REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (a) as disclosed in the Company SEC Documents filed with, or furnished to, the SEC and publicly available on or after January 1, 2020 and at least two Business Days prior to the date hereof (other than information that is contained (i) solely in the risk factors sections of such Company SEC Documents, except to the extent such information consists of factual and/or historical statements, and (ii) in any forward-looking statements in such Company SEC Documents that are of a nature that they speculate about future developments) or (b) as set forth in the Company Disclosure Schedule (it being agreed that disclosure of any item in any Section or Subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to any other Section or Subsection of the Company Disclosure Schedule to which the relevance of such item is reasonably apparent on the face of such disclosure), the Company hereby represents and warrants to Parent and Merger Sub as follows:
Section 4.01 Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority necessary to own, lease and operate its properties and to carry on its business as now conducted. The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification or licensing is necessary, except for those jurisdictions where failure to be so qualified or licensed would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has Made Available to Parent true, complete and correct copies of the certificate of incorporation and bylaws of the Company as currently in effect.
Section 4.02 Corporate Authorization.
(a) The Company has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and, subject to the Stockholder Approval, to consummate the Merger and the other transactions contemplated by this Agreement in accordance with the terms hereof. The execution, delivery and performance by the Company of this Agreement and the performance by the Company of its obligations hereunder, and consummation by the Company of the Merger and the other transactions contemplated by this Agreement, except for obtaining the Stockholder Approval, have been duly authorized by all necessary corporate action on the part of the Company. Assuming the due authorization, execution and delivery of this Agreement by Parent and Merger Sub, this Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Applicable Law affecting creditors’ rights generally and by general principles of equity.
(b) At a meeting duly called and held, prior to the execution of this Agreement, the Company Board duly adopted resolutions (i) declaring that this Agreement, the Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company’s stockholders, (ii) approving this Agreement, the Merger and the other transactions contemplated by this Agreement and (iii) recommending adoption of this Agreement to the stockholders of the Company (the “Company Recommendation”), which Company Recommendation has not been withdrawn, rescinded or modified in any way as of the date hereof.
(c) The only vote of holders of any class of capital stock of the Company necessary to adopt this Agreement is adoption of this Agreement by the affirmative vote of a majority of the outstanding shares of Company Common Stock, voting as a single class (such vote, the “Stockholder Approval”).
Section 4.03 Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement require no action by or in respect of, or filing with, any Governmental Authority, other than (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any
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applicable requirements of (A) the HSR Act, (B) any other applicable Antitrust Laws, and (C) any applicable foreign investment regulations overseen by a relevant Governmental Authority, (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act, any other applicable U.S. state or federal or foreign securities laws, or the rules or regulations of Nasdaq, and (iv) any actions or filings the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.04 Non-contravention. The execution, delivery and performance by the Company of this Agreement and the performance by the Company of its covenants and agreements under this Agreement and the consummation by the Company of the Merger and the other transactions contemplated by this Agreement do not and will not (with or without notice or lapse of time, or both): (i) conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company or its Subsidiaries; (ii) assuming compliance with the matters referred to in Section 4.03 and that the Stockholder Approval is obtained, result in a violation or breach of any provision of any Applicable Law; (iii) require any consent or approval under, result in any breach of or default under, result in the acceleration of any obligation under, or result in termination or give to others any right of termination of, any Material Contract; (iv) give rise to or result in any person having, or having the right to exercise, any preemptive rights, rights of first refusal, rights to acquire or similar rights with respect to any capital stock of the Company or any of its Subsidiaries or any of their respective assets or properties; or (v) result in the creation or imposition of any Lien (other than Permitted Liens) on any properties or assets (including intangible assets) of the Company or any of its Subsidiaries pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or its or any of their respective properties is bound or affected, with such exceptions, in the case of each of clauses (ii), (iii), (iv) and (v), as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(a) The authorized capital stock of the Company consists of (i) 1,000,000,000 shares of common stock of the Company, par value $0.001 per share (the “Company Common Stock”), and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share (the “Company Preferred Stock”). At the close of business on January 26, 2022 (the “Capitalization Date”): (A) 124,913,470 shares of Company Common Stock were issued and outstanding; (B) Company Stock Options (having a weighted average exercise price of $31.99) to purchase an aggregate of 481,479 shares of Company Common Stock were issued and outstanding; (C) an aggregate of 116,026.987 shares of Company Common Stock were subject to outstanding Company DSU Awards; (D) an aggregate of 4,226,104.793 shares of Company Common Stock were subject to outstanding Company RSU Awards; (E) an aggregate of 1,495,276 shares of Company Common Stock were subject to outstanding Company PRSU Awards (assuming maximum achievement); (F) an aggregate of 12,810,012 shares of Company Common Stock were reserved for issuance pursuant to the ESPP; (G) an aggregate of 200,343,649 shares of Company Common Stock were held in the treasury of the Company; and (H) zero shares of Company Preferred Stock were issued and outstanding. Since the Capitalization Date until the date of this Agreement, the Company has not issued any securities (including derivative securities) except for shares of Company Common Stock issued upon exercise of stock options or settlement of restricted stock units or other stock awards, in each case that were outstanding on or prior to the Capitalization Date.
(b) Section 4.05(b) of the Company Disclosure Schedule sets forth, as of the Capitalization Date, a complete and correct list of (i) all outstanding Company Stock Options, including the respective name of the holder, the grant date, expiration date, the vesting schedule, the number of shares subject to such award, the exercise or purchase price per share, the Company Stock Plan pursuant to which such Company Stock Option was granted, and whether any Company Stock Option is intended to be an “incentive stock option” (within the meaning of Section 422 of the Code), (ii) all outstanding Company DSU Awards, including the respective name of the holder, the grant date, the vesting schedule, the number of shares of Company Common Stock subject to each Company DSU Award, the Company Stock Plan pursuant to which such Company DSU Award was granted, and
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whether such Company DSU Award is subject to Section 409A of the Code, (iii) all outstanding Company RSU Awards, including the respective name of the holder, the grant date, the vesting schedule, the number of shares of Company Common Stock subject to each Company RSU Award, and the Company Stock Plan pursuant to which such Company RSU Award was granted, and (iv) all outstanding Company PRSU Awards, including the respective name of the holder, the grant date, the performance period, the target and maximum number of shares of Company Common Stock subject to each Company PRSU Award, and the Company Stock Plan pursuant to which such Company PRSU Award was granted.
