currently deals, in each case, in all material respects.  In addition (and without limiting the generality of the foregoing), except as set forth in Section 6.1 of the Company Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement (including in connection with the Reorganization) or except as required by applicable Law (including the Pandemic Measures), from the date of this Agreement to the earlier of the Closing and the termination of this Agreement in accordance with Article VIII, the Seller and the Company shall not, and shall not permit any of the Seller Entities or Acquired Subsidiaries to, do any of the following with respect to the Company Business without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned):

 

(b)          (i) increase the compensation or benefits of any Company Employee except (A) as required pursuant to the terms of any Company Benefit Plan or any Affiliated Benefit Plan in effect as of the date hereof or (B) increases in base compensation in the ordinary course of business consistent with past practice to Company Employees other than executive officers, provided, however, that the aggregate amount of all such increases may not exceed $75,000 on an annualized basis without Purchaser’s prior written consent, (ii) grant any severance or termination pay to any Company Employee except as required pursuant to the terms of any Company Benefit Plan or any Affiliated Benefit Plan in effect as of the date hereof, (iii) establish, adopt, enter into, materially amend or terminate any Affiliated Benefit Plan or any Company Benefit Plan; provided, that the foregoing shall not prohibit (A) any Acquired Company from entering into employment agreements in connection with new hires or from amending any employment agreement in connection with any promotion, in each case other than with respect to executive officers, to the extent consistent with past practices or (B) Seller from establishing, adopting, amending or terminating any Affiliated Benefit Plan that is a broad-based employee benefit plan or arrangement that applies substantially uniformly to Company Employees and other similarly situated employees of Seller and its Affiliates, (iv) adopt or amend any Affiliated Benefit Plan that covers Company Employees and that would materially increase the costs to the Acquired Companies other than with respect to the Company’s annual renewal and reenrollment of its health and welfare plans in the ordinary course of business, (v) enter into any collective bargaining agreement, or (vi) issue any equity or equity linked awards, including any stock options or restricted stock units to Company Employees, other than in the ordinary course of business consistent with past practice;

 

(c)          incur any Indebtedness for borrowed money or issue any debt securities other than (i) Indebtedness between the Acquired Companies, (ii) borrowings under any instruments of Indebtedness existing as of the date hereof, (iii) Indebtedness that will be repaid on or before the Closing Date or (iv) other Indebtedness in an aggregate amount not to exceed $10,000,000;

 

(d)          create any mortgage, lien, pledge or security interest on any of the assets of any of the Acquired Companies or any of the assets that will be transferred to the Acquired Companies pursuant to the Reorganization (other than Permitted Encumbrances), other than as required by any instruments of Indebtedness existing as of the date hereof or any Indebtedness incurred after the date hereof permitted in accordance with Section 6.1(c);

 

(e)          make any material change in accounting methods, other than as required by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization;

 

(f)          other than in the ordinary course of business consistent with past practice, (i) make or change any material Tax election or Tax accounting period, (ii) surrender any right to claim a refund of material Taxes, (iii) file any amended material Tax Return, or (iv) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment, in each case, with respect to any Acquired Company;

 

(g)          acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or Person or division thereof, other than purchases of assets in the ordinary course of business consistent with past practice;

 

(h)          sell, assign, transfer, exclusively license, allow to expire or lapse or otherwise dispose of any of the properties, rights or assets that are material, individually or in the aggregate, to the Company Business taken as a whole, other than in the ordinary course of business consistent with past practice;

 

(i)          settle or compromise any Action against the any of the Acquired Companies other than settlements or compromises of litigation where (i) the amount paid does not exceed $500,000 individually, and (ii) such settlement or compromise does not impose any material restrictions on the business or operations of the Acquired Companies or require any Acquired Company to admit liability;

 

(j)          commit to make any capital expenditure, capital addition or capital improvement (or series of related capital expenditures, capital additions or capital improvements) in excess of $1,500,000 individually or $5,000,000 in the aggregate, other than capital expenditures provided for in the budget previously made available to Purchaser or fail to approve and permit to be made any budgeted capital expenditure that is requested to be made by management of the Company in the ordinary course of business consistent with the timing of such budget and the timing set forth in the request by management of the Company;

 

(k)          cancel, terminate or materially and adversely amend any Material Contract, other than in the ordinary course of business consistent with past practice;

 

(l)          reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of capital stock of the Acquired Companies or make any other change with respect to the capital structure of the Acquired Companies;

 

(m)          adopt a plan of complete or partial liquidation, dissolution, merger, consolidation or recapitalization of any of the Acquired Companies;

 

(n)          declare any dividend or distribution in respect of capital stock or other equity interest of any Acquired Company with a payment date on or after the Closing Date, or enter into any agreement to repurchase any shares of common stock of the Company with a closing date on or after the Closing Date, except for  dividends, distributions or other payments by any Acquired Subsidiary to the Company;

 

(o)          change in any material respect the manner in which it manages its working capital, including by delaying the payment of accounts payable or accelerating the collection of accounts receivable;

 

(p)          effect any reduction in force, mass layoff or plant closure or take any similar action; or

 

(q)          authorize any of, or commit or agree to take, whether in writing or otherwise, any of, the foregoing actions.

 

Notwithstanding the foregoing or anything in this Agreement to the contrary, Seller, the Seller Entities and the Company may take (or not take, as the case may be), with respect to the Company Business, any of the actions that would otherwise be prohibited under this Section 6.1 if reasonably necessary or prudent (i) in response to the Pandemic, the Pandemic Measures or any other emergency situation, provided, however, that Seller shall, to the extent practicable and legally permissible notify Purchaser prior to taking any such actions, or (ii) in connection with implementing the Reorganization in accordance with Section 6.14.  Nothing contained in this Agreement shall be construed to give Purchaser or any of its Affiliates, directly or indirectly, any right to control or direct the Company Business prior to the Closing or any other businesses or operations of Seller or its Affiliates.  Prior to the Closing, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its Affiliates (including the Company) and of their respective businesses and operations.

 

Section 6.2          Conduct of Purchaser’s Business.  Purchaser agrees that, from the date of this Agreement until the earlier of the Closing and the termination of this Agreement in accordance with Article VIII, it shall not and shall cause each of its Affiliates not to, directly or indirectly, take any action (including any action with respect to a third party) that would reasonably be expected to materially prevent, impair or delay Purchaser’s ability to perform its respective obligations under this Agreement and the other Transaction Agreements or consummate the transactions contemplated hereby or thereby.

 

Section 6.3          Employment Matters.

 

(a)          The parties agree that, in connection with the Reorganization and/or the completion of the transactions contemplated by this Agreement, the employees of Seller or any of its Affiliates who, as of immediately prior to the Closing, primarily support or are dedicated to support the Company Business and who are not employed by an Acquired Company as of the date of this Agreement, shall be transferred to an Acquired Company prior to the Closing or with respect to such employees who are located outside of the United States, may be transferred to a third party professional employer organization prior to the Closing pursuant to a Contract between such Acquired Company and such third party. Seller wishes to retain one employee of an Acquired Company who, as of the date hereof, does not primarily support and is not dedicated to support, the Company Business and who is listed on Section 6.3(a) of the Company Disclosure Schedule.  Prior to the Closing Date, Seller shall transfer this employee to Seller or one of Seller’s Subsidiaries (other than an Acquired Company).

 

(b)          During the one-year period following the Closing, Purchaser shall, and shall cause its Affiliates to, provide each Company Employee with (i) a base salary or base rate of pay and a target cash incentive compensation opportunity that are no less favorable in the aggregate than the base salary or base rate of pay and the target cash incentive compensation opportunity provided to such Company Employee immediately prior to the Closing and (ii) employee benefits (including severance payments and severance benefits, but except as otherwise expressly provided in this Section 6.3, not including any equity or equity-linked incentives, deferred compensation or other long-term incentive compensation benefits, or benefits under a defined benefit plan) that are no less favorable in the aggregate than the employee benefits provided to such Company Employee immediately prior to Closing.  Notwithstanding the foregoing or any other provision of this Agreement, Purchaser and the Acquired Companies may make generally applicable reductions in compensation, bonus opportunities and health and welfare benefits to the extent reasonably necessary to respond to material adverse changes in the severity of the impact of the Pandemic on the Company Business as a whole beyond the impact as of the date hereof.  The covenants of Purchaser in this Section 6.3(b) assume the accuracy in all material respects of the relevant information made available to Purchaser by Seller. If and to the extent that any such information was not accurately disclosed in any material respect, Seller’s right to enforce the covenants in this Section 6.3(b) shall be limited to the extent of the defect in Seller’s disclosure unless Purchaser is otherwise reimbursed by Seller for providing such benefits.

 

(c)          Effective immediately prior to the Closing, Seller shall take any actions necessary to ensure that each Company Employee who received a grant of restricted stock units in 2020 under Seller’s one time broad based restricted stock unit grant program (the “2020 One-Time Equity Grant Program”) shall vest as to the portion of the RSUs granted under the 2020 One-Time Equity Grant Program that were otherwise scheduled to vest on the first regularly-scheduled vesting date of the RSUs (to the extent that such vesting date occurs after Closing)(such portion to be so vested, “Vested RSUs”).  As soon as practicable (and in no event later than sixty (60) days) following the Closing, Purchaser shall cause the Company to implement an equity-linked long-term incentive plan pursuant to which each Company Employee who received a grant of RSUs in 2020 under the 2020 One-Time Equity Grant Program will receive one new “equity participation unit” for each RSU that is forfeited upon the Closing.  At any time that a forfeited RSU would have vested under the 2020 One-Time Equity Grant Program, the participant will receive a cash payment with respect to the related “equity participation unit” equal to Closing Date FMV of a Share of Seller Stock increased or decreased by the same percentage as the equity value of the Company increases or decreases from the Closing Date until such vesting date.

 

(d)          As soon as practicable (and in no event later than sixty (60) days) following the Closing, Purchaser shall cause the Company to implement an equity-linked long-term incentive plan pursuant to which each Company Employee who received a grant of RSUs or a stock option grant under Seller’s annual and recurring equity grant program (the “Recurring Equity Grant Program”) will receive one new “equity participation unit” for each time-based vesting RSU, each performance-based vesting RSU (based on the target number of RSUs) and each stock option that is forfeited upon the Closing.  At any time that a forfeited RSU or stock option would have vested under the Recurring Equity Grant Program (using, after the Closing, (x) substantially similar vesting terms for the RSUs subject to performance-based vesting that apply to the RSUs subject to time-based vesting and (y) the same vesting terms for RSUs subject to time-based vesting), the participant will receive a cash payment with respect to the related “equity participation unit” (determined in the same manner as provided in Section 6.3(c)), with the understanding that the value of the participation units associated with stock options will take into account the exercise price of the associated stock option.

 

(e)          Purchaser shall, and shall cause its Affiliates, as applicable, to give Company Employees full credit for such Company Employees’ service with the Company and its Affiliates for purposes of eligibility, vesting, and determination of the level of benefits (including for purposes of any vacation pay, disability and severance plan, but excluding for purposes of any defined benefit pension plan accruals), to the same extent recognized by the Company immediately prior to the Closing, under any benefit plans made available to employees or officers or any class or level of employees or officers of Purchaser or any of its Affiliates in which a Company Employee participates; provided, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits with respect to the same period of service.

 

(f)          Purchaser shall, and shall cause its Affiliates, as applicable, use commercially reasonable efforts to cause all applicable providers of health benefits to (i) waive any preexisting condition limitations otherwise applicable to Company Employees and their eligible dependents under any plan of Purchaser or any of its Affiliates that provides health benefits in which Company Employees may be eligible to participate following the Closing, to the extent waived or satisfied with respect to such employees as of the Closing under the analogous Company Benefit Plan or Affiliated Benefit Plan, (ii) honor any deductible, co-payment and out-of-pocket maximums incurred by Company Employees and their eligible dependents under the health plans in which they participated immediately prior to the Closing during the portion of the calendar year prior to the Closing in satisfying any deductibles, co-payments or out-of-pocket maximums under health plans of Purchaser or any of its Affiliates in which they are eligible to participate after the Closing in the same plan year in which such deductibles, co-payments or out-of-pocket maximums were incurred and (iii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a Company Employee and his or her eligible dependents on or after the Closing, in each case to the extent such Company Employee or eligible dependent had satisfied any similar limitation or requirement under an analogous Company Benefit Plan or Affiliated Benefit Plan prior to the Closing.

 

(g)          Purchaser shall, and shall cause its Affiliates, as applicable, to maintain the bonus opportunities provided for under any Company Benefit Plan that is an annual bonus plan or any Affiliated Benefit Plan (with respect to any portion of such Affiliated Benefit Plan applicable to any Company Employee) through December 31, 2021 and will pay any bonuses earned thereunder at such time as the Company has historically paid such bonuses.  Each Continuing Employee’s bonus for calendar year 2021 shall be no less than the amount accrued as a current liability as of the Adjustment Time with respect to such Continuing Employee’s bonus under the applicable Company Benefit Plan or Affiliated Benefit Plan.

 

(h)          With respect to the Company Employee transaction bonus agreements (the “Transaction Bonus Agreements”) set forth on Section 6.3(h) of the Company Disclosure Schedule, which provide for a transaction bonus payable with respect to 50% of the transaction bonus at or shortly after Closing (such bonuses, the “Transaction Completion Bonuses”) and 50% of the transaction bonus payable at the end of a specified post-Closing retention period (such bonuses, the “Retention Bonuses”, and, together with the Transaction Completion Bonuses, the “Transaction Bonuses”), Purchaser shall cause the applicable Acquired Company or Companies to pay any Transaction Completion Bonuses and Retention Bonuses payable under such Transaction Bonus Agreements in accordance with and subject to the terms thereof.  Seller and Purchaser agree that it is their mutual intent that, to the extent permitted by applicable Law, Seller or one of its Affiliates shall be entitled to any income Tax deductions associated with the payment of the Transaction Completion Bonuses.

 

(i)          Effective as of the Closing, each Company Employee shall cease to actively participate in (including with respect to eligibility to contribute to) and accrue benefits under all Affiliated Benefit Plans (and Seller shall, and shall cause its Affiliates to take any and all action to achieve the foregoing result).  Seller or its Affiliates (excluding the Acquired Companies) shall retain responsibility for and continue to pay all medical, life insurance, disability, and other expenses and benefits for each Company Employee with respect to claims incurred by such Company Employee or his or her covered dependents under the Affiliated Benefit Plans prior to the Adjustment Time (or after the Adjustment Time to the extent such claims relate to premiums paid in whole or in part by the Company Employees for the month in which the Closing occurs and are otherwise covered under the terms of the Affiliated Benefit Plan).  Seller shall have the sole obligation to provide health continuation coverage required by Section 4980B of the Code or any similar Law with respect to any employee (and such employee’s “qualified beneficiaries,” as defined in Section 4980B(g)(1) of the Code) who experiences a “qualifying event” (as defined in Section 4980B(f)(3) of the Code) prior to or on the Closing Date with respect to the loss of their entitlement to coverage under any group health plan of the Seller or any of its Affiliates.  Expenses and benefits with respect to claims incurred by Company Employees or their covered dependents after the Closing shall be the responsibility of Purchaser.  For purposes of this paragraph, a claim is deemed incurred (i) in the case of medical, dental, vision and prescription drug benefits, on the date on which the services that are the subject of the claim are performed or the goods that are subject to the claim are provided; (ii) in the case of life, accidental death and dismemberment and business travel accident insurance, on the date on which the event giving rise to such claim occurs; (iii) in the case of disability benefits, on the date on which a Person’s continuous disability begins, as determined by the disability benefit insurer or claims insurer, with respect to the disability event giving rise to such claim; and (iv) otherwise, at the time the Company Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).  Following the Closing, Purchaser and its Affiliates will be solely responsible for all United States (including its territories) workers’ compensation claims of Company Employees regardless of when the event, injury, illness or condition giving rise to such workers’ compensation claim occurs, except to the extent that claims that relate to an event, injury, illness or condition occurring prior to the Closing are covered under an applicable workers’ compensation insurance policy of Seller or its Affiliates (excluding the Acquired Companies).

 

(j)          Seller shall be responsible for providing long-term disability benefits to (i) any former employee of an Acquired Company or the Company Business who was receiving long-term disability benefits immediately prior to the Closing Date and (ii) any Company Employee who was receiving short-term disability benefits immediately prior to the Closing and who becomes eligible for long-term disability benefits with respect to a disability that first occurred prior to the Closing and continues in effect (without such Company Employee’s return to active employment) until such Company Employee otherwise becomes eligible for long-term disability benefits under Seller’s long-term disability plan. If any former Company Employee who is receiving long-term disability benefits as of the Closing Date is, within six (6) months following the Closing Date (or any such longer period as required by applicable Law), able to return to work, Purchaser shall cause the applicable Acquired Company to offer employment to such employee on terms consistent with those applicable to Company Employees under this Section 6.3.