(c) All outstanding shares of Company Common Stock are, and all shares of Company Common Stock reserved for issuance as specified above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the organizational documents of the Company or any agreement to which the Company is a party or otherwise bound. The outstanding shares of Company Common Stock have been issued in compliance with United States federal and state securities laws and any applicable foreign securities laws. All of the outstanding shares of capital stock of each of the Subsidiaries of the Company are duly authorized, validly issued, fully paid and nonassessable (to the extent the relevant jurisdictions recognize such concepts in the case of foreign Subsidiaries), and all such shares (other than directors’ qualifying shares in the case of foreign Subsidiaries) are owned by the Company or a Subsidiary of the Company free and clear of any and all Liens (other than Permitted Liens). There are no accrued and unpaid dividends with respect to any outstanding shares of capital stock of the Company.
(d) Except as set forth in Section 4.05(a) or expressly permitted pursuant to Section 6.01(b)(iv) and for changes since the Capitalization Date resulting from (x) the exercise or settlement of Company Equity Awards outstanding on such date or granted thereafter as permitted under Section 6.01(b)(iv), in each case, in accordance with their respective terms, or (y) the granting of rights to purchase, and the issuance of, Company Common Stock pursuant to the ESPP (in each case, subject to the limitations set forth in Section 2.06(f)), there are no outstanding (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options, warrants or other rights or arrangements to acquire from the Company, or other obligations or commitments of the Company to issue, any capital stock or other voting securities or ownership interests in, or any securities convertible into or exchangeable for capital stock or other voting securities or ownership interests in, the Company, or (iv) restricted shares, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, the Company (the items in clauses (i)-(iv) being referred to collectively as the “Company Securities”). Except for the Voting and Support Agreement, there are no (A) voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of the Company or any of its Subsidiaries or (B) contractual obligations or commitments of the Company or any of its Subsidiaries of any character restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of the Company or any of its Subsidiaries. Except as set forth in the applicable award agreements governing the Company Equity Awards that are outstanding as of the date hereof or entered into as expressly permitted by this Agreement, there are no outstanding obligations or commitments of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Securities. All Company Stock Options, Company DSU Awards, Company RSU Awards, Company PRSU Awards and rights under the ESPP may, by their terms, be treated in accordance with Section 2.06. No Subsidiary of the Company owns any Company Securities.
(e) Except for the Voting and Support Agreement, neither the Company nor its Subsidiaries are party to any Contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any Company Securities.
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(a) Section 4.06(a) of the Company Disclosure Schedule lists each of the Company’s Subsidiaries as of the date hereof, together with the jurisdiction of incorporation or organization, as applicable, of each Subsidiary. The Company owns, directly or indirectly, all of the outstanding capital stock of each of the Company’s Subsidiaries. Except for securities held by the Company in connection with its ordinary course treasury investment activities and investments that are fully impaired, neither the Company nor any of its Subsidiaries owns, directly or indirectly, any material investment in the capital stock or voting securities of, or other equity interests in, or has any direct or indirect material equity participation or similar interest in, or any material interest convertible into or exchangeable or exercisable for, any capital stock or voting securities of, or other equity interest in, any other Person.
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Subsidiary of the Company: (i) is a corporation or other business entity duly incorporated or organized (as applicable), validly existing and in good standing (with respect to jurisdictions that recognize such concept) under the Applicable Laws of its jurisdiction of incorporation or organization and has all requisite corporate or other organizational powers necessary to enable it to own, lease and operate its properties and to carry on its business as now conducted and (ii) is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize such concept) in each jurisdiction where such qualification or licensing is necessary.
(c) The Company has Made Available to Parent true, complete and correct copies of the certificate of incorporation and bylaws (or equivalent organizational documents) each as amended to date, of each of its Subsidiaries (the “Company Subsidiary Documents”). Except as would not be material to the Company and its Subsidiaries, taken as a whole, the Company Subsidiary Documents, each as amended to date, are in full force and effect and each Subsidiary is in compliance with its respective Company Subsidiary Documents.
Section 4.07 SEC Filings and the Sarbanes-Oxley Act.
(a) The Company has Made Available to Parent complete and correct copies of (i) the Company’s annual reports on Form 10-K for its fiscal years ended December 31, 2019 and December 31, 2020, (ii) its proxy or information statements relating to meetings of the stockholders of the Company since January 1, 2020 and (iii) all of its other reports, statements, schedules and registration statements filed or furnished with the SEC since January 1, 2020 (the documents referred to in this Section 4.07(a), together with all amendments thereto, are collectively referred to as the “Company SEC Documents”).
(b) Since January 1, 2020 through the date hereof, the Company has filed with the SEC each report, statement, schedule, form or other document or filing required by Applicable Law to be filed by the Company at or prior to the time so required. As of the date hereof, no Subsidiary of the Company is required to file any report, statement, schedule, form or other document with the SEC.
(c) As of its filing date (or, if amended or superseded, on the date of such filing), each Company SEC Document complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations thereunder.
(d) As of its filing date (or, if amended or superseded, on the date of such filing), no Company SEC Document filed pursuant to the Exchange Act and the Sarbanes-Oxley Act contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. No Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or amendment became effective, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
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(e) As of the date hereof, (i) there are no outstanding or unresolved comments in any comment letters received by the Company from the SEC, and (ii) to the Knowledge of the Company, none of the Company SEC Documents is the subject of any ongoing review by the SEC.
(f) Each required form, report and document containing financial statements that has been filed with the SEC by the Company since January 1, 2020 through the date hereof was accompanied by the certifications required to be filed by the Company’s principal executive officer and principal financial officer, as applicable, pursuant to the Sarbanes-Oxley Act and, at the time of filing of each such certification, such certification was true and accurate and complied with the Sarbanes-Oxley Act. As of the date hereof, to the Knowledge of the Company, neither the Company, nor any current or former executive officer of the Company, has received written notice from any Governmental Authority challenging or questioning the accuracy, completeness, form or manner of filing of such certifications made with respect to the Company SEC Documents filed prior to the date hereof.
Section 4.08 Financial Statements; Internal Controls.
(a) Each of the audited consolidated financial statements and unaudited condensed consolidated interim financial statements (including, in each case, any related notes and schedules) of the Company included in the Company SEC Documents (i) complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, for the absence of certain year-end adjustments and footnotes as permitted by Form 10-Q with respect to any financial statements filed on Form 10-Q), and (iii) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods presented therein (subject to normal recurring adjustments in the case of any unaudited interim financial statements).
(b) The chief executive officer and chief financial officer of the Company have made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act to be included in the Company SEC Documents, and at the time of filing, the statements contained in any such certifications were complete and correct, and the Company is otherwise in compliance in all material respects with all applicable effective provisions of the Sarbanes-Oxley Act and the applicable listing and corporate governance rules of the Nasdaq.
(c) The Company has established and maintains a system of internal accounting controls, which are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP, including policies and procedures that (i) require the maintenance of records that in reasonable detail accurately and fairly reflect the material transactions and dispositions of the assets of the Company and its Subsidiaries, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company and its Subsidiaries are being made only in accordance with appropriate authorizations of management and the Company Board and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Company and its Subsidiaries that could have a material effect on the Company’s financial statements.
(d) To the Knowledge of the Company, as of the date hereof, neither the Company nor its independent auditors have identified (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by the Company, (ii) any fraud, whether or not material, that involves the Company’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company and its Subsidiaries or (iii) any claim or allegation regarding any of the foregoing.
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Section 4.09 Absence of Certain Changes. Since the Company Balance Sheet Date through the date hereof (except in connection with the transactions contemplated by this Agreement), (a) the Company and its Subsidiaries have conducted their business in the ordinary course consistent with past practice (other than in connection with modifications, suspensions and/or alterations of operations resulting from, or determined by the Company to be advisable and reasonably necessary in response to, COVID-19 or any COVID-19 Measures) and (b) there has not been (i) any action taken by the Company or event that would have required the consent of Parent pursuant to clauses (i), (ii), (iii), (v), (viii), (xii), (xiii), (xiv), (xv), or (xvi) of Section 6.01(b) had such action or event occurred after the date of this Agreement and (ii) any event, change, effect, occurrence, or development that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.10 No Undisclosed Material Liabilities. There are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, that would be required by GAAP to be reflected on a consolidated balance sheet (or disclosed in the notes thereto), other than: (a) liabilities or obligations disclosed or provided for in the Company SEC Documents; (b) liabilities or obligations incurred in the ordinary course of business since the Company Balance Sheet Date; (c) liabilities or obligations incurred in connection with the transactions contemplated by this Agreement (including the Merger); and (d) liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.11 Litigation. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (a) there is no, and since January 1, 2019 there has been no, Proceeding pending or, to the Knowledge of the Company, threatened by or against the Company or any of its Subsidiaries and (b) neither the Company nor any of its Subsidiaries is subject to any outstanding Order. As of the date hereof, to the Knowledge of the Company, there is no pending Proceeding or outstanding Order that challenges the validity or propriety, or seeks to prevent, materially impair or materially delay consummation, of the Merger.
Section 4.12 Compliance with Applicable Law.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Company and its Subsidiaries is, and, since January 1, 2019, has been, in compliance with all Applicable Laws (other than with respect to Privacy Laws, which are contemplated in Section 4.20 and Section 4.22). Neither the Company nor any of its Subsidiaries has received any notice, written or otherwise, since January 1, 2019 through the date hereof that remains unresolved (i) of any administrative, civil or criminal investigation or material audit by any Governmental Authority relating to the Company or any of its Subsidiaries or (ii) from any Governmental Authority alleging that the Company or any of its Subsidiaries is not in compliance with any Applicable Law, except for such notices described in clauses (i) and (ii) that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each of the Company and its Subsidiaries has in effect all Governmental Authorizations necessary for it to own, lease or otherwise hold and operate its properties and assets and to carry on its businesses and operations as now conducted and (ii) there have occurred no defaults (with or without notice or lapse of time or both) under, violations of, or events giving rise to any right of termination, amendment or cancelation of, any such Governmental Authorizations.
Section 4.13 Certain Business Practices.
(a) Since January 1, 2018, none of the Company nor any of its Subsidiaries, nor any of their respective officers, directors or employees, nor to the Knowledge of the Company, any of their Representatives acting on their behalf, has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses
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relating to political activity; (ii) made any unlawful payment or unlawfully given, offered, promised, or authorized or agreed to give, any money or thing of value, directly or indirectly, to foreign or domestic Government Officials or employees or to foreign or domestic political parties or campaigns; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010, or any laws, Orders, rules, or regulations thereunder, or any comparable foreign law or statute relating to the prevention of corruption and bribery (collectively, “Anti-Corruption Laws”). The Company and its Subsidiaries have maintained in all material respects complete and accurate records of payments to any agents, consultants, representatives, third parties and Government Officials.
(b) None of the Company nor any of its Subsidiaries, nor any of their respective officers, directors or employees, nor to the Knowledge of the Company, any of their Representatives acting on their behalf, is currently, or has since January 1, 2018 been: (i) a Sanctioned Person, (ii) organized or ordinarily resident in a Sanctioned Country, (iii) engaging in any unlawful dealings or transactions with or for the benefit of any Sanctioned Person or in any Sanctioned Country, (iv) engaging in any export, reexport, transfer or provision of any goods, software, technology, data or service without, or exceeding the scope of any licenses or authorizations under all applicable Ex-Im Laws, or (v) otherwise in violation of applicable Sanctions Laws, Ex-Im Laws, or the anti-boycott laws administered by the U.S. Department of Commerce and the U.S. Department of Treasury’s Internal Revenue Service (collectively, “Trade Control Laws”).
(c) The Company and its Subsidiaries have implemented and maintain in effect written policies, procedures and internal controls, including an internal accounting controls system, that are reasonably designed to prevent, deter and detect violations of applicable Anti-Corruption Laws and Trade Control Laws. During the five years prior to the date hereof, none of the Company nor any of its Subsidiaries has, in connection with or relating to the business of the Company or any of its Subsidiaries, received from any Governmental Authority or any other Person any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Anti-Corruption Laws or Trade Control Laws.
Section 4.14 Material Contracts.