 

(k)          Seller and Purchaser shall take commercially reasonable efforts to cause, effective as of the Closing, (i) the account balances (whether positive or negative) (the “Transferred FSA Balances”) under the applicable flexible spending plan of Seller or its Affiliates (collectively, the “Seller FSA Plan”) of the Company Employees who are participants in the Seller FSA Plan to be transferred to one or more comparable plans of Purchaser (collectively, the “Purchaser FSA Plan”); and (ii) such Company Employees to be reimbursed from the Purchaser FSA Plan for claims incurred at any time during the plan year of the Seller FSA Plan in which the Closing occurs that are submitted to the Purchaser FSA Plan from and after the Closing. As soon as practicable after the Closing, and in any event within ten (10) Business Days after the amount of the Transferred FSA Balances is determined, Seller shall pay Purchaser the net aggregate amount of the Transferred FSA Balances, if such amount is positive, and Purchaser shall pay Seller the net aggregate amount of the Transferred FSA Balances, if such amount is negative.

 

(l)          On or before the Closing, Seller shall cause the Ingersoll Rand Retirement Savings Plan (the “Seller 401(k) Plan”) to spin off to a new defined contribution plan that will be sponsored by an Acquired Company and a related trust intended to be qualified under Section 401(a) and Section 501(a) of the Code, respectively, which plan includes a cash or deferred arrangement qualified under Section 401(k) of the Code (the “Company 401(k) Plan”), the portion of the Seller 401(k) Plan that is attributable to the Company Employees, such spin-off to include (without limitation) any and all such individual’s accounts, liabilities, related assets, unvested amounts and outstanding loan balances. The Company 401(k) Plan shall be substantially identical to the Seller 401(k) Plan, except that, with respect to Company Employees who are participants in the Ingersoll-Rand Industrial U.S., Inc. Pension Plan (the “Seller Pension Plan”) and who did not elect to waive participation in the Seller Pension Plan effective as of January 1, 2013 in accordance with the terms of the Seller Pension Plan, the Company 401(k) Plan shall provide for such participants to receive the “Core Contribution” described in the Seller 401(k) Plan effective on the Closing; provided that, after the Closing, the Company 401(k) Plan shall not be amended to reduce or eliminate the Core Contribution prior to December 31, 2022, unless the provision of the Core Contribution would cause the Company 401(k) Plan to fail to meet the applicable non-discrimination tests, in which case, Purchaser shall, in Purchaser’s sole discretion (and on a non-discriminatory basis as to all participants who are otherwise eligible to receive the Core Contribution), either (i) provide the Core Contribution in a future year when and if such non-discrimination test would be satisfied or (ii) provide an additional benefit of economically equivalent value to the Core Contributions that would have been accrued by such participants through December 31, 2022 (which benefit may be provided outside the Company 401(k) Plan).

 

(m)          On or prior to the Closing, Seller shall have taken all actions necessary and appropriate for the Acquired Companies to establish for the benefit of Company Employees one or more deferred compensation plans (collectively, the “Company Deferred Compensation Plans”) to provide each Company Employee who was a participant in one or more of the Seller Deferred Compensation Plans as of immediately prior to the Closing (each, a “Company Deferred Compensation Plan Beneficiary”) benefits in respect of service and compensation following the Closing that are substantially identical to those that accrued with respect to such person under, and the opportunity to defer compensation and accrue benefits on a basis that is substantially identical to, the Seller Deferred Compensation Plans as of immediately prior to the Closing (as such plans are amended to (i) reflect the adoption and assumption of the Company Deferred Compensation Plans by the Acquired Companies (including, without limitation, to reflect that a “Change in Control” (or equivalent term) shall be determined by reference to the Acquired Companies after the Closing (but, for the avoidance of doubt, not in connection with or upon the Closing), and not by reference to the Seller Entities), (ii) eliminate any notional investment option that is based on employer stock, and (iii) to provide that benefits shall continue to accrue after the Closing based on service with the Acquired Companies, in each case, on such basis as does not either reduce any benefits previously accrued or provide additional benefits to any participant beyond what such participant would have received under the terms of the plan in effect immediately prior to the Closing, all to the extent applicable and permissible under the terms of the applicable plan).  Notwithstanding the foregoing, the terms of the Company Deferred Compensation Plans shall be subject to the review and approval of Purchaser, which approval shall not be unreasonably withheld, and Seller shall make any changes reasonably proposed by Purchaser to reflect the intention of this Section 6.3(m).  Seller shall take all such action as may be necessary to ensure that, from and after the Closing Date, the Company Employees shall no longer participate in the Seller Deferred Compensation Plans and Seller shall cause the liabilities in respect of Company Deferred Compensation Plan Beneficiaries under the Seller Deferred Compensation Plans to be assumed by an Acquired Company as of the Adjustment Time.  The assets of the Deferred Compensation Plans that are attributable to the accrued benefits of the  Company Deferred Compensation Plan Beneficiaries (including any amounts set aside in trust, a bank account or the cash equivalent amount necessary to fund any amount reflected as an asset of the Company Business on the Financial Statements or the Unaudited Financials) shall be transferred to the Acquired Companies no later than thirty (30) days after the Closing Date.  From and after the Closing, Purchaser and its Affiliates (including the Acquired Companies) shall have sole responsibility for the administration of the Company Deferred Compensation Plans and the payment of benefits thereunder to or on behalf of Company Deferred Compensation Plan Beneficiaries, and neither Seller nor any of its Affiliates shall have any liability or responsibility therefor. Seller shall take all such action as may be necessary to ensure that, for purposes of the Company Deferred Compensation Plans, (i) a Company Deferred Compensation Plan Beneficiary shall not be considered to have incurred a separation from service as determined under the terms of the Company Deferred Compensation Plans and the general rules of Section 409A of the Code as a result of the Closing or the transfer of employment or service from Seller (or an Affiliate thereof) to an Acquired Company, and (ii) such employment or service shall be considered to terminate for purposes of the Company Deferred Compensation Plans only when the employment or service of such Company Deferred Compensation Plan Beneficiary with the Acquired Company terminates in accordance with the terms of the Company Deferred Compensation Plans and applicable Laws.

 

(n)          Effective as of the Adjustment Time, to the extent permitted by applicable Law, Seller’s obligations and liabilities with respect to the accrued and unused vacation, sick leave and other personal time off of each Company Employee through the Adjustment Time, shall be transferred to and assumed by the Acquired Company that will be the employer of such Company Employee, and Purchaser shall cause the applicable Acquired Company to recognize and provide all such unused vacation, sick leave and paid time off and shall allow such Company Employee to use such accrued vacation, sick leave and paid time off on substantially the same terms as applied to such Company Employee immediately prior to the Closing; provided, however, that the accrual for any such obligations shall be included as a current liability of the Company in determining Working Capital as of the Adjustment Time.  To the extent the transfer and assumption of such obligations with respect to any Company Employee is not permitted by applicable Law, Seller shall satisfy such accrued obligations on the Closing Date.

 

(o)          Purchaser shall assume and have Liability for, and pay, any amounts payable to the Company Employees set forth on Schedule 6.3(o) of the Company Disclosure Schedule who have received advance approval under a Seller training and educational assistance policy or tuition reimbursement policy; provided that such Company Employee has commenced or completed a class or coursework eligible for assistance thereunder as of the Closing Date.

 

(p)          The provisions of this Section 6.3 are solely for the benefit of the parties to this Agreement.  Nothing contained herein, express or implied, shall be construed to establish, amend, or modify any benefit plan, program, agreement or arrangement.  No Company Employee, nor any beneficiary or dependent of any Company Employee or any other Person shall be regarded for any purpose as a third-party beneficiary of this Agreement, and no provision of this Section 6.3 shall create such rights in any such person.  The parties hereto acknowledge and agree that the terms set forth in this Section 6.3 shall not create any right in any Company Employee to any continued employment with any Acquired Company, Purchaser or any of their respective Affiliates, successors, or assigns.  Nothing herein shall guarantee employment for any period of time or preclude the ability of any Acquired Company to terminate the employment of any Company Employee at any time or for any reason, require any Acquired Company to continue any Company Benefit Plan or arrangement or prevent the amendment, modification or termination thereof after the Closing Date.

 

(q)          Seller and its Affiliates shall comply with all obligations to notify, bargain and/or consult with Company Employees or employee representatives, unions, works councils or other employee representative bodies.  Purchaser shall provide Seller with such information as is necessary or reasonably requested by Seller to comply with such obligations and shall, as reasonably requested by Seller or to the extent required by Law or Contract, participate in such bargaining or consultations.

 

(r)          Except as otherwise provided in this Section 6.3, Seller and its Affiliates (other than the Acquired Companies) shall retain (i) all liabilities and obligations for claims under the Affiliated Benefit Plans, whether such claims are made before, on or after the Closing Date, and (ii) any and all Losses arising out of, or relating to, any Affiliated Benefit Plan or any other employee benefit plan, employee plan, program, policy, arrangement or agreement, other than any Company Benefit Plan, sponsored or maintained, or entered into, by Seller or any of its Affiliates (other than the Acquired Companies).

 

Section 6.4          Publicity.  Following the execution hereof, Seller may issue the press release that was approved by Purchaser prior to the date hereof and Purchaser may issue the press releases that was approved by Seller prior to the date hereof announcing the entry into this Agreement and the nature of the transactions contemplated hereby.  Following the issuance of such initial press releases, Purchaser, on the one hand, and the Company and Seller, on the other hand, agree that no public release or announcement concerning the terms of the transactions contemplated hereby shall be issued by any party without the prior written consent of the other party, except (a) to the extent consistent with the previous public announcements or press releases made by any of the parties in accordance with this Section 6.4 or (b) any such release or announcement as may be required by Law or the rules and regulations of any stock exchange upon which the securities of one of the Seller, Company’s or Seller’s Affiliates or Purchaser or one of its Affiliates are listed, in which case the party required to make such release or announcement shall allow the other party reasonable time to comment on such release or announcement in advance of such issuance; provided, however, that (i) Purchaser, Seller and the Company are permitted to disclose the consummation of the transactions contemplated hereby (but not, without the consent of the other parties, price terms or the name of such other parties to the extent inconsistent with the previous public announcements or press releases made by any of the parties in accordance with this Section 6.4) on their websites and otherwise in the ordinary course of business, (ii) the parties are permitted to report and disclose the status of this Agreement, the Transaction Agreements and the transactions contemplated hereby and thereby pursuant to an internal communication or otherwise to its employees, (iii) following the issuance of the initial press releases, the parties are permitted to discuss this Agreement and the transactions contemplated hereby in meetings, discussions and conference calls with investors and analysts and post an investor presentation without the prior written consent of the other party to the extent such discussions or presentation do not otherwise disclose any material non-public terms of this Agreement or any of the Transaction Agreements and (iv) Purchaser may disclose, on a confidential basis, the status and financial and other terms of this Agreement and the transactions contemplated by the Transaction Agreements to its direct and indirect investors and prospective investors.  Notwithstanding the forgoing, nothing in this Section 6.4 shall restrict or prohibit Purchaser or any of its Affiliates from making any customary announcement or other communication in connection with the arrangement of the Debt Financing (including, for the avoidance of doubt, such announcement or communications that Purchaser reasonably determines in good faith are required to ensure that any document concerning the Debt Financing does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in light of the circumstances in which they are made), provided, that any such announcement or other communication is consistent with the previous public announcements or press releases made by any of the parties in accordance with this Section 6.4

 

Section 6.5          Confidentiality.

 

(a)          Purchaser acknowledges that the information provided to it and its Representatives in connection with this Agreement and the transactions contemplated hereby are subject to the terms of the Confidentiality Agreement between Seller and an Affiliate of Purchaser, dated as of December 16, 2020 (as amended or modified from time to time, the “Confidentiality Agreement”).  The terms of the Confidentiality Agreement are hereby incorporated by reference and shall survive any termination of this Agreement in accordance with its terms.

 

(b)          From and after the Closing, Purchaser and the Company shall, and shall cause each of their Affiliates (including their respective Subsidiaries) and their respective Representatives to, (i) treat and hold as confidential any non-public, proprietary and confidential information regarding Seller or its Affiliates in their businesses distinct from the Company Business and (ii) refrain from disclosing to any Person (other than their respective Representatives) or using for any purpose, any of such information except as permitted by Section 6.5(d).

 

(c)          From and after the Closing, Seller shall, and shall cause each of its Affiliates (including its Subsidiaries) and their respective Representatives to, (i) treat and hold as confidential any non-public, proprietary and confidential information regarding the Company Business and (ii) refrain from disclosing to any Person (other than its Representatives) or using for any purpose, any such information except as permitted by Section 6.5(d).

 

(d)          The obligations of each party hereto (a “Receiving Party”) set forth in Section 6.5(b) and Section 6.5(c), as applicable, shall not apply to (i) any information that becomes available to the general public prior to, on or after the Closing Date (other than as a result of disclosure by the Receiving Party or any of its Representatives in violation of Section 6.5(b), Section 6.5(c) or the Confidentiality Agreement, as applicable), (ii) any information that becomes available to the Receiving Party or any of its Representatives after the Closing Date on a non-confidential basis from a source other than the other party hereto (the “Disclosing Party”) or its Representatives; provided that such source was not, to the knowledge of the Receiving Party, prohibited from disclosing such information by a legal, contractual, fiduciary or other obligation, (iii) except as provided in clause (vi) below, any disclosure requested or required by applicable Law or any Governmental Entity, including any applicable Tax Laws, securities Laws or securities exchange or listing regulations or requirements; provided that, to the extent such disclosure is requested or required in connection with a Governmental Order, the Receiving Party shall, to the extent reasonably practicable and legally permissible, promptly notify the Disclosing Party of such disclosure under this clause (iii) prior to making such disclosure with reasonably sufficient time, where reasonably practicable, to allow the Disclosing Party to seek protective measures for such information (and the Receiving Party and its Representatives shall cooperate with the Disclosing Party in seeking such protection, at the Disclosing Party’s sole cost and expense), (iv) any Governmental Order in connection with the enforcement of a party’s rights or remedies under this Agreement or the other Transaction Agreements solely to the extent necessary for any filings with a Governmental Entity (provided that, to the extent possible, the applicable party shall request that such Governmental Entity treat such information as confidential and non-public), (v) any disclosure or use of such information in connection with the preparation of financial statements, in connection with and to the extent necessary for a party or any of its Representatives to prepare or file Tax Returns or other Tax filings, (vi) any disclosure or use of such information that is necessary for a party to perform or satisfy any of its obligations under this Agreement or any of the other Transaction Agreements or as otherwise contemplated by this Agreement or any of the other Transaction Agreements, or (vii) any information that is independently developed by the Receiving Party or its Representatives without reference to or use of any such information of the Disclosing Party.

 

Section 6.6          Access to Information.

 

(a)          Prior to the Closing Date and subject to applicable Laws (including the Pandemic Measures) and Section 6.5, Purchaser shall be entitled, through its officers, employees and Representatives (including its legal advisors and accountants), to have such access to the personnel, properties, businesses and operations of the Company and such examination of the books and records of the Company, as it reasonably requests upon reasonable advance written notice in connection with Purchaser’s efforts to consummate the transactions contemplated by this Agreement.  Any such access and examination shall be conducted during regular business hours and under circumstances that do not unreasonably interfere with the normal operations of the business and shall be subject to restrictions under applicable Law (including the Pandemic Measures).  Seller and the Company shall, and shall cause the Acquired Subsidiaries and the respective Representatives of Seller, the Company and the Acquired Subsidiaries to, cooperate with Purchaser and Purchaser’s Representatives in connection with such access and examination.  Notwithstanding anything to the contrary in this Agreement, any such access may be limited to the extent Seller reasonably determines that such access would reasonably be expected to jeopardize the health or safety of any employee of Seller or its Affiliates due to the Pandemic or Pandemic Measures.  Any disclosure during such investigation by the Company or its Representatives shall not constitute any enlargement or additional representation or warranty of Seller or the Company beyond those specifically set forth in Article IV.  Notwithstanding anything herein to the contrary, no such access or examination shall be permitted to the extent that it (i) relates to interactions with other prospective buyers of the Company or the negotiation of this Agreement and the transactions contemplated hereby, (ii) would unreasonably disrupt the operations of Seller, its Subsidiaries or any of the Acquired Companies, or (iii) would require Seller, its Subsidiaries or any of the Acquired Companies to disclose information that, in the reasonable judgment and good faith of counsel to Seller or the Company, is subject to attorney-client privilege or may conflict with any applicable Law or confidentiality obligations to which any of Seller, its Subsidiaries or the Acquired Companies is bound; provided, however, that if any material information concerning the Company Business is withheld pursuant to the foregoing clause (iii), Seller will work with Purchaser in good faith to make the substance of such information available to Purchaser or its Representatives.