(a) Except as filed as exhibits to the Company SEC Documents, and except for this Agreement and the other agreements entered into in connection with the transactions contemplated hereby, as of the date hereof, neither the Company nor any Subsidiary of the Company is a party to or is bound by any Contract:
(i) that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the Exchange Act);
(ii) pursuant to which the Company and its Subsidiaries had annual aggregate bookings from an end-user customer (excluding Distribution Partners) in excess of $10,000,000 during calendar year 2020 or 2021 (calculated on a total contract value basis consistent with the Company’s past practice);
(iii) pursuant to which the Company and its Subsidiaries made annual aggregate payments to any supplier during calendar year 2020 or 2021 in excess of $5,000,000;
(iv) with each Distribution Partner who generated annual aggregate bookings during calendar year 2020 or 2021 in excess of $10,000,000 (calculated consistent with the Company’s past practice);
(v) evidencing a capital expenditure for which future payments would exceed $2,000,000 in the aggregate;
(vi) (A) containing a covenant limiting the ability of the Company or any Subsidiary of the Company to compete or engage in any line of business or to compete with any Person in any geographic area, (B) containing
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any covenant prohibiting the Company or any of its Subsidiaries from engaging in business with any Person or levying a fine, charge or other payment for doing so, (C) pursuant to which any Person is granted most favored customer pricing, or containing any other similar pricing restrictions, or (D) containing any covenant limiting the right of the Company to enter into any reseller, referral partner or similar partner agreements with third parties, in each case of clause (A) through (D), other than any such Contracts that are not material to the Company and its Subsidiaries taken as a whole;
(vii) (A) relating to the disposition or acquisition by the Company or any of its Subsidiaries, either in the past three years or after the date of this Agreement of a material amount of assets or (B) pursuant to which the Company or any of its Subsidiaries has acquired in the past three years or will acquire after the date of this Agreement any material ownership interest in any other Person or other business enterprise other than the Company’s Subsidiaries;
(viii) relating to or evidencing Indebtedness for borrowed money, or relating to or evidencing other Indebtedness in excess of $10,000,000, of the Company or any Subsidiary of the Company (excluding, for the avoidance of doubt, intercompany loans between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company);
(ix) entered into within the past three years with respect to the procurement of engineering services relating to the development of Company Intellectual Property used in the Company’s current products or services other than Intellectual Property assignment agreements executed by employees or independent contractors of the Company or its Subsidiaries in the ordinary course of business on the Company’s standard forms;
(x) that involves a joint venture entity, limited liability company or legal partnership (other than such arrangements between or among the Company and any wholly-owned Subsidiaries);
(xi) that is a Contract entered into within the past three years in connection with the settlement of a pending or threatened Proceeding with ongoing obligations of the Company or any of its Subsidiaries (other than solely ongoing confidentiality obligations) other than (A) releases that are immaterial in nature or amount entered into in the ordinary course of business, or (B) settlement Contracts only involving the payment of cash in amounts that do not exceed $500,000 in any individual case;
(xii) that is a license granted by the Company or any Subsidiary of the Company to Company Intellectual Property, other than non-exclusive contracts, arrangements, commitments or understandings entered into in the ordinary course of business;
(xiii) that is a collective bargaining agreement or other Contract with any labor union, labor organization, or works council (each a “Labor Agreement”);
(xiv) that is a settlement, conciliation or similar agreement with any Governmental Authority or pursuant to which the Company or any Subsidiary of the Company will have any material outstanding obligation after the date of this Agreement; or
(xv) that is a license of Third Party Rights granted to the Company or any Subsidiary of the Company, other than non-exclusive licenses to commercially available software used entirely for the Company’s or its Subsidiaries’ internal business purposes, for which the Company or any Subsidiary has made aggregate payments during the nine months ended September 30, 2021 in excess of $500,000.
(b) Each Contract of the type described above in Section 4.14(a), whether or not set forth in Section 4.14(a) of the Company Disclosure Schedule, is referred to herein as a “Material Contract.” Except for Material Contracts that have expired or terminated by their terms, as of the date hereof, all of the Material Contracts are (A) valid and binding on the Company or the applicable Subsidiary of the Company, as the case may be, and, to
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the Knowledge of the Company, each other party thereto, and (B) in full force and effect, except as may be limited by bankruptcy, insolvency, moratorium and other similar Applicable Law affecting creditors’ rights generally and by general principles of equity. As of the date hereof, neither the Company nor any Subsidiary of the Company has, and, to the Knowledge of the Company, none of the other parties thereto have, violated any provision of, or committed or failed to perform any act under, and no event or condition exists, which (with or without notice, lapse of time or both) would constitute a default under, the provisions of any Material Contract, except in each case for those violations, acts (or failures to act) and defaults which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect and, as of the date hereof, to the Knowledge of the Company, neither the Company nor any Subsidiary of the Company has received notice of any of the foregoing.
Section 4.15 Taxes. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect:
(a) (i) all Company Returns required to be filed with any Taxing Authority have been filed when due (taking into account extensions) in accordance with all Applicable Laws, (ii) the Company and each of its Subsidiaries have paid (or have had paid on their behalf) all Taxes due and payable (whether or not owing on such Company Return), and (iii) the Company and each of its Subsidiaries have properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor, or other third party;
(b) (i) no deficiencies for Taxes of the Company or any of its Subsidiaries have been assessed by any Taxing Authority, except for deficiencies that have been paid or otherwise resolved, (ii) to the Knowledge of the Company, there is no Proceeding pending or threatened in writing against the Company or any of its Subsidiaries in respect of any Tax, (iii) no claim has been made in writing by a Taxing Authority in a jurisdiction where the Company or any of its Subsidiaries does not file income or franchise Tax Returns that it is or may be subject to taxation by that jurisdiction and (iv) neither the Company nor any of its Subsidiaries has waived any statute of limitations with respect to any Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency, which waiver or extension is currently effective;
(c) there are no Liens for Taxes on any assets of the Company or any of its Subsidiaries, other than Permitted Liens;
(d) since January 1, 2019 through the date hereof, neither the Company nor any of its Subsidiaries was a “distributing corporation” or a “controlled corporation” in a transaction intended to be governed by Section 355 of the Code;
(e) neither the Company nor any of its Subsidiaries has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2);
(f) neither the Company nor any of its Subsidiaries (i) is or has been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code or any group that has filed a combined, consolidated or unitary Tax Return (other than the group of which the Company or one of its Subsidiaries is or was the common parent), (ii) has any liability for the Taxes of any Person (other than any member of an affiliated group of which the Company or one of its Subsidiaries is or was the common parent) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), by contract, or as a transferee or successor, or (iii) has received any private letter ruling or any similar Tax ruling from a Taxing Authority that would remain in effect after the Closing Date;
(g) there are no Tax sharing agreements (other than customary commercial or financial arrangements entered into in the ordinary course of business), with respect to which the Company or any of its Subsidiaries is a party;
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(h) neither the Company nor any of its Subsidiaries will be required to include any amount in taxable income, or exclude any item of deduction or loss from taxable income, for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) installment sale or open transaction disposition made prior to the Closing, (ii) excess loss account or deferred intercompany transaction described in the Treasury Regulations under Section 1502 of the Code (or any similar provision of state, local or foreign Law) relating to transactions occurring prior to the Closing, (iii) prepaid amount received or deferred revenue recognized prior to the Closing, in each case, other than amounts received in the ordinary course of business, (iv) change in method of accounting or adjustment pursuant to Section 481 of the Code (or any similar provision of state, local, or foreign law) for a taxable period ending on or prior to the Closing Date, (v) “closing agreements” described in Section 7121 of the Code (or any similar provision of state, local or foreign Law) executed prior to the Closing, or (vi) by reason of Section 965(a) of the Code or election pursuant to Section 965(h) of the Code (or any similar provision of state, local or foreign law); and
(i) neither the Company nor any of its Subsidiaries has deferred payment of any Taxes (including withholding Taxes) pursuant to any COVID-19 Measures and the Company and each of its Subsidiaries have, to the extent applicable, (i) properly complied with all Applicable Laws in order to defer the amount of the employer’s share of any “applicable employment taxes” under Section 2302 of the CARES Act, and (ii) properly complied with all Applicable Laws and duly accounted for any available Tax credits under any COVID-19 Measures (including Sections 7001 through 7005 of the Families First Coronavirus Response Act and Section 2301 of the CARES Act).
Section 4.16 Employee Benefit Plans.
(a) Section 4.16(a) of the Company Disclosure Schedule contains a correct and complete list identifying each U.S. Employee Plan and each Foreign Employee Plan that is material to the Company and its Subsidiaries, taken as a whole.
(b) Neither the Company nor any ERISA Affiliate of the Company sponsors, maintains or contributes or is obligated to contribute to, or has any current or contingent liability under or with respect to, or has in the past six years sponsored, maintained or contributed or has been obligated to contribute to, any plan subject to Title IV of ERISA or any multiemployer plan within the meaning of Section 3(37) of ERISA.
(c) Each U.S. Employee Plan which is intended to be qualified under Section 401(a) of the Code has received or is permitted to rely upon a favorable determination or opinion letter, or has pending or has time remaining in which to file, an application for such determination from the Internal Revenue Service and, to the Knowledge of the Company, nothing has occurred that would reasonably be expected to adversely affect the qualified status thereof. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect: (i) each U.S. Employee Plan has been funded, administered and maintained, in form and operation, in compliance with its terms and with the requirements prescribed by Applicable Laws, including ERISA and the Code; (ii) no litigation or claim is pending with respect to any U.S. Employee Plan (other than routine claims for benefits) and, to the Knowledge of the Company, no such litigation or claim is threatened in writing; (iii) there are no governmental audits or investigations pending or, to the Knowledge of the Company, threatened in writing in connection with any U.S. Employee Plan; and (iv) neither the Company nor any of its Subsidiaries has incurred, or is reasonably expected to occur, any liability under Section 4975, 4980B, 4980D, 4980H, 6721 or 6722 of the Code.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each Foreign Employee Plan and related trust, if any, has been funded and maintained in compliance with and has been administered in compliance with (A) the Applicable Laws of the subject foreign country and (B) their terms and the terms of any Labor Agreements and (ii) each Foreign Employee Plan which, under the Applicable Laws of the subject foreign country, is required to be registered or approved by any Governmental Authority has been so registered or approved.
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(e) Except as would not be considered material to the Company and its Subsidiaries, taken as a whole, as provided in this Agreement or as required under Applicable Law, the consummation of the transactions contemplated by this Agreement will not (either alone or together with any other event): (i) entitle any employee, officer, director or independent contractor of the Company or any of its Subsidiaries to any severance pay or benefits under any Company Employee Plan; (ii) accelerate the time of payment or vesting of any compensation or equity-based award; (iii) trigger any funding (through a grantor trust or otherwise) of compensation or benefits under any Company Employee Plan; (iv) trigger any payment, increase the amount payable or trigger any other obligation pursuant to any Company Employee Plan; or (v) result in any forgiveness of indebtedness of any employee, officer, director or independent contractor.
(f) Except as would not be considered material to the Company and its Subsidiaries, taken as a whole, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement would (either alone or in conjunction with any other event) give rise to the payment of any amount by the Company or any of its Subsidiaries that would not be deductible pursuant to the terms of Section 280G of the Code.
(g) Each Company Employee Plan that constitutes in any part a nonqualified deferred compensation plan within the meaning of Section 409A of the Code has been operated and maintained in all material respects in operational and documentary compliance with Section 409A of the Code and applicable guidance thereunder.
(h) Neither the Company nor any of its Subsidiaries has any obligation to gross-up, indemnify, reimburse or otherwise make whole any current or former employee, officer, director or independent contractor for any Tax or related interest or penalties incurred by such individual, including under Sections 409A or 4999 of the Code.
Section 4.17 Labor and Employment Matters.
(a) The Company and its Subsidiaries are, and for the past three years have been, in compliance in all material respects with all federal, state, and foreign Applicable Laws respecting labor, employment, and employment practices, including terms and conditions of employment, wages and hours (including the classification of independent contractors and exempt and non-exempt employees), health and safety, immigration (including the completion of Forms I-9 for all employees and the proper confirmation of employee visas), employment harassment, discrimination or retaliation, whistleblowing, disability rights or benefits, equal opportunity, plant closures and layoffs (including the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar Applicable Laws (collectively, the “WARN Act”)), employee trainings and notices, workers’ compensation, labor relations, employee leave issues, COVID-19, affirmative action and unemployment insurance, Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act, as amended, and state anti-discrimination laws. To the Knowledge of the Company, (i) there are no audits or investigations pending or scheduled by any Governmental Authority pertaining to labor or the employment practices of the Company, and (ii) during the last three years, no complaints relating to employment practices of the Company have been made to any Governmental Authority.