 

(b)          Notwithstanding anything to the contrary contained herein, prior to the Closing, Purchaser shall not, without the written consent of the Company, (i) contact any customers of the Company Business, other than in the ordinary course of business of Purchaser or any of its Affiliates with respect to matters not involving the Company Business, any of the Transaction Agreements or the transactions contemplated hereby or thereby, and provided that Seller or the Company shall have the right to have a Representative present during any such contact in the event that it consents to such contact, and (ii) have any right to perform invasive or subsurface investigations of the properties or facilities of the Acquired Companies.

 

Section 6.7          Regulatory Approvals.

(a)          Each of the parties hereto shall use their reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done as promptly as practicable, all things necessary, proper and advisable under applicable Laws, to consummate and make effective as promptly as practicable the transactions contemplated hereby.  Subject to appropriate confidentiality protections and applicable Competition Laws, each party hereto shall furnish to the other parties such necessary information and reasonable assistance as such other party may reasonably request in connection with the foregoing.

 

(b)          Each of the parties hereto shall cooperate with one another and use their reasonable best efforts to prepare all necessary documentation (including furnishing all information required under any applicable Competition Laws) to effect promptly all necessary filings with any Governmental Entity and to obtain all consents, waivers and approvals of any Governmental Entity necessary to consummate the transactions contemplated hereunder.  Each of the parties hereto shall promptly inform the other of any substantive oral communication with, and provide copies of any written communications with, any Governmental Entity regarding any such filings or any such transaction, unless prohibited by reasonable request of any Governmental Entity.  No party hereto shall independently participate in any meeting or substantive conference call with any Governmental Entity in respect of any such filings, investigation or other inquiry without giving the other party prior notice of the meeting or substantive conference call and, to the extent permitted by such Governmental Entity, the opportunity to attend or participate.  To the extent permissible under applicable Law, the parties hereto will consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto relating to proceedings under the Competition Law.  Any documents or other materials provided pursuant to this Section 6.7(b) may be redacted or withheld as necessary to address reasonable privilege or confidentiality concerns (including with respect to other businesses of Seller), and to remove references concerning the valuation of the Company or other competitively sensitive material, and the parties may, as each deems advisable, reasonably designate any material provided under this Section 6.7 as “outside counsel only material.”  Such “outside counsel only materials” and the information contained therein shall be given only to legal counsel of the recipient and will not be disclosed by such legal counsel to employees, officers, or directors of the recipient without the advance written consent of the party providing such materials.  Notwithstanding the foregoing, neither party shall be obligated to share with the other party documents responsive to items 4(c) and 4(d) on the Notification and Report Form for Certain Mergers and Acquisitions under the HSR Act.

 

(c)          Without limiting the generality of the undertakings pursuant to this Section 6.7, the parties hereto shall use reasonable best efforts to provide or cause to be provided (including by their “Ultimate Parent Entities” as that term is defined in the HSR Act) as promptly as reasonably practicable to any Governmental Antitrust Entity information and documents requested by such Governmental Antitrust Entity or necessary, proper or advisable to permit consummation of the transactions contemplated by this Agreement, including filing any notification and report form and related material required under (i) the HSR Act as promptly as reasonably practicable after the date hereof (but in any event no later than ten (10) Business Days after the date hereof) and (ii) any other filing under any Competition Law set forth on Section 6.7(c) of the Company Disclosure Schedule as promptly as reasonably practicable after the date hereof (but in any event no later than ten (10) Business Days after the date hereof), and thereafter to respond as promptly as reasonably practicable to any request for additional information or documentary material that may be made under the HSR Act and any similar Competition Law regarding preacquisition notifications for the purpose of competition reviews.  Purchaser shall cause (and shall cause its Ultimate Parent Entity) the filings made by it under the HSR Act to be considered for grant of “early termination,” and make any further filings pursuant thereto that may be necessary, proper, or advisable in connection therewith.  Purchaser shall be responsible for all filing fees under the HSR Act and under any such other Laws or regulations.

 

(d)          If any objections are asserted with respect to the transactions contemplated hereby under any applicable Law or if any Action is instituted by any Governmental Entity or any private party challenging any of the transactions contemplated hereby as violative of any applicable Law, each of the parties hereto shall use its reasonable best efforts to: (i) oppose or defend against any action to prevent or enjoin consummation of this Agreement (and the transactions contemplated hereby), and (ii) take such action as reasonably necessary to overturn any regulatory action by any Governmental Entity to prevent or enjoin consummation of this Agreement (and the transactions contemplated hereby), including by defending any Action brought by any Governmental Entity in order to avoid entry of, or to have vacated, overturned or terminated, including by appeal if necessary, in order to resolve any such objections or challenge as such Governmental Entity or private party may have to such transactions under such applicable Law so as to permit consummation of the transactions contemplated by this Agreement.

 

(e)          Notwithstanding the foregoing, Purchaser shall, and shall cause its Affiliates to, take any and all actions necessary to obtain any authorization, consent or approval of a Governmental Entity (including in connection with any Governmental Filings) necessary or advisable so as to enable the consummation of the transactions contemplated hereby to occur as expeditiously as possible (and in any event, no later than the Outside Date) and to resolve, avoid or eliminate any impediments or objections, if any, that may be asserted with respect to the transactions contemplated hereby under any Competition Law, or to otherwise oppose, avoid the entry of, or to effect the dissolution of, any order, decree, judgment, preliminary or permanent injunction that would otherwise have the effect of preventing, prohibiting, restricting, or delaying the consummation of the transactions contemplated hereby, including: (i) proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, the sale, divestiture, licensing or disposition of, or holding separate of, any and all businesses, product lines, rights or assets of Purchaser or its Affiliates (including the Acquired Companies) or any interest therein (including entering into customary ancillary agreements relating to any such sale, divestiture, licensing or disposition of such businesses, product lines, rights or assets), (ii) terminating or restructuring existing relationships, contractual or governance rights or obligations of Purchaser or its Affiliates (including the Acquired Companies), (iii) terminating any venture or other arrangement and (iv) otherwise taking or committing to take any and all actions that after the Closing Date would limit Purchaser’s or its Affiliates’ (including the Acquired Companies’), freedom of action with respect to, or its ability to retain or control, one or more of the businesses, product lines, rights or assets of Purchaser and its Affiliates (including the Acquired Companies) or interest therein, in each case as may be required in order to enable the consummation of the transactions contemplated hereby to occur as expeditiously as possible (and in any event no later than the Outside Date); provided, however, that nothing in this Agreement shall obligate Seller or the Company to take or agree to take any such action not conditioned on the consummation of the Closing.

 

(f)          Notwithstanding anything to the contrary in this Agreement, Purchaser shall not be required to take or agree to take any action with respect to the assets, properties, equity, business or operations of any portfolio companies controlled by Purchaser’s equityholders (other than the Acquired Companies after the Closing).

 

(g)          From the date of this Agreement until Closing, neither Purchaser nor any of its Affiliates shall acquire or agree to acquire, by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or any equity in, or by any other manner, any assets or Person, if the execution and delivery of a definitive agreement relating to, or the consummation of, such acquisition could in any material respect (individually or in the aggregate): (i) impose any delay in obtaining, or increase the risk of not obtaining, consents of a Governmental Entity necessary to consummate the transactions contemplated hereby or the expiration or termination of any applicable waiting period, (ii) increase the risk of a Governmental Entity seeking or entering a Governmental Order prohibiting the consummation of the transactions contemplated hereby, (iii) increase the risk of not being able to remove any such Governmental Order on appeal or otherwise, or (iv) otherwise prevent or delay the consummation of the transactions contemplated hereby.

 

Section 6.8          Director and Officer Liability; Indemnification.

(a)          Without limiting any additional rights that any Person may have under any Company Benefit Plan, from the Closing through the sixth anniversary of the Closing Date, each of Purchaser and the Company shall, and shall cause the Acquired Subsidiaries to, indemnify and hold harmless each present (as of immediately prior to the Closing) and former officer, director, manager, agent, employee or fiduciary of the Acquired Companies (the “Indemnified Individuals”) from and against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to (i) the fact that the Indemnified Individual is or was an officer, director, manager, agent, employee or fiduciary of the Acquired Companies or (ii) matters existing or occurring at or prior to the Closing (including this Agreement and the other transactions and actions contemplated hereby), whether asserted or claimed prior to, at or after the Closing, to the fullest extent permitted by applicable Law.  In the event of any such claim, action, suit, proceeding or investigation, (x) each Indemnified Individual will be entitled to advancement of expenses incurred in the defense of any claim, action, suit, proceeding or investigation from Purchaser or the Company, (y) neither Purchaser nor the Company shall settle, compromise or consent to the entry of any judgment in any proceeding or threatened action, suit, proceeding, investigation or claim (and in which indemnification could be sought by such Indemnified Individual hereunder) unless such settlement, compromise or consent includes an unconditional release of such Indemnified Individual from all liability arising out of such action, suit, proceeding, investigation or claim or such Indemnified Individual otherwise consents and (z) the Company shall cooperate in the defense of any such matter.

 

(b)          The certificate of incorporation and bylaws (or equivalent governing documents) of each of the Acquired Companies shall contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of former or present directors, managers and officers than are set forth in the organizational documents of the Company (or equivalent governing documents) as of the date hereof, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Closing in any manner that would adversely affect the rights thereunder of any such individuals.

 

(c)          Notwithstanding anything herein to the contrary, if any claim, action, suit, proceeding or investigation (whether arising before, at or after the Closing) is made against any Indemnified Individual on or prior to the sixth anniversary of the Closing, the provisions of this Section 6.8 shall continue in effect until the final disposition of such claim, action, suit, proceeding or investigation.

 

(d)          This covenant is intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Individuals and their respective heirs and legal representatives.  The indemnification provided for herein shall not be deemed exclusive of any other rights to which an Indemnified Individual is entitled, whether pursuant to law, contract or otherwise.

 

(e)          In the event that the Company or Purchaser or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or a majority of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of the Company or Purchaser, as the case may be, shall succeed to the obligations set forth in this Section 6.8.

 

Section 6.9          Reasonable Best Efforts.  Without limiting the parties’ obligations under Section 6.7, upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the parties hereto shall, and shall cause their respective Affiliates and Representatives to, use their reasonable best efforts to take or cause to be taken all actions, to do or cause to be done and to assist and cooperate with the other party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated hereby, including: (a) the satisfaction of the conditions precedent to the obligations of any of the parties; (b) the obtaining of applicable consents, waivers or approvals of any Governmental Entities or third parties; (c) the defending of any Actions challenging this Agreement or the performance of the obligations hereby; and (d) the execution and delivery of such instruments, and the taking of such other actions, as the other party may reasonably require in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, none of the Company, Seller or any of their respective Affiliates shall be obligated to make any payments or otherwise pay any consideration to any third party to obtain any applicable consent, waiver or approval.  Without limiting the foregoing, the parties shall use commercially reasonable efforts to negotiate as soon as practicable after the date hereof and in any even no later than the anticipated Closing Date, (i) the Wujiang Contract Manufacturing Agreement, (ii) the Shanghai Distribution Agreement, (iii) the Datacenter Services Agreement and (iv) the Intellectual Property Cross License, in each case on terms consistent with the applicable term sheets attached hereto as Exhibits.

 

Section 6.10        Purchaser Financing.

 

(a)          Purchaser shall use its reasonable best efforts to arrange, obtain and consummate the Financing on the terms and conditions described in or contemplated by the Financing Commitments (including complying with any request exercising so-called “flex” provisions contained therein), as promptly as practicable after the date hereof (taking into account the timing of the Marketing Period), including using reasonable best efforts to (i) maintain in full force and effect the Financing Commitments, (ii) satisfy on a timely basis (taking into account the timing of the Marketing Period) (or obtain the waiver of) all conditions to funding in the Debt Financing Commitments and such definitive agreements to be entered into pursuant thereto (including by consummating the Equity Financing at or prior to the Closing) applicable to Purchaser, and (iii) negotiate and enter into definitive agreements with respect thereto on terms and conditions described in the Debt Financing Commitments (including any “flex” provisions contained therein) on or prior to the Closing Date (other than modifications to such terms and conditions as are acceptable to Purchaser so long as such modifications would (x) not reasonably be expected to materially delay (taking into account the expected timing of the Marketing Period) or prevent the ability of Purchaser to consummate the transactions contemplated hereby or cause the amount of the Debt Financing, when added with the funds to be provided under the Equity Financing Commitment, to be less than an amount sufficient to consummate the Transaction and (y) otherwise be permitted under the restrictions on amendments and modifications otherwise set forth in this Section 6.10).  Purchaser shall, and shall cause its controlled Affiliates to, obtain the Equity Financing contemplated by the Equity Financing Commitment upon satisfaction or waiver of the conditions to Closing in Section 7.1 and Section 7.2 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing).  Purchaser shall keep Seller informed on a reasonably current basis of the status of its efforts to arrange the Financing (or Alternative Financing).  For the avoidance of doubt, Purchaser shall provide the Company copies of all amendments, modifications or supplements to the Debt Financing Commitments and any fee letter related to the Debt Financing Commitments (provided, that provisions in any amendment, modification or supplement to any fee letter, the fee amounts and the economic terms of market “flex” provisions that are customarily redacted in connection with transactions of this type may be redacted; provided that such redacted terms would not in any event adversely affect the availability, conditionality, enforceability or the aggregate amount of the Debt Financing) promptly upon execution thereof.  In the event any portion of the Debt Financing becomes unavailable in the amounts and on the conditions (including any “flex” provisions) contemplated in the Debt Financing Commitments for any reason (A) Purchaser shall promptly notify Seller in writing and (B) Purchaser shall use its reasonable best efforts to obtain, as promptly as practicable following the occurrence of such event, alternative financing from alternative financing sources (the “Alternative Financing”) in an amount, when added with the funds to be provided under the Equity Financing Commitment, sufficient to consummate the Transaction, which would (i) involve terms in material respects as favorable to Purchaser as are reasonably available in the debt markets for financing of the type set forth in the Debt Financing Commitments as of the date hereof (including any “flex” provisions applicable thereto), (ii) not involve any additional conditions to funding the Debt Financing that are not contained in the Debt Financing Commitments and (iii) not reasonably be expected to prevent, impede or delay the consummation of the Transaction. The Purchaser shall provide Seller, upon reasonable written request, such information as shall be reasonably necessary to allow Seller to monitor the progress of Purchaser’s efforts to arrange the Debt Financing.  Without limiting the generality of the foregoing, Purchaser shall promptly notify Seller in writing (A) if there exists any breach, default, rescission, repudiation, cancellation, expiration or termination by any party to the Financing Commitments or any definitive agreement related thereto (or any event or circumstance that, with or without notice, lapse of time or both, could reasonably be expected to give rise to any breach, default, rescission, repudiation, cancellation, expiration or termination) or (B) of the receipt by Purchaser of any written notice or other written communication from any Financing Source with respect to any actual, threatened or alleged material breach, default, rescission, repudiation, cancellation or termination by any party to the Financing Commitments or any definitive document with respect thereto.  Without the consent of the Company, the Purchaser shall not consent or agree to any amendment, replacement, supplement or modification to, or any waiver of any provision under, the Financing Commitment or the definitive agreements relation to the Financing if such amendment, replacement, supplement, modification or waiver (1) decreases the aggregate amount of the Financing to an amount that would be less than an amount that would be required to consummate the Transaction on the Closing Date, (2) imposes new or additional conditions to the receipt of the Financing, or otherwise expands, amends or modifies any of the conditions to the receipt of the Financing, in a manner that would reasonably be expected to prevent, impede or delay the consummation of the transactions contemplated by this Agreement, or (3) would be reasonably expected to adversely impact the ability of Purchaser to enforce its rights against the Financing Sources. Notwithstanding the foregoing, for the avoidance of doubt, Purchaser may amend, replace, supplement and/or modify the Debt Financing Commitments to (a) add lenders, lead arrangers, bookrunners, syndication agents or similar entities as parties thereto who had not executed the Debt Financing Commitments as of the date hereof, (b) amend titles, allocations and fee sharing arrangements with respect to existing and additional Financing Sources and (c) increase the amount of the Debt Financing.  Upon any amendment, supplement, modification, consent or waiver of or relating to the Financing Commitments, Purchaser shall promptly provide a copy thereof to Seller and, to the extent any such amendment, supplement or modification has been made in compliance with this Section 6.10(a), the term “Financing Commitments” shall mean the Financing Commitments as so amended, replaced, supplemented or modified, including any Alternative Financing.  Notwithstanding the foregoing, Purchaser acknowledges that this Agreement and the transactions contemplated hereby are not contingent on Purchaser’s ability to obtain the Debt Financing.

(b)          Prior to the Closing  (or, if earlier, the termination of this Agreement pursuant to Section 8.1), the Company shall use its reasonable best efforts to provide to Purchaser, and shall cause the Acquired Subsidiaries to use reasonable best efforts to provide to Purchaser, all cooperation reasonably requested by Purchaser that is necessary for financings of this type in connection with the Debt Financing (or Alternative Financing obtained in accordance with Section 6.10(a)), including using reasonable best efforts to take the following actions:

 

(i)          furnishing Purchaser as promptly as reasonably practicable (or in the case of clause (B) below, as promptly as reasonably practicable, but in no event more than fifteen (15) Business Days after the end of the relevant period) with (A) the Financing Information and other information regarding the Acquired Companies customarily included in marketing materials or offering documents for financings similar to the financings contemplated by the Debt Financing Commitments (including Rule 144A offerings of non-convertible debt securities), (B) customary “flash” or “recent development” revenue information (which may be provided in a reasonable range or estimate and may be provided on a  non-GAAP basis) for any fiscal quarter ending after the date hereof and prior to the Closing, and (C) to the extent in possession of the Acquired Companies, such other financial and other pertinent information pertaining to the Acquired Companies (it being understood that the Acquired Companies shall not be required to provide (x) financial statements other than those required pursuant to the definition of Financing Information or (y) any Excluded Information);

 

(ii)         upon reasonable notice, causing senior management (with appropriate seniority and expertise) of the Acquired Companies to participate in the marketing activities undertaken in connection with the marketing of the Debt Financing by participating in a reasonable number of meetings, presentations, due diligence sessions, drafting sessions, road shows, conference calls, lender meetings and other customary syndication activities with prospective lenders and debt investors in connection with the marketing of the Debt Financing at reasonable times;

 

(iii)        delivering customary authorization and representation letters (including customary representations (solely with respect to the Acquired Companies) with respect to the absence of material non-public information in the public-side version of documents distributed to potential lenders and/or investors and the absence of material misstatement(s) or omissions) and customary chief financial officer and similar certificates and certificates with respect to with respect to certain financial information in the offering documents not otherwise covered by “comfort” letters of the auditors;

 

(iv)         assisting with obtaining ratings from one or more rating agencies (including corporate ratings and ratings for the Debt Financing), including participation by senior management of the Acquired Companies in, and assistance with, the preparation of rating agency presentations and meetings with rating agencies;

 

(v)          assisting Purchaser in its preparation of any offering documents, bank information memoranda and similar documents; provided, that any such offering documents, memoranda and similar documents that includes disclosure and financial statements with respect to the Company shall only reflect the Company (following the Closing) and/or the Acquired Subsidiaries as the obligor(s);

 

(vi)        reasonably facilitating the pledging of collateral and delivery of financing agreements and related documents (including customary certificates) as may be reasonably requested by Purchaser or the Financing Sources (provided, that (A) none of such documents or certificates shall be executed and/or delivered except in connection with the Closing and (B) the effectiveness thereof shall be conditioned upon, or become operative after, the occurrence of the Closing) and cooperating with any collateral appraisals and field examinations as may be reasonably requested by Purchaser or the Financing Sources;

 

(vii)       taking all customary corporate actions, subject to the occurrence of the Closing, reasonably requested by Purchaser that are necessary or customary to permit the consummation of the Debt Financing, and to permit the proceeds thereof to be made available on the Closing Date to consummate the Transactions;

 

(viii)      requesting that its independent auditors provide customary assistance and cooperation with the Debt Financing, including by providing the Specified Auditor Assistance; and

 

(ix)        providing as promptly as reasonably practicable, but no less than four Business Days prior to the Closing Date such information and documentation regarding the Acquired Companies reasonably required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including (1) the USA Patriot Act and (2) a certification regarding beneficial ownership as required by 31 C.F.R. Section 1010.230 to any Financing Source that has requested such certification, in each case as reasonably requested in writing not less than nine Business Days prior to Closing.

 

Notwithstanding the foregoing, (w) nothing in this Section 6.10 shall require access or disclosure of information to the extent that the Company reasonably determines that such access or disclosure could result in the loss of attorney-client privilege, (x) nothing in this Section 6.10 shall require such cooperation to the extent it would materially or unreasonably interfere with the business or operations of the Acquired Companies, taken as a whole, (y) none of the Acquired Companies shall be required to pay any commitment or other fee or incur any other liability or obligation in connection with the Debt Financing contemplated by the Debt Financing Commitments, to bear any cost or expense or to pay any commitment or other similar fee or make any other payment or agree to provide any indemnity in connection with the Debt Financing or any of the foregoing prior to the Closing in each case other than costs, expense, fees or indemnities that are reimbursed by Purchaser under this Agreement and (z) nothing in this Section 6.10 shall require any action that would conflict with or violate any applicable Laws or any Material Contracts to which any of the Acquired Companies is a party.  For the avoidance of doubt, none of the Acquired Companies or their respective officers, directors (with respect to any Acquired Company) or employees shall be required to execute or enter into or perform any agreement with respect to the Debt Financing contemplated by the Debt Financing Commitments that is not contingent upon the Closing or that would be effective prior to the Closing (other than (x) the authorization and representation letters and certificates referred to in clause (iii) above and (y) “know-your-customer” and beneficial ownership information referred to in clause (ix) above).

 

(c)          The Company hereby consents to the use of its and the Acquired Subsidiaries’ logos in connection with the Debt Financing so long as such logos are used solely in a manner that is not intended or reasonably likely to harm, disparage or otherwise adversely affect in any material respect the Company or any of the Acquired Subsidiaries or the reputation or goodwill of the Company or any of the Acquired Subsidiaries.

 

(d)          Purchaser shall promptly, upon request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs (including reasonable outside attorneys’ fees and fees and expenses of the Company’s accounting firms engaged to assist in connection with the Financing, including performing additional requested procedures, reviewing any offering documents, participating in any meetings and providing any comfort letters) to the extent incurred by any of the Acquired Companies in connection with the cooperation of the Acquired Companies contemplated by this Section 6.10; provided, however, that Purchaser shall not be required to reimburse the Company for any costs and expenses incurred with respect to the preparation of financial statements, financial information or other materials not initially prepared in connection with the Debt Financing. Purchaser acknowledges and agrees that, except for obligations from and after the Closing that arise under the definitive agreements governing the Financing or closing certificates relating to the Financing, the Acquired Companies and their Representatives shall not have any personal liability to, any Person under any arrangement with respect to the Financing that Purchaser may request in connection with the transactions contemplated by this Agreement.  Purchaser shall indemnify and hold harmless the Acquired Companies and their respective Representatives from and against any and all losses suffered or incurred by them in connection with the arrangement of the Debt Financing and the performance of their respective obligations under this Section 6.10 (including any action taken in accordance with this Section 6.10) and any information utilized in connection therewith; provided, however, the foregoing shall not apply to the extent such losses are determined by a final non-appealable judgment of a court of competent jurisdiction to have resulted from the willful misconduct or gross negligence of the Acquired Companies or, as applicable, their respective Representatives.

 

Section 6.11        Termination of Affiliate Contracts and Intercompany Balances.

 

(a)          Immediately prior to the Closing, except for the Transaction Agreements to be entered into in connection with this Agreement or as set forth on Section 6.11(a) of the Company Disclosure Schedule, all arrangements, understandings or Contracts, including all obligations to provide goods, services or other benefits, between the Seller and its Affiliates (other than the Acquired Companies), on the one hand, and the Acquired Companies, on the other hand, shall automatically be terminated without further payment or performance and cease to have any further force and effect, such that no party thereto shall have any further obligations therefor or thereunder.

 

(b)          Prior to the Closing, all intercompany balances and accounts between the Seller, Seller Entities or any of their Affiliates (other than the Acquired Companies), on the one hand, and the Acquired Companies, on the other hand, shall be settled or otherwise eliminated in such a manner as shall not adversely affect any of the Acquired Companies such that no such amounts are owed or outstanding as of the Closing.  Seller shall be responsible for, and shall pay and indemnify Purchaser and the Acquired Companies from, any Taxes or withholding liability resulting from any such elimination.  Intercompany balances and accounts solely among any of the Acquired Companies shall not be affected by this provision.

 

Section 6.12        Preservation of Records.

(a)          Purchaser shall, and shall cause the Company to, preserve and keep the records held by them relating to the respective businesses of the Acquired Companies for a period of seven years following the Closing Date (or longer if required by applicable Law) and shall make such records (or copies) and reasonably appropriate personnel available, at reasonable times and upon reasonable advance notice, to Seller, its Affiliates and their respective Representatives as may be reasonably required by Seller in connection with any insurance claims by, legal proceedings or Tax audits against, governmental investigations of, or compliance with applicable Laws by, Seller or any of its Affiliates.

 

(b)          Seller shall, and shall cause its Affiliates to, preserve and keep any records held by them relating to the respective businesses of the Acquired Companies for a period of seven years following the Closing Date (or longer if required by applicable Law) and shall make such records (or copies) and reasonably appropriate personnel available, at reasonable times and upon reasonable advance notice, to Purchaser, its Affiliates and their respective Representatives as may be reasonably required by Purchaser in connection with any insurance claims by, legal proceedings or Tax audits against, governmental investigations of, or compliance with applicable Laws by, the Acquired Companies and the Company Business.

 

(c)          Purchaser agrees to cooperate, and use reasonable best efforts to cause its Affiliates and auditors to cooperate, in providing, upon Seller’s request at any time or from time to time, such historical financial information to the extent relating to the Company Business and any other information relating to the Company Business as may be reasonably necessary for Seller (as reasonably determined by Seller) to satisfy its filing obligations with the Securities and Exchange Commission under or pursuant to the Securities Exchange Act of 1934, as amended, including disclosure required to be made by Seller in any Form 10-K, 10-Q or 8-K or in any registration statement filed by Seller or its Affiliates or in any other offering document with respect to any offer or sale of securities by Seller or its Affiliates (registered or unregistered) under or pursuant to the Securities Act.  Purchaser shall use its reasonable best efforts to provide, and shall use its reasonable best efforts to cause its Affiliates and auditors to provide, such cooperation in accordance with the foregoing sentence of this Section 6.12(c) on a timeline as reasonably requested by Seller in accordance with any actions described in the preceding sentence.

 

(d)          Following the Closing, Purchaser and the Company shall, and shall cause their respective employees to, facilitate the monthly and/or quarterly close (for accounting purposes) of the month ending immediately prior to the Closing Date in a manner and scope in the consistent with Seller’s past practices, and which shall include, for the avoidance of doubt, all regular month (or quarter, as applicable) end close, reconciliation, reporting and control processes (including execution of management representation letters, as applicable) and on a timeline in accordance with Seller’s financial reporting calendar.

 

Section 6.13          Resignations. On the Closing Date, Seller shall cause all directors of the Acquired Companies (other than individuals who will continue to act as full time employees of the Acquired Companies or individuals who are service providers) to resign.

 

Section 6.14          Reorganization.

 

(a)          At or prior to the Closing (provided that, for the avoidance of doubt, the steps with respect to any Deferred Business may be completed after Closing), the Company and the Seller shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to complete the reorganization in accordance with the steps set forth in Exhibit D and to take such additional actions as may be reasonably necessary to transfer to the Acquired Companies the assets primarily related to, or used solely in connection with (or with respect to IT Assets, that is used exclusively in), the operation of the Company Business as conducted by Seller and its Affiliates prior to the Closing and that are not owned by one of the Acquired Companies as of the date hereof, including those assets that are listed or described on Section 6.14(a)(i) of the Company Disclosure Schedule (other than those Delayed-Transfer Assets or Deferred Businesses, that are unable to be transferred at or prior to Closing in accordance with this Agreement) (the “Reorganization”).  Following the date of this Agreement but prior to the Closing, upon prior written notice to Purchaser, Seller shall be permitted to amend Exhibit D to the extent necessary to implement the transactions contemplated by this Agreement and the other Transaction Agreements.  In furtherance of the foregoing, Seller and its Affiliates shall execute and deliver all documents, make all filings, arrange for and undertake all related actions that Seller and the Company determine to be necessary or appropriate to consummate the Reorganization (as amended pursuant to this Section 6.14).  Seller or one of its Affiliates (other than an Acquired Company) shall retain all liabilities of the kind associated with determining the Legacy IBNR Accrual, and, to the extent permitted by Law, no such liabilities will transfer to Purchaser or any of the Acquired Companies in connection with the transactions contemplated by this Agreement, including the Reorganization (and any such liabilities of the Acquired Companies shall be deemed to have been transferred to Seller as of the Adjustment Time).  From and after the Closing, Seller shall reimburse Purchaser and the Acquired Companies any amounts required to be paid with respect to (or otherwise indemnify and hold Purchaser and the Acquired Companies harmless from) any and all liabilities of the kind associated with determining the Legacy IBNR Accrual.

 

(b)          Notwithstanding anything to the contrary in this Section 6.14 or elsewhere in this Agreement, there shall be excluded from the transactions contemplated by this Agreement (including the Reorganization) any asset that would otherwise be required to be transferred to the Acquired Companies in the Reorganization pursuant to Section 6.14(a) which is not assignable or transferable without the consent, approval, exemption, waiver, authorization, filing, registration or notification of any Person other than Seller or any Subsidiary of Seller or Purchaser, to the extent that such consent shall not have been given prior to the Closing (the “Delayed-Transfer Assets”); provided, however, that each of Seller and Purchaser shall have the continuing obligation until twelve (12) months after the Closing to use their commercially reasonable efforts to obtain all necessary consents, approvals, exemptions, waivers, authorizations or make all necessary filings, registrations or notifications to the assignment or transfer of such Delayed-Transfer Asset; provided, further, that neither Seller nor any of its Affiliates or Subsidiaries (excluding, for the avoidance of doubt, the Acquired Companies), shall be required to compensate any third party, commence or participate in any proceeding or offer or grant any accommodation (financial or otherwise) to any third party to obtain any such third party consent or otherwise in connection with Seller’s and its Affiliates’ obligations under this Section 6.14(b). Upon obtaining the requisite third-party consents thereto, such Delayed-Transfer Assets, if otherwise includable in the transactions contemplated hereby, shall promptly be transferred and assigned hereunder to Purchaser or one of its Subsidiaries; provided, however, that all fees, costs and expenses incurred by any Seller, Purchaser or any of their respective Affiliates in connection with any such transfer or assignment shall be borne by Purchaser.  For the avoidance of doubt, no representation, warranty or covenant of Seller or the Company contained in the Transaction Agreements shall be breached or deemed breached, and no condition shall be deemed not satisfied, and neither Seller nor any of its Affiliates shall have any liability to Purchaser or its Affiliates arising out of or relating to (A) the failure to obtain any such third-party consent or (B) any proceeding commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any such third-party consent.

 

(c)          With respect to any Delayed-Transfer Asset that is not transferred or assigned to Purchaser or one of its Subsidiaries, in the Reorganization or otherwise at the Closing by reason of Section 6.14(a), after the Closing, until any requisite consent is obtained therefor and the same is transferred and assigned to Purchaser or one of its Subsidiaries, the parties shall cooperate with each other, upon written request of Purchaser, in endeavoring to obtain for Purchaser, an arrangement with respect thereto to provide Purchaser substantially comparable benefits therein.  Purchaser agrees to indemnify the Seller and its Affiliates in respect of all liabilities of the party providing such benefit in respect of any such arrangement, continuing operations and underlying lease, license, Contract, agreement or right.