(b) Neither the Company nor any Subsidiary of the Company is a party to, or otherwise bound by, any Labor Agreement, and no employees of the Company or any Subsidiary of the Company are represented by any labor union, works council, or other labor organization with respect to their employment with the Company or any Subsidiary of the Company. To the Knowledge of the Company, neither the Company nor any Subsidiary of the Company is subject to any charge, demand, petition or representation Proceeding seeking to compel, require or demand it to bargain with any labor union, works council or labor organization. There are, and for the past three years there have been, no pending or, to the Knowledge of the Company, threatened labor organizing activities with respect to any employees of the Company or any Subsidiary of the Company. There is no, and for the past three years there has been no, pending or, to the Knowledge of the Company, threatened unfair labor practice charge, material labor grievance, material labor arbitration, strike, lockout, walkout, slowdown, work stoppage, picketing, handbilling, or other material labor dispute against or involving the Company or any Subsidiary of the Company.
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(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect: (i) the Company and its Subsidiaries have fully and timely paid all wages, salaries, wage premiums, commissions, bonuses, severance and termination payments, fees, and other compensation that have come due and payable to their current or former employees and independent contractors under Applicable Law or Contract; and (ii) each individual who is providing or within the past three years has provided services to the Company and its Subsidiaries and is or was classified and treated as (A) an exempt or non-exempt employee, or as (B) an independent contractor, consultant, leased employee, or other non-employee service provider, is and has been properly classified and treated as such for all applicable purposes.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries have reasonably investigated all sexual harassment, or other discrimination, retaliation or policy violation allegations of which the Company has Knowledge and, with respect to each such allegation with potential merit, the Company and its Subsidiaries have taken prompt corrective action that is reasonably calculated to prevent further improper action. To the Knowledge of the Company, the Company and its Subsidiaries do not reasonably expect any material Liabilities with respect to any such allegations described in the preceding sentence. To the Knowledge of the Company, no material allegations of discrimination or sexual harassment have been made against any employee of the Company or any of its Subsidiaries at a level of Vice President or above.
(e) No employee layoff, facility closure or shutdown, reduction-in-force, furlough, temporary layoff, or reduction in salary or wages affecting employees of the Company or any Subsidiary of the Company has occurred since March 1, 2020 or is currently contemplated, planned or announced, including as a result of COVID-19. The Company and its Subsidiaries have not otherwise experienced any material employment-related liability with respect to COVID-19.
Section 4.18 Insurance. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect: (a) all insurance policies maintained by the Company and its Subsidiaries are in full force and effect and all premiums due and payable thereon have been paid; (b) neither the Company nor any of its Subsidiaries is in breach of or default under any of such insurance policies; and (c) since January 1, 2019, the Company has not received any written notice of termination or cancelation or denial of coverage with respect to any insurance policy.
Section 4.19 Environmental Matters. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect:
(a) the Company and its Subsidiaries are and for the last three years have been in compliance with all Environmental Laws;
(b) the Company and its Subsidiaries hold all Environmental Permits required for the operation of the business of the Company and its Subsidiaries and are, and for the last three years have been, in compliance with the terms and conditions of such Environmental Permits;
(c) (i) in the last three years (or earlier if unresolved), the Company and its Subsidiaries have not received any written notice, Order, directive or information request, and (ii) as of the Closing Date, no Proceeding, claim or written notice is pending, or to the Knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries, in each case, alleging that the Company or any of its Subsidiaries is in violation of, or has liability under, any Environmental Law;
(d) there has been no release, treatment, storage, disposal of, arrangement for or permitting the disposal of, transportation, handling, manufacture, or distribution of, or exposure of any person to, any Hazardous Substance as a result of the operation of the business of the Company and its Subsidiaries or, to the Knowledge of the Company, otherwise, in each case so as to give rise to any liability (contingent or otherwise) of the Company or its Subsidiaries pursuant to any Environmental Law;
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(e) the Company and its Subsidiaries have not contractually assumed, or provided an indemnity with respect to, the liability (contingent or otherwise) of any other Person under Environmental Law; and
(f) the Company, and its Subsidiaries have made available to Parent all environmental audits, reports, and assessments and all other material environmental, health and safety documents, in each case prepared in the last three years, relating to the past or current properties, facilities, or operations of the Company and its Subsidiaries that are in the Company’s or its Subsidiary’s possession or reasonable control.
Section 4.20 Intellectual Property.
(a) Section 4.20(a) of the Company Disclosure Schedule contains a complete and accurate list as of the date hereof of all Patents, pending applications to register Patents, registered Marks, pending applications to register Marks and registered Copyrights and pending applications to register Copyrights, and domain name registrations in each such case that are owned or purported to be owned by the Company or any of its Subsidiaries as of the date hereof. The Company and its Subsidiaries exclusively own the Company Intellectual Property listed on Section 4.20(a) of the Company Disclosure Schedule, free and clear of all Liens, other than Permitted Liens, and all such material Company Intellectual Property is valid, subsisting and to the Knowledge of the Company, enforceable.