 

Section 6.15        Retained Marks.  Purchaser hereby acknowledges that all right, title and interest in and to the Retained Marks are owned exclusively by Seller and its Affiliates (other than, after the Closing, the Acquired Companies) and that, except as expressly provided in this Section 6.15, Purchaser and its Affiliates (including, after the Closing, the Acquired Companies) shall have no right to use the Retained Marks after the Closing. Seller hereby grants to the Acquired Companies a limited, royalty-free, non-exclusive, non-assignable license to use the Retained Marks on (i) any existing stock of vehicles and other tangible materials bearing the Retained Marks as of the Closing Date and (ii) any stock of vehicles bearing the Retained Marks manufactured in the ordinary course of business consistent with past practice prior to the date on which the existing mold for such vehicles is replaced (each of (i) and (ii), the “Existing Stock”), solely in a manner consistent with past practice and customary “phase out” use. Purchaser shall cause the Acquired Companies to cease all use of the Retained Marks as promptly as reasonably possible.  Seller shall: (x) replace the mold for the vehicles as soon as reasonably practicable following the Closing Date and (y) only use the Retained Marks in accordance with this Section 6.15 and in a manner that is consistent with past practice.  To the extent that any Retained Marks include registrations or applications for Trademarks that consist of a combination of both (i) a Trademark used in the Company Business that is not in itself a Retained Mark, and (ii) a Retained Mark, then, (A) such mark will be a Retained Mark and (B) Seller shall cease to use such Trademark as promptly as reasonably possible following the Closing Date and shall allow any applications or registrations for such co-branded trademark to lapse.   Purchaser hereby agrees that Seller and its Affiliates shall have no responsibility or liability for claims by third parties arising out of or relating to the use by the Acquired Companies of the Retained Marks.

 

Section 6.16        Insurance Matters.

 

(a)          Effective as of the Closing Date, (i) Seller and its Affiliates will be entitled to terminate or cause its Subsidiaries to terminate all insurance coverage relating to the Acquired Companies and the current or former directors, officers and employees thereof under the general corporate policies of insurance, cancelable surety bonds and hold harmless agreements and (ii) Purchaser shall become solely responsible for all insurance coverage and related risk of loss with respect to the Acquired Companies and its current or former directors, officers and employees.

 

(b)          Notwithstanding Section 6.16(a), to the extent that (i) any insurance policies issued for the benefit of the Seller or its Affiliates (the “Seller’s Insurance Policies”) cover any loss, liability, claim, damage or expense relating to the Acquired Companies and relating to or arising out of occurrences on or prior to the Closing Date (“Pre-Closing Matters”) and (ii) the Seller’s Insurance Policies continue after the Closing to permit claims to be made thereunder with respect to Pre-Closing Matters, Seller shall cooperate and cause its Affiliates to cooperate with Purchaser in submitting claims with respect to Pre-Closing Matters on behalf of Purchaser under the Seller’s Insurance Policies; provided that Purchaser shall not make any such claims if, and to the extent that, such claims are covered by insurance policies held by Purchaser or its Affiliates. Purchaser shall reimburse, indemnify and hold Seller and its Affiliates harmless from all liabilities, costs and expenses (including all present or future premiums and retroactive or prospective premium adjustments, deductibles, self-insured retentions, legal and administrative costs, attorney’s fees, overhead and costs of compliance under Seller’s Insurance Policies) of any nature actually incurred by Seller or its Affiliates as a result of such claims made under the Seller’s Insurance Policies. Upon the incurrence or accrual of any such liability, cost or expense relating to claims made under the Seller’s Insurance Policies with respect to Pre-Closing Matters and upon receipt from Seller of a statement of the amount of such liabilities, costs and expenses in reasonable detail, from time to time, Purchaser shall make payment promptly to Seller or its Affiliates of the amount indicated in such statement.

 

Section 6.17        Tax Matters.

 

(a)          Purchaser, on the one hand, and Seller, on the other hand, and their respective Affiliates shall reasonably cooperate with one another in (i) the preparation of all Tax Returns for any Tax periods and (ii) the conduct of any audit or other Tax claim, in each case relating to the Acquired Companies.  Such cooperation shall include, but not be limited to, furnishing Tax Returns or such other information within such party’s possession requested by the other party as is reasonably requested by the other party and reasonably necessary in connection with the preparation of Tax Returns or the conduct of any audit or other Tax claim.  Purchaser agrees that it shall preserve and keep, or cause to be preserved and kept, all original books and records in respect of the Acquired Companies relating to any Taxes with respect to Tax periods (in whole or in part) ending on or before the Closing Date through the expiration of the applicable statute of limitations.

 

(b)          From and after the Closing (but subject to Section 6.17(q)), Seller shall indemnify Purchaser and the Acquired Companies, and hold each of them harmless against (i) any Taxes (including with respect to any inclusion pursuant to Section 951 or Section 951A of the Code) imposed on or with respect to the Acquired Companies or the Company Business for all taxable periods ending before the Closing Date and, with respect to any taxable period that begins on or before and ends after the day immediately preceding the Closing Date (a “Straddle Period”), for the portion thereof ending on the day immediately preceding the Closing Date, (ii) any and all Taxes of any member (other than an Acquired Company) of an affiliated, consolidated, combined, or unitary group of which any of the Acquired Companies (or any predecessor of any of the foregoing) is or was a member on or prior to the Closing Date, pursuant to Treas. Reg. §1.1502-6 or any analogous or similar state, local, or non-U.S. law or regulation, (iii) any Taxes arising from the Reorganization, any of the transactions contemplated by Section 6.11, or the transfer of any Delayed Transfer Assets, and (iv) all fees, costs and expenses (including the fees and expenses of any attorneys, accountants and experts) incurred in connection with the determination or resolution of any Taxes that are the responsibility of Seller under this Section 6.17(b).  Notwithstanding anything herein to the contrary, the Tax indemnity provided under this Section 6.17(b) shall not cover Tax liabilities (x) resulting from any transaction of the Acquired Companies outside the ordinary course of business that occurs on or after the Closing, (y) resulting from any action taken on or after the Closing by Purchaser or any of its Affiliates, or (z) taken into account as a liability in determining the Final Purchase Price.

(c)          From and after the Closing (including the portion of the Straddle Period beginning on or after the Closing Date), Purchaser and the Acquired Companies shall indemnify Seller and its Affiliates and hold each of them harmless against (i) any Taxes imposed on or with respect to the Acquired Companies or the Company Business for all taxable periods other than those which are Seller’s responsibility pursuant to Section 6.17(b) and (ii) all fees, costs and expenses (including the fees and expenses of any attorneys, accountants and experts) incurred by Seller in connection with the determination or resolution of any Taxes that are the responsibility of Purchaser and the Acquired Companies under this Section 6.17(c).

 

(d)          Payment by the indemnitor of any amount due under Section 6.17(b) or Section 6.17(c) shall be made within thirty (30) Business Days following written notice by the indemnitee that payment of such amounts to the appropriate Governmental Entity is due; provided that the indemnitor shall not be required to make any payment earlier than five (5) Business Days before it is due.  In the case of a Tax that is contested, payment of the Tax to the appropriate Governmental Entity shall not be considered to be due earlier than the date a final determination to such effect is made by the appropriate Governmental Entity or court.

 

(e)          Notwithstanding any provision in this Agreement to the contrary, the obligations of a party to indemnify and hold harmless another party pursuant to Section 6.17(b) or Section 6.17(c) shall terminate at the close of business on the 30th day following the expiration of the applicable statute of limitations with respect to the Tax liabilities in question; provided, however, that (i) the foregoing is subject to Section 6.17(q), and (ii) with respect to any claim for indemnification asserted in writing prior to such date (or, if applicable, such earlier date as provided in Section 6.17(q)), such obligation to indemnify shall remain in effect until such claim is satisfied or until is otherwise resolved.

 

(f)          Any disputes between the parties with respect to the Tax matters in Section 6.17(b) or Section 6.17(c) shall be resolved by the Independent Arbitrator, whose fees and expenses shall be shared in accordance with Section 3.3(d).

 

(g)          For purposes of Section 6.17(b) or Section 6.17(c), the amount of Taxes allocable to the portion of the Straddle Period ending on the day immediately preceding the Closing Date shall be determined as if such taxable period ended as of the close of business on the day immediately preceding the Closing Date.

 

(h)          Any payments made pursuant to Section 6.17(b) or Section 6.17(c) shall be treated for all Tax and accounting purposes as an adjustment to the Purchase Price except to the extent otherwise required by applicable Law.

 

(i)          If a Tax claim, audit, examination, notice of deficiency or other adjustment, assessment or redetermination shall be made or threatened against Purchaser or any of the Acquired Companies, or against Seller or any of its Affiliates, which, if successful, would result in an indemnity payment pursuant to Section 6.17(b) or Section 6.17(c) (a “Tax Claim”), the indemnified party shall promptly notify the indemnifying party in writing of such Tax Claim stating the nature and basis of such Tax Claim and the amount thereof, to the extent known by the indemnified party.  If notice of a Tax Claim is not given to the indemnifying party within a sufficient period of time to allow the indemnifying party to effectively contest such Tax Claim, or in reasonable detail to apprise the indemnifying party of the nature of the Tax Claim, in each case taking into account the facts and circumstances with respect to such Tax Claim, the indemnifying party shall not be liable to the indemnified party or any of its Affiliates to the extent that the indemnified party’s ability to effectively contest such Tax Claim is prejudiced as a result thereof.

 

(j)          With respect to any Tax Claim that relates to any Income Taxes for which Seller would be obligated to indemnify Purchaser and the Acquired Companies pursuant to Section 6.17(b), Seller shall have the right to control, at its expense, all proceedings taken in connection with such Tax Claim (including selection of counsel), but shall not, without the prior written approval of Purchaser (not to be unreasonably withheld, conditioned or delayed), agree or consent to compromise or settle, either administratively or after the commencement of litigation, any issue or claim arising in such proceeding, or otherwise agree or consent to any Tax liability, to the extent that any such compromise, settlement, consent or agreement may increase the Tax liability of any Acquired Company against which such Acquired Company is not indemnified by Seller.  Without limiting the foregoing, Seller may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any Governmental Entity with respect thereto and may, in its sole discretion, either pay the Tax claimed and sue for a refund where applicable Law permits such refund suits or contest the Tax Claim in any permissible manner.

 

(k)          With respect to any Tax Claim that relates to any non-Income Taxes for which Seller would be obligated to indemnity Purchaser and the Acquired Companies pursuant to Section 6.17(b), Purchaser shall control all proceedings taken in connection with such Tax Claim (including selection of counsel), and Seller’s indemnification obligation with respect thereto shall include the expenses of such proceedings (and counsel), subject to the limitation on Seller’s total indemnification obligation for non-Income Taxes set forth in Section 6.17(q).   Purchaser may agree or consent to compromise or settle, either administratively or after the commencement of litigation, any such Tax Claim relating to non-Income Taxes without Seller’s consent and may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any Governmental Entity with respect thereto and may, in its sole discretion, either pay the non-Income Tax claimed and sue for a refund where applicable Law permits such refund suits or contest the non-Income Tax Claim in any permissible manner.  Purchaser shall keep the Seller reasonably informed of any material developments with respect to any Tax Claim to which this Section 6.17(k) applies and shall reasonably cooperate to respond to any information requests made by Seller.

 

(l)          With respect to any Tax Claim that relates to a Tax for which Purchaser or any Acquired Company would be obligated to indemnify Seller and its Affiliates pursuant to Section 6.17(c), Purchaser shall have the right to control at its expense all proceedings taken in connection with such Tax Claim (including selection of counsel),  but shall not, without the prior written approval of Seller (not to be unreasonably withheld, conditioned or delayed), agree or consent to compromise or settle, either administratively or after the commencement of litigation, any issue or claim arising in such proceeding, or otherwise agree or consent to any Tax liability, to the extent that any such compromise, settlement, consent or agreement may increase the Tax liability of Seller or any of its Affiliates.  Without limiting the foregoing, Purchaser may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any Governmental Entity with respect thereto and may, in its sole discretion, either pay the Tax claimed and sue for a refund where applicable Law permits such refund suits or contest the Tax Claim in any permissible manner.

 

(m)          Except as required by applicable Law, Purchaser shall not, and shall not permit any of its Affiliates (including, after the Closing, the Acquired Companies) to, (i) make any Tax election with respect to, or that has retroactive effect to, any taxable period (or portion thereof) ending before the Closing Date, (ii) voluntarily approach any Governmental Entity in writing regarding any Taxes or Tax Returns of or with respect to the Acquired Companies relating to any Tax period (or portions thereof) ending before the Closing Date, (iii) take any action on the Closing Date following the Closing outside the ordinary course of business (other than as expressly contemplated by this Agreement), (iv) carryback any Tax items from any taxable period (or portion thereof) beginning on or after the Closing Date to any taxable period (or portion thereof) ending before the Closing Date, or (v) extend any statute of limitations with respect to any Tax period (or portions thereof) ending before the Closing Date, in each case without the Seller’s prior written consent.

 

(n)          The parties agree that an election under Section 338(g) of the Code shall not be available with respect to the consummation of the transactions contemplated by this Agreement.

 

(o)          Purchaser and the Acquired Companies shall promptly remit to Seller any refund of Taxes of Acquired Companies or with respect to the Company Business actually received (or any credit or offset against Taxes in lieu of such refund) with respect to Taxes for which the Seller would be responsible pursuant to this Agreement (including, for the avoidance of doubt, the portion of any non-Income Taxes for which Seller would be responsible taking into account Section 6.17(q)), except to the extent that such refund was reflected as an asset in determining the Final Purchase Price; provided, however, that (i) Purchaser and the Acquired Companies shall have no obligation to remit to Seller any refund of non-Income Taxes received after the third anniversary of the Closing Date, and (ii) in no event shall the total amount of refunds for non-Income Taxes exceed $6,172,500.

 

(p)          Payment by the indemnitor of any amount due under Section 6.17(b) or Section 6.17(c) shall be reduced to take account of any Tax benefit actually realized by the indemnified party arising from such payment (determined on a with and without basis)

 

(q)          Notwithstanding any other provision of this Agreement, (i) Seller shall have no obligation to indemnify Purchaser or any of the Acquired Companies against any non-Income Taxes to the extent the claim for such indemnification has not been asserted in writing prior to the third anniversary of the Closing Date (but to the extent so asserted, such indemnification obligation shall remain in effect until satisfied or until such claim is otherwise resolved), and (ii) with respect to any permitted claim by Purchaser or any of the Acquired Companies with respect to non-Income Taxes, Seller shall be responsible for indemnifying Purchaser and the Acquired Companies for only one-half of such non-Income Taxes and one-half of any items specified in clause (iv) of Section 6.17(b) with respect to such non-Income Taxes, up to a cap on Seller’s aggregate liability for such claims of $6,172,500.

 

(r)          The parties shall, and shall cause their Affiliates to, cooperate and take all commercially reasonable actions as may be necessary to elect, or cause an election to be made, under Treas. Reg. §1.245A-5(e)(3)(i) to close the taxable year of Golf Academies Limited as of the Closing Date.

 

Section 6.18        Release of the Acquired Companies as Guarantors; Debt Release Letters.

 

(a)          Seller shall, or shall cause its Affiliates to, on or prior to the Closing, deliver or cause the delivery of an executed Debt Release Letter (or similar documents) (a draft of which shall be delivered to Purchaser no later than two (2) Business Days prior to the Closing) and such other documents relating to lien releases (upon consummation of the Transaction) customarily delivered in connection therewith as reasonably requested by Purchaser.

 

(b)          Purchaser acknowledges that Seller and its Affiliates (other than the Acquired Companies) have entered into other arrangements in which guarantees, letters of credit, bonds or similar arrangements were issued by Seller or its Affiliates to support liabilities and obligations of the Acquired Companies, all of which are set forth in Section 6.18(b) of the Company Disclosure Schedule (the “Seller Guarantees”).  Purchaser agrees that it shall use its commercially reasonable efforts to arrange for itself or one of its controlled Affiliates to be substituted as the primary obligor thereon as of the Closing through a novation, an assumption, accession, acknowledgement or similar agreement with the beneficiary of the applicable Seller Guarantee.  Unless any such replacement arrangements have been arranged, Seller shall not, and shall not permit any of its Affiliates, to terminate any Seller Guarantee without Purchaser’s consent; provided, however, that neither Seller nor any of its Affiliates shall be required to renew or extend any Seller Guarantee beyond the date on which it would otherwise expire; and provided further, that Purchaser shall indemnify and hold Seller and its Affiliates harmless from any liabilities incurred under any Seller Guarantee.

 

Section 6.19        Certain Consents; Shared Contracts.