(b) All Patents, Marks and Copyrights owned by, or purported to be owned by, the Company and its Subsidiaries that are issued by, or registered or the subject of an application filed with, as applicable, the U.S. Patent and Trademark Office, the U.S. Copyright Office or any similar office or agency anywhere in the world have been duly maintained (including the payment of maintenance fees) and are not expired, canceled or abandoned, except for such issuances, registrations or applications that the Company or any of its Subsidiaries has permitted to expire or has canceled or abandoned in its reasonable business judgment or except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) The Company and its Subsidiaries exclusively own the Company Intellectual Property and, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, possess a valid and enforceable written license to use all other Intellectual Property that is used in or necessary for the operation of the business of the Company and its Subsidiaries, in each case free and clear of all Liens, other than Permitted Liens. The Company and its Subsidiaries have required all Persons who have participated in development of the Company Intellectual Property to execute a written assignment agreement conveying ownership of such Company Intellectual Property to the Company or one of its Subsidiaries, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(d) Since January 1, 2019 through the date hereof, there have been, and as of the date hereof there are, no legal disputes or claims pending, or, to the Knowledge of the Company, threatened, alleging infringement, misappropriation, dilution, or other violation of any Intellectual Property of any Person (“Third Party Rights”) by the Company or any of its Subsidiaries, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(e) The Company and its Subsidiaries and the operation of the business of the Company and its Subsidiaries as currently conducted do not infringe, misappropriate, dilute, or otherwise violate, and have not since January 1, 2019 infringed, misappropriated, diluted or otherwise violated, any Third Party Right, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(f) To the Knowledge of the Company, there is no infringement, misappropriation, dilution, or other violation by any Person of any of the Company Intellectual Property except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
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(g) The Company and its Subsidiaries have taken commercially reasonable security measures to protect the confidentiality of Trade Secrets included in the Company Intellectual Property, including using commercially reasonable efforts to require all Persons who have accessed such Trade Secrets to execute a proprietary information and confidentiality agreement calling for nondisclosure of such Trade Secrets. The Company and its Subsidiaries have not disclosed, delivered, licensed or otherwise made available, and do not have a duty or obligation (whether present, contingent, or otherwise) to disclose, deliver, license, or otherwise make available, any source code for Company Products to any Person, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(h) No Company Product owned or purported to be owned by the Company or its Subsidiaries contains, incorporates, links or calls to any Open Source Software in a manner that obligates the Company or its applicable Subsidiary to disclose, make available, offer or deliver any portion of the source code of such product or component thereof to any third party other than the applicable Open Source Software, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(i) Except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, since January 1, 2019, (i) to the Knowledge of the Company, there has been no performance reduction, breakdown, bug in, security breach of, unauthorized or unlawful access to, unauthorized or unlawful use of, or malicious code in, or unauthorized or unlawful destruction, damage, disclosure, loss corruption, alternation or use of any of the computer systems, servers, network equipment and other computer hardware owned, leased or licensed by the Company or any of its Subsidiaries (the “Business Systems”), (ii) to the Knowledge of the Company, there has been no breach of any Personal Information processed by or on behalf of the Company or any of its Subsidiaries and (iii) neither the Company or any of its Subsidiaries have received any written notice, Order, complaint or other correspondence from any Governmental Authority, data subject or other person alleging a breach of, or non-compliance with, the Privacy Laws and, to the Knowledge of the Company, no circumstances exist which are likely to result in any such notice, Order, complaint or other correspondence being sent, served, given or made.
(j) There are no defects in any of the products of the Company or its Subsidiaries that would prevent the same from performing materially in accordance with the Company and its Subsidiaries’ obligations to customers under written customer agreements, except as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The Company and its Subsidiaries own, lease, license, or otherwise have the legal right to use all Business Systems, and such Business Systems are sufficient for the immediate and reasonably anticipated future needs of the business of the Company and its Subsidiaries as it is currently conducted, except in each case as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The Company and its Subsidiaries have implemented and maintain reasonable security, disaster recovery, and business continuity plans, procedures, and facilities that provide regular monitoring and alerting of any problems or issues with the Business Systems, and such plans and procedures have been proven effective upon testing, except in each case as would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(k) For purposes of this Section 4.20 and as otherwise used in this Agreement:
(i) “Company Intellectual Property” means all material Intellectual Property owned or purported to be owned by the Company and its Subsidiaries and used by the Company and its Subsidiaries in the business of the Company and its Subsidiaries as of the date hereof.
(ii) “Company Products” means all software and other products, including any of the foregoing currently in development, from which the Company has derived within the three years preceding the date hereof, is currently deriving or is scheduled to derive, revenue from the sale, license, maintenance or provision thereof.
(iii) “Intellectual Property” means all intellectual property and other proprietary rights of any kind throughout the world, including, without limitation:
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(A) patents and patent applications and inventions and improvements thereof (collectively, “Patents”);
(B) trade names, trade dress rights, logos, slogans, Internet domain names, registered and unregistered trademarks and service marks and related registrations and applications for registration (including intent-to-use applications) and all goodwill associated with any of the foregoing (collectively, “Marks”);
(C) copyrights in both published and unpublished works, including all works of authorship, mask works compilations, databases and computer programs, manuals and other documentation, all rights in software (whether in source code or object code form), and all copyright registrations and applications (collectively, “Copyrights”); and
(D) rights in trade secrets, know-how and related confidential information, including inventions, discoveries and invention disclosures, improvements, research in progress, algorithms, data, databases, data collections, designs, processes, formulae, schematics, blueprints, flow charts, models, strategies and prototypes, and rights of privacy and publicity (collectively, “Trade Secrets”).
(iv) “Open Source Software” means any software (in source or object code form) that is subject to (A) a license or other agreement commonly referred to as an open source, free software, copyleft or community source code license (including any code or library licensed under the GNU General Public License, GNU Lesser General Public License, BSD License, Apache Software License, or any other public source code license arrangement) or (B) any other license or other agreement that requires, as a condition of the use, modification or distribution of software subject to such license or agreement, that such software or other software linked with, called by, combined or distributed with such software be (1) disclosed, distributed, made available, offered, licensed or delivered in source code form, (2) licensed for the purpose of making derivative works, (3) licensed under terms that allow reverse engineering, reverse assembly, or disassembly of any kind, or (4) redistributable at no charge, including any license defined as an open source license by the Open Source Initiative as set forth on www.opensource.org.
(a) Section 4.21(a) of the Company Disclosure Schedule sets forth a true and complete list of all real property owned in fee by the Company or any of its Subsidiaries (collectively, the “Company Owned Real Property”), and the address for each Company Owned Real Property. With respect to each Company Owned Real Property: (A) the Company or any of its Subsidiaries, as the case may be, holds good, marketable, and valid fee title to the Company Owned Real Property, free and clear of all Liens, except for Permitted Liens; (B) the Company or applicable Subsidiary has not leased or otherwise granted to any Person the right to use or occupy such Company Owned Real Property or any portion thereof; and (C) other than the right of Parent pursuant to this Agreement, there are no outstanding options, rights of first offer or rights of first refusal to purchase such Company Owned Real Property or any portion thereof or interest therein. Neither the Company nor any Subsidiary is a party to any agreement or option to purchase any real property or interest therein.