 

(a)          Purchaser acknowledges and agrees that certain consents to the transactions contemplated hereby may be required from Governmental Entities or parties to Contracts or other agreements to which an Acquired Company or Seller Entity is a party and that such consents have not been obtained as of the date hereof and may not be obtained prior to the Closing. Subject to compliance with Section 6.7 and Section 6.9, Purchaser acknowledges and agrees, on behalf of itself, that (i) neither the Company nor Seller will have any liability whatsoever to Purchaser (and Purchaser will not be entitled to assert any claims) arising out of or relating to the failure to obtain any consents that may have been or may be required in connection with the transactions contemplated hereby or because of the default, acceleration or termination of or loss of right under any such Contract or other agreement as a result of the transactions contemplated hereby and failure to obtain any such consent, and (ii) no condition of Seller will be deemed not to be satisfied as a result of the failure to obtain any such consent or as a result of any such default, acceleration or termination or loss of right or any action commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any such consent or any such default, acceleration or termination or loss of right.

 

(b)          The Acquired Companies are either parties or beneficiaries which relate in part to both (i) the operations or conduct of the Company Business and (ii) the operations or conduct of Seller-Retained Business (collectively, such Contracts (other than Contracts with respect to IT Assets that are addressed pursuant to the Transaction Services Agreement) that are material to the operations or conduct of the Company Business, which are set forth on Section 6.19(b) of the Company Disclosure Schedule, the “Shared Contracts”).  Seller, Purchaser, the Company shall, and shall cause their respective Affiliates to, cooperate with each other and the applicable third parties and use their respective commercially reasonable efforts prior to the Closing and for a period of nine (9) months following the Closing Date (A) to cause the Shared Contracts to be apportioned (including by obtaining the consent of such counterparty or any Governmental Entity to the extent required in connection therewith to enter into a new contract or amendment, or splitting, mirroring or assigning in relevant part such Shared Contract; provided, that, for the avoidance of doubt, in no event shall any Person be required to apportion any such Shared Contract that cannot be so apportioned by its terms without obtaining any such consent), effective as of the Adjustment Time, between the Acquired Companies, on the one hand, and Seller and its Subsidiaries, excluding the Acquired Companies, on the other hand, pursuant to which an Acquired Company will assume all of the rights and obligations under such Shared Contract that relate to the Company Business, on the one hand, and Seller and its Subsidiaries, excluding the Acquired Companies, will assume all of the rights and obligations under such Shared Contract that relate to Seller-Retained Business, on the other hand; and (B) to cause the applicable counterparty to release the Acquired Companies, as applicable, from the obligations of Seller and its Subsidiaries (excluding the Acquired Companies) arising after the Closing Date under the portion of the Shared Contract apportioned to Seller and its Subsidiaries (excluding the Acquired Companies) and to cause the applicable counterparty to release Seller and its Subsidiaries (excluding the Acquired Companies) from the obligations of the Acquired Companies arising after the Closing Date under the portion of the Shared Contract apportioned to the Acquired Companies.  If as of the Closing, any Shared Contract cannot be so apportioned in connection with the foregoing sentence, then until the earlier of such time as such Shared Contract can be so apportioned and nine (9) months following the Closing Date, Seller and Purchaser shall cooperate with each other to establish an agency type or other similar arrangement reasonably satisfactory to Seller and Purchaser intended to both (x) provide the Purchaser, to the fullest extent practicable under such Shared Contract, the claims, rights and benefits of those parts that relate to the Company Business and Seller, to the fullest extent practicable under such Shared Contract, the claims, rights and benefits of those parts that relate to the Seller-Retained Business and (y) cause Purchaser or Seller, as applicable, to bear the costs and liabilities associated therewith from and after the Closing in accordance with this Agreement (including by means of any subcontracting, sublicensing or subleasing arrangement).  In furtherance of the foregoing, Purchaser will promptly pay, perform or discharge when due any liability (including any liability for Taxes) arising thereunder after the Closing Date that relate to the Company Business and Seller will promptly pay, perform or discharge when due any liability (including any liability for Taxes) arising thereunder after the Closing Date that relate to the Seller-Retained Business.

 

(c)          From and after the Closing, (i) Purchaser and the Company shall not, and shall direct their respective Subsidiaries not to, extend the term or otherwise amend the terms of any Shared Contract in a manner that would adversely affect Seller or any of its Subsidiaries or the Seller-Retained Business without the Seller’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed) and (ii) Seller and its Subsidiaries shall not extend the term or otherwise amend the terms of any Shared Contract in a manner that would adversely affect Purchaser, the Acquired Companies or the Company Business without Purchaser’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

 

(d)          Notwithstanding anything in this Agreement to the contrary, neither Seller nor Purchaser, nor any of their respective Affiliates shall be required to pay compensation to any third party, commence or participate in any proceeding or offer or grant any accommodation (financial or otherwise,) to any third party in connection with the actions contemplated by this Section 6.19

 

Section 6.20        Wrong Pockets.

 

(a)          To the extent that it is determined following the Closing that any right, title or interest to any asset, property or right is held by Purchaser or any of its Affiliates that should have been a right, asset or property of Seller or one of its Affiliates under the terms and principles set forth in this Agreement, then, (i) from and after the Closing, such asset, property or right shall be deemed to have been held in trust for the benefit of and on behalf of Seller and its Affiliates, and (ii) Purchaser shall, and shall cause its applicable Affiliate to, assign, convey or as promptly as practicable transfer any such asset, property or right to Seller or one of its Affiliates (as Seller may designate) without additional consideration or cost being paid or incurred by Seller, in each case, pursuant to an instrument of transfer reasonably satisfactory to Seller.

 

(b)          To the extent that it is determined following the Closing that any right, title or interest to any asset, property or right is held by Seller or any of its Affiliates that should have been a right, asset or property of Purchaser or one of its Affiliates under the terms and principles set forth in this Agreement, then (i) from and after the Closing, such asset, property or right shall be deemed to have been held in trust for the benefit of and on behalf of Purchaser and its Affiliates, and (ii) Seller shall, and shall cause its applicable Affiliate to, assign, convey or as promptly as practicable transfer any such asset, property or right to Purchaser or one of its Affiliates (as Purchaser may designate) without additional consideration or cost being paid or incurred by Purchaser, in each case, pursuant to an instrument of transfer reasonably satisfactory to Purchaser.

 

(c)          Except as otherwise provided in this Agreement or any Transaction Agreement, following the Closing, (i) if any payments due with respect to the Company Business that should have been sent to Purchaser or the Acquired Companies are paid to Seller or any of its Affiliates, Seller shall, or shall cause its applicable Affiliate to, promptly remit by wire or draft such payment to an account designated in writing by Purchaser (including promptly forwarding corresponding invoices or similar documentation to Purchaser or its designee) and (ii) if any payments due with respect to the Seller-Retained Business that should have been sent to Seller or any of its Affiliates are paid to Purchaser or the Company, any of their respective Subsidiaries or Affiliates, Purchaser shall, or shall cause its Affiliates to, promptly remit by wire or draft such payment to an account designated in writing by Seller (including promptly forwarding corresponding invoices or similar documentation to Seller or its designee).

 

Section 6.21          Deferred Closing.

(a)          If all of the conditions to Closing specified in Article VII are satisfied or have been waived (other than those which, by their nature, are to be satisfied by action taken at the Closing, but subject such satisfaction or waiver of such conditions at the Closing), the parties shall not at the Closing effect the transfer of the Company Business in Ireland, China or India if (i) if the steps relating thereto set forth in Exhibit D have not been completed at such time despite the Seller using its reasonable best efforts to do so or (ii) such transfer would give rise to a material violation of any Law that has the effect of prohibiting such transfer or making such transfer illegal (each such portion of the Company Business that is not transferred at Closing, a “Deferred Business”) but, the Closing shall nevertheless occur with respect to the Company Business other than any Deferred Business and, from and after the Closing, the parties shall use reasonable best efforts to cause such material violation of such Law in such jurisdiction to cease to exist with respect to such transfer as promptly as practicable after the Closing Date, and immediately following such time as the transfer of the applicable Deferred Business can be consummated without giving rise to a material violation of such Law, such transfer of the applicable Deferred Business shall be consummated.  The parties will act in good faith to minimize the costs of the transfer of the Deferred Business. For the avoidance of doubt, the Estimated Purchase Price paid by Purchaser at the Closing shall not be reduced or otherwise adjusted in connection with the delayed transfer of a Deferred Business; provided, that if Seller provides Purchaser with at least ten (10) Business Days prior written notice, Purchaser shall deposit the portion of the Estimated Purchase Price allocable to such Deferred Business into an escrow account (with an escrow agent and pursuant to an escrow agreement as mutually agreed by Purchaser and Seller) which shall be released to Seller (or its designee) in connection with the closing of such Deferred Business promptly following such Closing.

 

(b)          Prior to the Closing, in connection with the matters contemplated by Section 6.21(a), Seller (or its Subsidiaries) and Purchaser shall prepare and negotiate in good faith, to enter into on or prior to the Closing, such supplemental agreements as are reasonably necessary to place the parties and their Affiliates in the same financial position with respect to the Deferred Business as would have obtained if the Deferred Business were transferred at the Closing; provided that the execution and delivery of such agreements shall not be a condition to the Closing.

 

Section 6.22          R&W Insurance Policy. Purchaser has obtained a conditional binder to a representations and warranties insurance policy in connection with this Agreement (the “R&W Insurance Policy”).  Purchaser shall take all actions necessary to complete the applicable conditions in the conditional binder (other than the condition that the Closing has occurred) to the R&W Insurance Policy within the times set forth therein to maintain the R&W Insurance Policy in full force and effect.  Following the final issuance of the R&W Insurance Policy, Purchaser agrees to use reasonable best efforts to keep the R&W Insurance Policy in full force and effect for the policy period set forth therein.  Upon its final issuance, Purchaser shall deliver the R&W Insurance Policy to the Seller.  The parties acknowledge that Purchaser obtaining the R&W Insurance Policy is a material inducement to Seller entering into the transactions contemplated by this Agreement, and Seller is relying on Purchaser’s covenants and obligations set forth in this Section 6.22.  The R&W Insurance Policy shall include a provision whereby the insurer expressly waives, and irrevocably agrees, except in the case of actual fraud, not to pursue, directly or indirectly, any subrogation rights against Seller or any of its Affiliates, or any former shareholders, managers, members, directors, officers, employees, agents or representatives of any of the foregoing with respect to any claim made by any insured thereunder, and such Persons shall be express third party beneficiaries of such provision. In addition, the R&W Insurance Policy, including the subrogation provision, may not be amended or waived by Purchaser in any manner that is adverse to Seller or any of its Affiliates without Seller’s prior written consent.

 

Section 6.23        Restrictive Covenants.

 

(a)          During the period commencing on the Closing Date and ending on the fifth anniversary of the Closing Date, Seller shall not, directly or indirectly, including through any Affiliate or other Person controlled by Seller, (i) engage in a Competitive Business or (ii) induce or encourage any customer or, or supplier to, the Company Business to cease doing business with, or to reduce the amount of business that such customer or supplier conducts with, the Company Business; provided, however, that the foregoing shall not prohibit Seller or any of its Affiliates from acquiring (and after such acquisition, owning) (i) any Person, if less than twenty percent (20%) of the gross revenues and income of such Person (based on such Person’s latest annual audited consolidated financial statements) are related to or were derived from a Competitive Business, (ii) securities representing less than five percent (5%) of the outstanding voting power of any Person held as a passive investment, or (iii) any equity interest in any Person through any employee benefit plan of Seller or any of its Affiliates. 

 

(b)          During the period commencing on the Closing Date and ending on the second anniversary of the Closing Date, Seller shall not, directly or indirectly, including through any Affiliate or other Person controlled by Seller, (i) solicit for employment (whether as an employee, consultant or otherwise), or offer to hire any Company Employee, (ii) encourage any Company Employee to terminate his or her employment with the Company Business, or (iii) hire, engage or enter into any employment or consulting agreement or arrangement with, any senior management level Company Employee; provided, however, that the foregoing shall not prohibit (x) general employment solicitations through advertising, a professional recruiter or an electronic listing which is not targeted at Company Employees, (y) hiring any person other than a senior management level Company Employee who responds to a solicitation permitted under the foregoing clause (x) or (z) any action described in clauses (i) and (iii) above with respect to (A) any person whose employment has been terminated by an Acquired Company prior to such action being taken, (B) any person who has resigned as an employee of an Acquired Company under circumstances that would customarily constitute resignation for good reason or constructive termination, or (C) any other person who resigned as an employee of an Acquired Company at least six (6) months prior to such action being taken.

 

(c)          The parties mutually agree that this Section 6.23 is reasonable and necessary to protect and preserve Purchaser’s legitimate business interests and the value of the goodwill in the Company Business being acquired by Purchaser hereunder.

 

(d)          If a court or tribunal of competent jurisdiction determines that any term or provision contained in this Section 6.23  is invalid or unenforceable under applicable Law, then the parties agree that the court or tribunal will have the power (but without affecting the right of Purchaser to enforce this Section 6.23 in any jurisdiction other than such court’s or tribunal’s jurisdiction) to reduce the scope, duration or geographic area of 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.  To the extent they may effectively do so under applicable Law, Purchaser and Seller hereby waive on behalf of itself and on behalf of its successors, any provision of Law which renders any provision of this Section 6.23 invalid, void or unenforceable in any respect.

 

(e)          Seller acknowledges and agrees that monetary damages or other remedies at law for any breach of the requirements of this Section 6.23 would be inadequate, and agrees and consents that, without intending to limit any additional remedies that may be available, temporary and permanent injunctive and other equitable relief may be granted without proof of actual damage or inadequacy of legal remedy, in any proceeding which may be brought to enforce any of the provisions of this Section 6.23..

 

Section 6.24        Formation of the Other Purchased Entities. As soon as practicable after the date hereof, Seller shall (i) form the Other Purchased Entities as described (i.e., the kind of legal entity) and in the jurisdictions set forth in Exhibit D and (ii) deliver or make available to Purchaser a true, complete and correct copy of the organizational and governing documents for each Other Purchased Entity.

 

 

 

Section 7.1          Conditions to Obligations of Each Party.  The respective obligations of Purchaser and Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment on the Closing Date of each of the following conditions:

 

(a)          there shall not be any Law in effect making illegal the consummation of the transactions contemplated by this Agreement, and there shall not be any Governmental Order in effect prohibiting the consummation of the transactions contemplated by this Agreement;

 

(b)          (i) any required waiting periods (including any extension thereof) applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have terminated or expired, and (ii) all consents required under the Competition Laws of the jurisdictions set forth on Section 7.1(b) of the Company Disclosure Schedule shall have been obtained; and

 

Section 7.2          Additional Conditions to Obligations of Purchaser.  The obligations of Purchaser to consummate the transactions contemplated by this Agreement are subject to the fulfillment, on the Closing Date, of each of the following conditions (any or all of which may be waived by Purchaser in whole or in part in its sole discretion):

 

(a)          (i) The representations and warranties of the Company and Seller set forth in Section 4.1, Section 4.2(a), Section 4.2(b), Section 4.2(c), Section 4.3 and Section 4.16 shall be true and correct in all material respects as of the Closing Date as though made as of the Closing Date (or, in the case of representations and warranties that address matters only as of a particular date, as of such date) and (ii) all other representations and warranties of the Company and Seller contained in Article IV shall be true and correct (without (other than in the case of the representation contained in Section 4.7(ii)) giving effect to any materiality or “Business Material Adverse Effect” qualifications set forth therein) as of the Closing Date as though made as of the Closing Date (or, in the case of representations and warranties that address matters only as of a particular date, as of such date), except, in the case of this clause (ii), where the failure of such representations or warranties to be true and correct has not had, and would not be reasonably expected to have, a Business Material Adverse Effect;

 

(b)          The Company and Seller shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by the Company or Seller, as the case may be, on or prior to the Closing Date;

 

(c)          Purchaser shall have received a certificate of an executive officer of the Company and Seller to the effect that, to the best of his or her knowledge, the conditions set forth in subsections (a) and (b) of this Section 7.2 have been satisfied with respect to the matters pertaining to the Company and Seller, respectively; and

 

(d)          No change or event has occurred that has had, or that would reasonably be expected to have, individually or in the aggregate with other such changes or events, a Business Material Adverse Effect.

 

(e)          The Reorganization shall have been completed in all material respects in accordance with Section 6.14 with respect to step 1 of Exhibit D.