(b) Section 4.21(b) of the Company Disclosure Schedule sets forth a true and complete list of any real property leased, subleased or otherwise occupied by the Company or any of its Subsidiaries (excluding shared services space) that is material to the Company and its Subsidiaries, taken as a whole (collectively, the “Company Leased Real Property” and together with the Company Owned Real Property, the “Real Property”) (including the date and name of the parties to such lease document), and the address for each Company Leased Real Property. The Company has delivered to Parent a true and complete copy of each such lease document with annual rental payment obligations in excess of $1,000,000 (including any material amendments or modifications with respect thereto). Except as would not be material to the Company and its Subsidiaries, taken as a whole, with respect to each of the leases for the Company Leased Real Property: (A) such lease is legal, valid, binding, and enforceable against the Company or applicable Subsidiary of the Company, as the case may be, and to the Knowledge of the Company, the other party thereto and in full force
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and effect, except as may be limited by bankruptcy, insolvency, moratorium and other similar Applicable Law affecting creditors’ rights generally and by general principles of equity; (B) the Company’s or Subsidiary’s possession and quiet enjoyment of the Company Leased Real Property under such lease has not been disturbed, and to the Knowledge of the Company, there are no disputes with respect to such lease; (C) neither the Company or applicable Subsidiary nor, to the Knowledge of the Company, any other party to the lease is in breach or default under such lease, and to the Knowledge of the Company, no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under such lease; (D) the other party to such lease is not an affiliate of, and to the Knowledge of the Company, otherwise does not have any economic interest in, the Company or any Subsidiary; (E) the Company or Subsidiary has not subleased, licensed or otherwise granted any Person the right to use or occupy such Company Leased Real Property or any portion thereof; and (F) other than Permitted Liens, the Company or Subsidiary has not collaterally assigned or granted any other security interest in such lease or any interest therein.
(c) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and its Subsidiaries have title to, or a valid leasehold interest in, the Real Property as necessary to permit the Company and its Subsidiaries to conduct their business in the ordinary course as currently conducted and (ii) there is no condemnation, expropriation or other proceeding in eminent domain pending or, to the Knowledge of the Company, threatened, affecting any Real Property or any portion thereof or interest therein and there is no Order outstanding, nor any Proceedings pending or, to the Knowledge of the Company, threatened, relating to the ownership, lease, use or occupancy of the Real Property or any portion thereof by the Company and its Subsidiaries.
(d) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries have title to, or a valid leasehold interest in, all material tangible personal property as necessary to permit the Company and its Subsidiaries to conduct their business in the ordinary course as currently conducted.
Section 4.22 Data Privacy. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and its Subsidiaries are, and, since January 1, 2019, have been, in compliance with all Privacy Laws, the Company’s and its Subsidiaries’ internal and published external privacy policies, industry standards applicable to the industry in which the Company and its Subsidiaries operate (including PCI-DSS) and the requirements of any Contract to which the Company or any of its Subsidiaries is a party, in each case in connection with the Company’s and its Subsidiaries’ collection, storage, transfer, use and/or processing of any Personal Information, (ii) the Company and its Subsidiaries have commercially reasonable and adequate physical, technical, organizational and administrative security measures and policies in place to protect all Personal Information collected or otherwise processed by them or on their behalf from and against unauthorized or unlawful access, use, destruction, damage, loss, corruption, alteration and/or disclosure, and (iii) the Company and its Subsidiaries are and have been in compliance with all Privacy Laws relating to data loss, theft and personal data breach or breach of security notification obligations.
Section 4.23 Government Contracts. Since January 1, 2019, except as would not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole, neither the Company nor its Subsidiaries have (a) breached or violated any Applicable Law, certification, representation, clause, provision or requirement pertaining to any Government Contract; (b) been suspended or debarred from bidding on government contracts by a Governmental Authority; (c) been audited or investigated by any Governmental Authority with respect to any Government Contract; (d) conducted or initiated any internal investigation or made any disclosure with respect to any alleged or potential irregularity, misstatement or omission arising under or relating to a Government Contract; (e) received from any Governmental Authority any written notice of breach, cure, show cause or default with respect to any Government Contract; or (f) had any Government Contract terminated for default or failure to perform. The Company and its Subsidiaries have established and maintained adequate internal controls for compliance in all material respects with their respective Government Contracts. Since
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January 1, 2019, all invoices and claims for payment submitted by the Company and its Subsidiaries with respect to Government Contracts were current, accurate and complete in all material respects as of their respective submission dates. As of the date hereof, there are no material outstanding claims or disputes in connection with any of the Company’s or any of its Subsidiaries’ Government Contracts. To the Knowledge of the Company, there are no outstanding or unsettled allegations of fraud, false claims or overpayments with regard to any of the Company’s or its Subsidiaries’ Government Contracts. The Company and its Subsidiaries have complied in all material respects with all applicable U.S. National Security obligations with respect to their respective Government Contracts, including those specified in the NISPOM.
Section 4.24 Brokers’ Fees. Except for Qatalyst Partners, L.P., there are no investment bankers, brokers or finders that have been retained by or are authorized to act on behalf of the Company or any of its Subsidiaries who are entitled to any banking, broker’s, finder’s or similar fee or commission in connection with the Merger and the other transactions contemplated by this Agreement. The Company has Made Available to Parent a true, complete and correct copy of the Qatalyst Partners, L.P. engagement letter.
Section 4.25 Opinion of Financial Advisor. The Company Board has received from Qatalyst Partners, LP an opinion, dated as of the date hereof, to the effect that, as of such date and based upon and subject to the various assumptions made, procedures followed, qualifications, limitations and other matters considered in connection with the preparation of such opinion as set forth therein, the Merger Consideration to be received pursuant to, and in accordance with, the terms of this Agreement by the holders of shares of Company Common Stock (other than Parent and any affiliate of Parent) is fair, from a financial point of view, to such holders. As of the date of this Agreement, the foregoing opinion has not been withdrawn, revoked or modified in any respect. A signed copy of such opinion shall be delivered to Parent as soon as practicable after receipt thereof by the Company, for information purposes only.
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