 

Section 7.3          Additional Conditions to Obligations of Seller.  The obligations of Seller to consummate the transactions contemplated hereby are subject to the fulfillment, on the Closing Date, of each of the following conditions (any or all of which may be waived by Seller in whole or in part in its sole discretion):

(a)          (i) The representations and warranties of Purchaser set forth in Section 5.1, Section 5.2 and Section 5.5 shall be true and correct in all material respects as of the Closing Date as though made as of the Closing Date (or, in the case of representations and warranties that address matters only as of a particular date, as of such date) and (ii) all other representations and warranties of Purchaser contained in Article V shall be true and correct (without giving effect to any materiality qualifications set forth therein) as of the Closing Date as though made as of the Closing Date (or, in the case of representations and warranties that address matters only as of a particular date, as of such date), except, in the case of this clause (ii), where the failure of such representations or warranties to be true and correct would not reasonably be expected to materially impair or delay Purchaser’s ability to perform its respective obligations under this Agreement and the other Transaction Agreements or consummate the transactions contemplated hereby or thereby;

 

(b)          Purchaser shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by Purchaser on or prior to the Closing Date; and

 

(c)          The Company shall have received a certificate of an executive officer of Purchaser to the effect that, to the best of his knowledge, the conditions set forth in subsections (a) and (b) of this Section 7.3 have been satisfied.

 

 

 

Section 8.1          Termination of Agreement.  This Agreement may be terminated at any time prior to the Closing Date as follows:

 

(a)          by mutual written consent of Seller and Purchaser;

 

(b)          at the election of Seller or Purchaser after October 1, 2021 (the “Outside Date”), if the Closing shall not have occurred by 5:00 p.m. New York time on such date; provided, however, that neither Seller nor Purchaser may terminate this Agreement pursuant to this Section 8.1(b) if it is in material breach of any of its obligations hereunder and such material breach causes, or results in, either (i) the failure to satisfy the conditions to the obligations of the terminating party set forth in Article VII prior to the Outside Date, or (ii) the failure of the Closing to have occurred prior to the Outside Date; provided, further, that neither Seller nor Purchaser shall have the right to terminate this Agreement pursuant to this Section 8.1(b) in the event the other party has initiated proceedings to specifically enforce this Agreement while such proceedings are still pending;

 

(c)          by Seller or Purchaser if there shall be in effect a final, nonappealable Governmental Order of a Governmental Entity having competent jurisdiction over the Company Business (other than any portion thereof that is not material) prohibiting the consummation of the transactions contemplated by this Agreement; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(c) shall not be available to the party seeking to terminate if such party is then in breach of any of its representations, warranties, covenants or other agreements hereunder that would result in a failure of a condition set forth in Article VII, as applicable;

 

(d)          by Purchaser if (i) Purchaser is not in material breach of any of its obligations hereunder and (ii) Seller or the Company is in material breach of any of its respective representations, warranties or obligations hereunder that would render any condition set forth in Section 7.2(a) or Section 7.2(b) not to be satisfied, and such breach is either (A) not capable of being cured prior to the Outside Date or (B) if curable, is not cured within the earlier of (x) twenty Business Days after the giving of written notice by Purchaser to Seller and (y) two Business Days prior to the Outside Date;

 

(e)          by Seller if (i) (A) Purchaser fails to complete the Transaction within two Business Days after the date when it was required to pursuant to and in accordance with Section 2.2 and (B) Seller has confirmed to Purchaser in writing that it stands ready, willing and able to consummate the Transaction or (ii) (A) Seller is not in material breach of any of its obligations hereunder and (B) Purchaser is in material breach of any of its representations, warranties or obligations hereunder that would render any condition set forth in Section 7.3(a) or Section 7.3(b) not to be satisfied, and, in the case of this clause (ii) only, such breach is either (A) not capable of being cured prior to the Outside Date or (B) if curable, is not cured within the earlier of (x) twenty Business Days after the giving of written notice by Seller to Purchaser and (y) two Business Days prior to the Outside Date;

 

Section 8.2          Procedure Upon Termination.  In the event of termination and abandonment by Seller or Purchaser, or both, pursuant to Section 8.1, written notice thereof specifying the relevant provision under which termination is made shall be given to the other party or parties, and the transactions contemplated by this Agreement shall be abandoned, without further action by any of Seller, the Company or Purchaser.

 

Section 8.3          Effect of Termination.

 

(a)          In the event that this Agreement is validly terminated in accordance with Section 8.1, then each of the parties shall be relieved of its duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to Seller or Purchaser; provided, however, that subject to the terms of this Section 8.3, (i) no such termination shall (A) restrict the availability of specific performance, if any, set forth in Section 10.13 with respect to surviving obligations that are to be performed following such termination or (B) relieve any party hereto from liability for damages resulting from any Willful Breach and (ii) the provisions of Section 6.4, Section 6.5, Section 6.10(d), this Article VIII, Section 9.1 and Article X shall remain in full force and effect and survive any termination of this Agreement in accordance with its terms.  For purposes of this Section 8.3, the term “Willful Breach” means a party’s knowing and intentional material breach of any of its representations or warranties as set forth in this Agreement, or such party’s material breach of any of its covenants or other agreements set forth in this Agreement, which material breach constitutes, or is a consequence of, a purposeful act or failure to act by such party with the knowledge that the taking of such act or failure to take such act would cause a material breach of this Agreement.  Notwithstanding the foregoing, a failure by Purchaser to close in accordance with this Agreement when they are obligated to do so shall be deemed to be a Willful Breach.

 

(b)          In the event that this Agreement is validly terminated (i) by either the Seller or Purchaser pursuant to Section 8.1(b) at a time when Seller could have terminated this Agreement pursuant to Section 8.1(e)(i) or Section 8.1(e)(ii) or (ii) by Seller pursuant to Section 8.1(e)(i) or Section 8.1(e)(ii), Purchaser shall pay to Seller (or its designee) a fee of $100,000,000 (the “Purchaser Termination Fee”) by wire transfer of immediately available funds, such payment to be made within two Business Days of the applicable termination.

 

(c)          The parties acknowledge and hereby agree that the Purchaser Termination Fee if, as and when required to be paid in accordance with this Section 8.3, shall not constitute a penalty but will be liquidated damages, in a reasonable amount that will compensate the party receiving such amount in the circumstances in which it is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transaction, which amount would otherwise be impossible to calculate with precision.  The parties acknowledge and hereby agree that in no event shall Purchaser be required to pay the Purchaser Termination Fee on more than one occasion.

 

(d)          Each of the parties acknowledges that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, the parties would not enter into this Agreement.  If Purchaser fails to timely pay the Purchaser Termination Fee in accordance with Section 8.3(b) when due hereunder, then Purchaser shall pay to Seller (or its designee) its costs and expenses (including reasonable attorneys’ fees and the fees and expenses of any expert or consultant engaged by Seller) in connection with any steps taken to collect such fee, together with interest on the amount of such payment from the date such payment was required to be made until the date of payment at a per annum rate based on the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment, plus 4%.  Any amount payable pursuant to Section 8.3(b) shall be paid by Purchaser by wire transfer of same day funds prior to or on the date such payment is required to be made under Section 8.3(b).

 

(e)          Notwithstanding anything to the contrary in this Agreement, in any circumstance in which this Agreement is validly terminated and the Purchaser Termination Fee is paid to Seller (or its designee) by Purchaser pursuant to this Section 8.3, and Seller (or its designee) is reimbursed for any costs and expenses of the Company in accordance with Section 6.10(d) and Section 8.3(d), the receipt of the Purchaser Termination Fee and such reimbursements shall, subject to Section 10.13, be the sole and exclusive monetary remedy of Seller and the Company against Purchaser or any of its former, current or future general or limited partners, stockholders, controlling Persons, managers, members, directors, officers, employees, Affiliates, affiliated (or commonly advised) funds, representatives, agents or any their respective assignees or successors or any former, current or future general or limited partner, stockholder, controlling Person, manager, member, director, officer, employee, Affiliate, affiliated (or commonly advised) fund, representative, agent, assignee or successor of any of the foregoing (collectively, the “Purchaser Related Parties”) or any Lender Related Party for any loss or damage suffered as a result of the failure of the Transaction to be consummated or for a breach of, or failure to perform under, this Agreement or any certificate or other document delivered in connection herewith or otherwise or in respect of any representation made or alleged to have been made in connection herewith or therewith and upon payment of such amounts, none of the Purchaser Related Parties or Lender Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or in respect of any representations made or alleged to be made in connection herewith, except that nothing shall relieve Purchaser of its obligations under Section 6.4, Section 6.5, Section 6.10(d) and Section 8.3(d), the applicable Affiliate of Purchaser under the Confidentiality Agreement or the Guarantor under the Limited Guarantee.  Notwithstanding anything to the contrary contained in this Agreement, and without limiting the Company’s rights under Section 10.13, under no circumstances will the Company be entitled to monetary damages under this Agreement or in connection with the transactions contemplated hereby from (i) Purchaser in excess of the amount equal to the Purchaser Termination Fee (and any costs, expenses, interest and other amounts payable pursuant to Section 6.10(d) and Section 8.3(d)) or (ii) any Purchaser Related Parties (other than Purchaser), other than pursuant to, and in accordance with the terms of, the Limited Guarantee, the Equity Financing Commitment or the Confidentiality Agreement.

 

 

 

Section 9.1          No Reliance.

 

(a)          Except for the representations and warranties contained in Article IV, Purchaser is acquiring the Company Business “As-Is, Where-Is”, and none of Seller, its Subsidiaries, the Acquired Companies or any of their respective Affiliates, directors, officers, employees, subsidiaries, controlling persons, agents or other Representatives or any other Person or Non-Recourse Party has made or makes or is authorized to make, and Purchaser hereby waives, any other express or implied representation or warranty, express or implied, whether written or oral, on behalf of Seller, its Subsidiaries, the Acquired Companies or their respective Affiliates, directors, officers, employees, Subsidiaries, controlling persons, agents or other Representatives or any other Person.

 

(b)          To the fullest extent permitted by applicable Law, except for the representations and warranties expressly set forth in Article IV, none of Seller, its Subsidiaries, the Acquired Companies or any other Person will have or be subject to any liability or indemnification obligation on any basis (including in contract or tort, under applicable federal or state securities Laws or otherwise) to Purchaser or any other Person resulting from the sharing with Purchaser or its Representative, or Purchaser’s use of any information, documents, projections, forecasts or other materials made available to Purchaser in the Electronic Data Room or management presentations (or omissions therefrom) in expectation of the transactions contemplated by this Agreement or otherwise.  Except for the representations and warranties expressly set forth in Article IV, it is understood and Purchaser acknowledges that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations provided or addressed to Purchaser are not and shall not be deemed to be or to include representations and warranties of Seller, its Subsidiaries, the Acquired Companies or any of their respective Affiliates.  Except for the representations and warranties expressly set forth in Article IV, Purchaser acknowledges and agrees, to the fullest extent permitted by applicable Law, to Seller’s and the Company’s express disavowal and disclaimer of any other representations and warranties, whether made by Seller, the Company or any other Person on behalf of Seller or the Company, and of all liability and responsibility for any representation, warranty, projections, forecasts or other materials made available to Purchaser, including any opinion, information, projection, forecast or other information that may have been or may be provided to Purchaser by any director, officer, employee, agent, consultant or other Representative of Seller, the Company or any of their respective Affiliates.  In furtherance of the foregoing, and not in limitation thereof, Purchaser specifically acknowledges and agrees that none of Seller, its Subsidiaries, the Acquired Companies or any of their respective Affiliates makes or has made any representation or warranty, express or implied, with respect to any financial projection or forecast delivered to Purchaser with respect to the performance of the Company Business either before or after the Closing Date.  Purchaser acknowledges and agrees, on its own behalf and on behalf of the Purchaser Related Parties, that (i) such projections or forecasts are being provided solely for the convenience of Purchaser to facilitate its own independent investigation of the Company Business, (ii) there are uncertainties inherent in attempting to make such projections or forecasts, (iii) Purchaser is familiar with such uncertainties and (iv) Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all projections or forecasts (including the reasonableness of the underlying assumptions).  Purchaser acknowledges that it has conducted to its satisfaction its own independent investigation of the condition, operations and businesses of the Company Business and, in making their determination to proceed with the transactions contemplated by this Agreement, Purchaser has been provided and have evaluated such documents and information as they have deemed necessary and have relied solely on the results of their own independent investigation and verification and the representations and warranties expressly set forth in Article IV.

 

Section 9.2          Survival.  To the fullest extent permitted by applicable Law, the representations, warranties, covenants and agreements of the parties contained in this Agreement or in any certificate delivered in connection herewith shall terminate effective as of the Closing and there shall be no liability in respect thereof (except for claims based on fraud), whether such liability has accrued prior to or after the Closing, on the part of any party, except that the covenants and agreements contained in this Agreement that by their terms apply or are to be performed in whole or in part following the Closing (including, for the avoidance of doubt, Article X) shall survive the Closing in accordance with their terms and, if no term is specified, then for the longest period permitted by Law.  Furthermore, without limiting the generality of this Section 9.2, except for claims based on fraud, no Action will be brought, encouraged, supported or maintained by, or on behalf of, any party against any other party, and no recourse will be sought or granted against any of them, by virtue of, or based upon, any alleged misrepresentation or inaccuracy in, or breach of, any of the representations, warranties, covenants or agreements of the parties contained in this Agreement or in any certificate delivered in connection herewith that have terminated in accordance with this Section 9.2.

 

 

Section 10.1        Assignment; Binding Effect.  This Agreement and the rights hereunder are not assignable unless such assignment is consented to in writing by both Purchaser and Seller and, subject to the preceding clause, this Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns; provided, however, that no consent of Seller shall be required for any assignment by Purchaser (i) in the nature of a collateral assignment of any or all of Purchaser’s rights hereunder to any Financing Source or agent or collateral trustee for any Financing Source, (ii) of any of Purchaser’s rights or obligations hereunder to any Affiliate (including, the right to designate one or more Affiliates as the purchasers of the Equity Interests of any or all of the Other Purchased Entities), or (iii) of any or all of Purchaser’s rights and obligations hereunder to any Person who acquires any substantial portion of the Company Business, with the understanding and agreement that any assignment of any of Purchaser’s obligations hereunder pursuant to the foregoing clauses (i), (ii) or (iii) shall not relieve Purchaser of the assigned obligations to the extent they are not performed by such assignee.

 

Section 10.2        Governing Law; Jurisdiction.

 

(a)          This Agreement and all Actions (whether in tort, contract or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any Action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement) shall be governed by and construed in accordance with the Laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.

 

(b)          Each of the parties hereto hereby irrevocably and unconditionally (i) submits, for itself and its property, to the exclusive jurisdiction of the Delaware Court of Chancery in Wilmington, Delaware (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, the United States District Court for the Southern District of New York located in New York, New York or, if such court declines to accept jurisdiction, then any court of the State of New York sitting in the borough of Manhattan), and any appellate court from any thereof, in any Action arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement (including any Action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such Actions shall be heard and determined in such Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, the United States District Court for the Southern District of New York located in New York, New York or, if such court declines to accept jurisdiction, then any court of the State of New York sitting in the borough of Manhattan), (ii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any Action arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement (including any Action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement) in the Delaware Court of Chancery, the United States District Court for the Southern District of New York located in New York, New York or any court of the State of New York sitting in the borough of Manhattan, (iii) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such Action in any such court and (iv) agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to it at the applicable address in Section 10.4 shall be effective service of process for any Action brought in any such court.

 

(c)          Notwithstanding anything to the contrary contained herein, the parties hereby, each on behalf of itself and each of its controlled Affiliates, further agree that federal and New York State courts located in the City and County of New York, Borough of Manhattan (and appellate courts thereof) shall have exclusive jurisdiction over any action brought against any Lender Related Party in connection with the transactions contemplated under this Agreement, and the Company and the Purchaser, each on behalf of itself and each of its controlled Affiliates hereto irrevocably submits itself and its property with respect to any such action to the exclusive jurisdiction of such court.  Except to the extent relating to the interpretation of any provisions in this Agreement (including any provision in any documentation related to the Financing that expressly specifies that the interpretation of such provisions shall be governed by and construed in accordance with the Law of the State of Delaware), any action brought against any Lender Related Party in connection with the transactions contemplated under this Agreement shall be governed by, and construed in accordance with, the Law of the State of New York.

 

Section 10.3          WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NEGOTIATION, EXECUTION, PERFORMANCE, AND ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER AGREEMENT ENTERED INTO IN CONNECTION HEREWITH AND FOR ANY COUNTERCLAIM WITH RESPECT THERETO (INCLUDING ANY LEGAL PROCEEDING AGAINST OR INVOLVING ANY FINANCING SOURCE ARISING OUT OF THIS AGREEMENT OR THE DEBT FINANCING).  EACH OF THE PARTIES HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.3.

 

Section 10.4          Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) when received if delivered personally, (b) when successfully transmitted by e-mail, and (c) on the next Business Day when sent by overnight courier service, in each case, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to Seller, to:

 

Ingersoll Rand Inc.

800-A Beaty Street

Davidson, NC 28036

Attn:          Andy Schiesl

Email:        ***@***

with copies (which shall not constitute notice):

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attn:          Eric Swedenburg

E-mail:      ***@***

 

If to Purchaser, to:

 

c/o Platinum Equity Advisors, LLC

360 North Crescent Drive

Beverly Hills, CA   90210

Attention:  General Counsel

Email:  ***@***

with copies (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP

600 Anton Boulevard, Suite 1800

Costa Mesa, CA   92626

Attention:  James W. Loss and Randall Wood

Facsimile No.:  (714) 830-0700

Email:  ***@*** and ***@***

or to such other address or Person as a party shall have last designated by such notice to the other parties.

Section 10.5        Headings.  The headings contained in this Agreement are inserted for convenience only and shall not be considered in interpreting or construing any of the provisions contained in this Agreement.

 

Section 10.6        Fees and Expenses.  Except as otherwise specified in this Agreement, each party shall bear its own costs and expenses (including investment advisory and legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby; provided, however, that Purchaser shall be responsible for all fees and expenses in connection with any filing pursuant to the HSR Act and the Competition Laws.  Notwithstanding the foregoing, Purchaser and Seller shall each pay one-half of all Transfer Taxes.  Purchaser shall be responsible for filing of all Tax Returns with respect to any Transfer Taxes; provided that Purchaser shall provide Seller with a copy of such Tax Returns prior to the filing and shall make such changes to such Tax Returns as Seller may reasonably request. To the extent Purchaser actually pays more than one-half of any Transfer Tax in connection with filing any such Tax Return, Seller will promptly reimburse Purchaser such that Purchaser and Seller each pay one-half of such Transfer Tax.

 

Section 10.7        Entire Agreement.  This Agreement (including the Exhibits and Schedules), together with the other Transaction Agreements and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements and understandings between the parties with respect to such subject matter; provided, however, that this Agreement shall not supersede the terms and provisions of the Confidentiality Agreement, which shall survive and remain in effect until expiration or termination thereof in accordance with its terms and this Agreement.

 

Section 10.8          Interpretation.

 

(a)          When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be to an Article, Section, Exhibit or Schedule of or to this Agreement (or, with respect to any references to Sections of the Company Disclosure Schedule in Article IV, the Company Disclosure Schedule, and, with respect to any references to Sections of the Purchaser Disclosure Schedule in Article V, the Purchaser Disclosure Schedule) unless otherwise indicated.

 

(b)          Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

(c)          When a reference in this Agreement is made to a “party” or “parties,” such reference shall be to a party or parties to this Agreement unless otherwise indicated.

 

(d)          Unless the context requires otherwise, the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words in this Agreement refer to this entire Agreement.

 

(e)          Unless the context requires otherwise, words in this Agreement using the singular or plural number also include the plural or singular number, respectively, and the use of any gender herein shall be deemed to include the other genders.

 

(f)          The words “to the extent” shall mean the degree to which a subject or other thing extends, and shall not simply mean “if”.

 

(g)          References in this Agreement to “dollars” or “$” are to U.S. dollars.

 

(h)          The term “ordinary course of business” shall take into account the commercially reasonable actions taken by the relevant party in response to the Pandemic or the Pandemic Measures.

 

(i)          The word “or” has the inclusive meaning represented by the phrase “and/or.”

 

(j)          Unless the context shall otherwise require, any references to any Contract (including this Agreement) or Law shall be deemed to be references to such Contract or Law as amended, supplemented or modified from time to time in accordance with its terms and the terms hereof, as applicable, and in effect at any given time (and, in the case of any Law, to any successor provisions).

 

(k)          Unless the context shall otherwise require, references to any Person include references to such Person’s successors and permitted assigns, and in the case of any Governmental Entity, to any Person(s) succeeding to its functions and capacities.

 

(l)          When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded.

 

(m)          Any reference herein to any information that has been “made available” or “provided to” Purchaser shall mean that such information has been posted to the Electronic Data Room no later than 3:00 p.m., EDT, on the date hereof with customary notice being provided that such information has been added to the Electronic Data Room.

 

(n)          This Agreement was prepared jointly by the parties and no rule that it be construed against the drafter will have any application in its construction or interpretation.

 

Section 10.9        Company Disclosure Schedule.

 

(a)          The Company Disclosure Schedule and the information and disclosures contained therein relate to and qualify certain of the representations, warranties, covenants and obligations made by Seller and the Company in this Agreement and shall not be construed or otherwise deemed to constitute, any representation, warranty, covenant or obligation of Seller, the Company or any other Person except to the extent explicitly provided in this Agreement and shall not be deemed to expand in any way the scope or effect of any of such representations, warranties, covenants or obligations.  No reference to or disclosure of any item or other matter in the Company Disclosure Schedule shall be construed as an admission or indication, in and of itself, that such item represents a material exception or material fact, event or circumstance, that such item has had or would reasonably be expected to have a Business Material Adverse Effect, or that such item or other matter is required to be referred to or disclosed in the Company Disclosure Schedule.  Such additional matters are set forth for informational purposes only.  No reference in the Company Disclosure Schedule to any agreement or document, in and of itself, shall be construed as an admission or indication that such agreement or document is enforceable or currently in effect or that there are any obligations remaining to be performed or any rights that may be exercised under such agreement or document.  No disclosure in the Company Disclosure Schedule relating to any possible breach or violation of, or non-compliance with, any agreement, law or regulation, in and of itself, shall be construed as an admission or indication that any such breach, violation or non-compliance exists or has actually occurred, and nothing in the Company Disclosure Schedule shall constitute an admission of any liability or obligation of any Person to any other Person or shall confer or give any third party any remedy, claim, liability, reimbursement, cause of action or any other right whatsoever.  Neither the specification of any item or matter in any representation or warranty contained in this Agreement nor the inclusion of any specific item in the Company Disclosure Schedule is intended to imply that such item or matter, or other items or matters, are or are not in the ordinary course of business, and no party shall use the fact of the setting forth or the inclusion of any such item or matter in any dispute or controversy between the parties as to whether any obligation, item or matter not described in this Agreement or included in the Company Disclosure Schedule is or is not in the ordinary course of business for purposes of this Agreement.  The Company Disclosure Schedule is arranged in sections corresponding to the Sections in this Agreement and any items or matters set forth in one section or subsection of the Company Disclosure Schedule shall be deemed to apply to and qualify the Section or subsection of this Agreement to which it corresponds and each other Section or subsection of this Agreement to the extent the relevance of such items or matters to such other Section or subsection of this Agreement is reasonably apparent.  The inclusion of any cross-references to any section or subsection of the Company Disclosure Schedule, or the failure to include such cross-references, shall not be deemed to mean that the relevance of any disclosure is not reasonably apparent for the purposes of the immediately preceding sentence.  The headings contained in the Company Disclosure Schedule are included for convenience and reference only, and are not intended to limit the effect of the disclosures contained in the Company Disclosure Schedule or to expand, modify or influence the scope of the information required to be disclosed in the Company Disclosure Schedule or the interpretation of this Agreement.

 

(b)          The information contained in the Company Disclosure Schedule is confidential, proprietary information of Seller and the Company, and Purchaser shall be obligated to maintain and protect such confidential information pursuant to this Agreement and the Confidentiality Agreement.  In disclosing the information in the Company Disclosure Schedule, Seller and the Company expressly does not waive any attorney-client privilege or other similar privilege associated with such information or any protection afforded by the work-product doctrine or other similar doctrine with respect to any of the matters disclosed or discussed herein.

 

Section 10.10      Waiver and Amendment.  This Agreement may be amended, modified or supplemented only by a mutual written agreement executed and delivered by Seller and Purchaser.  Except as otherwise provided in this Agreement, any failure of any party to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.  Notwithstanding anything to the contrary contained herein, Section 8.3(e), Section 10.2(c), Section 10.3, this Section 10.10, Section 10.12 and Section 10.15(b) (or any other provision of this Agreement to the extent that an amendment of such provision would modify the substance of any such foregoing Section) may not be amended or waived in a manner that is material and adverse in any respect to a Lender Related Party without the prior written consent of the applicable Financing Source.

 

Section 10.11       Counterparts.  This Agreement may be executed in any number of counterparts, including by means of facsimile or email in Portable Document Format, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

Section 10.12       Third-Party Beneficiaries.  This Agreement shall be binding upon and inure solely to the benefit of, and be enforceable by, only the parties hereto and their respective successors and permitted assigns except as set forth in Section 6.8, Section 10.15 and Section 10.16 each of which rights are hereby expressly acknowledged and agreed to by Purchaser, nothing herein, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.  Notwithstanding the foregoing, each Lender Related Party shall be a third party beneficiary of Section 8.3(e), Section 10.2(c), Section 10.3, Section 10.10 and this last sentence of Section 10.12 and Section 10.15(b).

 

Section 10.13       Remedies.

 

(a)          The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with its specified terms or otherwise breach such provisions.  Accordingly, the parties hereto acknowledge and hereby agree that, subject to the terms of this Section 10.13, in the event of any breach or threatened breach by Seller or the Company, on the one hand, or Purchaser, on the other hand, of any of their respective covenants or obligations set forth in this Agreement, Seller and the Company, on the one hand, and Purchaser, on the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement by the other (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other (as applicable) under this Agreement, without proof of actual damages or inadequacy of legal remedy and without bond or other security being required.  The parties hereby further acknowledge and agree that prior to the Closing, Seller shall be entitled to specific performance to enforce specifically the terms and provisions of, and to prevent or cure breaches of this Agreement, including Section 6.7 and Section 6.10, by Purchaser and to cause Purchaser to consummate the transactions contemplated hereby, including to effect the Closing in accordance with Section 2.2, on the terms and subject to the conditions in this Agreement.

 

(b)          Notwithstanding anything in this Agreement to the contrary, it is hereby acknowledged and agreed that Seller shall be entitled to specific performance to cause Purchaser to cause the Equity Financing to be funded and to consummate the Closing if, but only if, (i) Purchaser fails to complete the Closing by the date the Closing is required to have occurred pursuant to Section 2.2, (ii) the financing provided for by the Debt Financing Commitment (or, if Alternative Financing, such Alternative Financing, as the case may be) has been funded or will be funded at the Closing if the Equity Financing is funded at the Closing and (iii) Seller has confirmed in writing that, if specific performance is granted and the Equity Financing and Debt Financing are funded, then Seller will take all such actions in its power to cause the Closing to occur.  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 (x) the party seeking the injunction, specific performance and other equitable relief has an adequate remedy at law or (y) an award of specific performance is not an appropriate remedy for any reason at law or equity.  Notwithstanding anything else to the contrary in this Agreement, for the avoidance of doubt, while Seller may concurrently seek, as alternative remedies, (i) specific performance or other equitable relief, subject in all respects to this Section 10.13 and (ii) payment of the Purchaser Termination Fee or monetary damages, if, as and when required pursuant to this Agreement, under no circumstances shall Seller be permitted or entitled to receive a grant of specific performance to cause the Equity Financing to be funded (whether under this Agreement or the Equity Financing Commitment) or other equitable relief if this Agreement has been validly terminated in accordance with its terms and Seller has requested and received payment of the Purchaser Termination Fee and all of the other amounts, as and when due, owing to Seller pursuant to Section 6.10(d) and Section 8.3(d).

 

(c)          The remedies available to Seller pursuant to this Section 10.13 shall be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit Seller from seeking to obtain such other remedies.  For the avoidance of doubt, the parties hereto further agree that (i) by seeking the equitable remedies provided for in this Section 10.13, a party shall not in any respect waive its right to seek at any time any other form of relief that may be available to a party in accordance with the terms of this Agreement in the event that this Agreement has been terminated or in the event that the equitable remedies provided for in this Section 10.13 are not available or otherwise are not granted, and (ii) nothing set forth in this Section 10.13 shall require any party hereto to institute any proceeding for (or limit any party’s right to institute any proceeding for) specific performance under this Section 10.13 prior or as a condition to exercising any termination right under Article VIII (and pursuing monetary damages and/or the Purchaser Termination Fee (and any other amounts, as and when due, owing to Seller or the Company pursuant to Section 6.10(d) and Section 8.3(d)) after such termination to the extent permitted in accordance with this Agreement), nor shall the commencement of any legal proceeding pursuant to this Section 10.13 or anything set forth in this Section 10.13 restrict or limit any party’s right to terminate this Agreement in accordance with the terms of Article VIII or pursue any other remedies under this Agreement.

 

Section 10.14      Severability.  If any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

 

Section 10.15      No Recourse.

(a)          Notwithstanding anything that may be expressed or implied in this Agreement or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this Agreement, Purchaser covenants, agrees and acknowledges that no Persons other than Seller and the Company have any liabilities, obligations, commitments (whether known or unknown or whether contingent or otherwise) hereunder, and that, notwithstanding that the Seller or its respective managing members or general partners may be partnerships or limited liability companies, Purchaser has no right of recovery under this Agreement, or any claim based on such liabilities, obligations, commitments against, and no personal liability shall attach to, the former, current or future equity holders, controlling persons, directors, officers, employees, agents, Affiliates, members, managers or general or limited partners of any of Seller or the Company or any former, current or future stockholder, controlling person, director, officer, employee, general or limited partner, member, manager, Affiliate or agent of any of the foregoing (collectively, but not including Seller and the Company, each a “Non-Recourse Party”), through Seller, the Company or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of the Company against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or Law, or otherwise.  Without limiting the foregoing, no claim will be brought or maintained by Purchaser or any Purchaser Related Party or any of their respective successors or permitted assigns against any Non-Recourse Party that is not otherwise expressly identified as a party to this Agreement, and no recourse will be brought or granted against any of them, by virtue of or based upon any alleged misrepresentation or inaccuracy in or breach or nonperformance of any of the representations, warranties, covenants or agreements of any party hereto set forth or contained in this Agreement, any exhibit or schedule hereto, any other document contemplated hereby or any certificate, instrument, opinion, agreement or other document of Seller, the Company or any other Person delivered hereunder.

 

(b)          No Lender Related Party shall have any liability or obligation to the Seller and its Affiliates and any of the Seller’s or any of such Affiliates’ respective current, former or future officers, directors, employees, agents, representatives, stockholders, limited partners, managers, members or partners with respect to any claim or cause of action (whether in Contract or in tort, in law or in equity or otherwise) relating to: (i) this Agreement or the transactions contemplated hereunder, (ii) the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), (iii) any breach or violation of this Agreement and (iv) any failure of the transactions contemplated hereunder to be consummated. For the avoidance of doubt, this Section 10.15(b) does not limit or affect any rights or remedies that Purchaser may have against the parties to the Debt Financing Commitments pursuant to the terms and conditions of the Debt Financing Commitments.

 

Section 10.16      Representation.  Purchaser agrees, on its own behalf and on behalf of each of its directors, officers, managers, employees and Affiliates, that, following the Closing, Simpson Thacher & Bartlett LLP may serve as counsel to Seller and its Affiliates in connection with any matters related to this Agreement and the contemplated transactions, including any litigation, claim or obligation arising out of or relating to this Agreement or the contemplated transactions notwithstanding any representation by Simpson Thacher & Bartlett LLP prior to the Closing Date of the Company.  Purchaser and the Company hereby (a) waive any claim they have or may have that Simpson Thacher & Bartlett LLP has a conflict of interest or is otherwise prohibited from engaging in such representation and (b) agree that, in the event that a dispute arises either before or after the Closing between Purchaser and Seller or any of their respective Affiliates, Simpson Thacher & Bartlett LLP may represent Seller or any of its Affiliates in such dispute even though the interests of such Person(s) may be directly adverse to Purchaser or the Company and even though Simpson Thacher & Bartlett LLP may have represented the Company in a matter substantially related to such dispute.  Purchaser and the Company also further agree that, as to all communications prior to Closing among Simpson Thacher & Bartlett LLP and the Company, Seller or Seller’s Affiliates and Representatives, that relate in any way to the transactions contemplated hereby, the attorney-client privilege and the expectation of client confidence belongs to the Seller and may be controlled by Seller and shall not pass to or be claimed by Purchaser or the Company.  Notwithstanding the foregoing, in the event that a dispute arises between Purchaser, the Company and a third party other than a party to this Agreement after the Closing, the Company may assert the attorney-client privilege to prevent disclosure of confidential communications by Simpson Thacher & Bartlett LLP to such third party; provided, however, that the Company may not waive such privilege without the prior written consent of Seller.

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be executed the day and year first above written.