Braze, Inc DEFA14A, filed Oct 20, 2026
Braze, Inc. (BRZE)
Braze agreed on October 19, 2026 to be acquired by Salesforce through a merger in which each Class A common share receives $47.50 in cash. Closing requires stockholder approval, with termination fees of $300,000,000 or $191,390,000 depending on the trigger. AI summary
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
FORM 8-K
____________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2026
____________________________
Braze, Inc.
(Exact Name of Registrant as Specified in Its Charter)
____________________________
| Delaware | 001-41065 | 45-2505271 |
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 63 Madison Building 28 East 28th Street, Floor 12 New York, New York 10016 (Address of Principal Executive Offices, Including Zip Code) |
(609) 964-0585
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☒ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Securities | registered pursuant to Section 12(b) of the Act: |
|
Title of each class |
Trading |
Name
of each exchange | ||
| Class A Common Stock, par value $0.0001 per share | BRZE | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On October 19, 2026, Braze, Inc., a Delaware corporation (“Braze” or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Salesforce, Inc., a Delaware corporation (“Parent”), and Banff Acquisition Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of Parent (the “Merger”). The Merger Agreement has been unanimously approved by the board of directors of the Company (the “Company Board”). Capitalized terms used herein without definition have the meanings specified in the Merger Agreement.
Consideration to Company Stockholders. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, at the effective time of the Merger (the “Effective Time”), each share of Class A common stock, par value $0.0001 per share, of the Company (“Class A Common Stock”) issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares, Cancelled Shares or Converted Shares) will be converted into the right to receive $47.50 per share in cash, without interest (the “Per Share Merger Consideration”). From and after the Effective Time, all shares of Class A Common Stock (other than any Dissenting Shares, Cancelled Shares or Converted Shares) shall cease to be issued and outstanding and shall automatically be cancelled and retired and shall cease to exist.
Treatment of Company Equity Awards. The Merger Agreement provides that, at the Effective Time:
| · | Each option to purchase Class A Common Stock granted under either the Company’s 2021 Equity Incentive Plan or the Company’s Amended and Restated 2011 Equity Incentive Plan (together, the “Company Equity Plans”) that has a per share exercise price that is less than the amount of the Per Share Merger Consideration (each, an “In-the-Money Company Option”) that is outstanding and unexercised will be cancelled, and the holder thereof will be entitled to receive an amount equal to the Per Share Merger Consideration in respect of each share covered by such option after withholding shares to cover the exercise price (as determined in accordance with the formula in the Merger Agreement), without interest and less applicable tax withholdings. |
| · | Each option to purchase Class A Common Stock granted under any Company Equity Plan that is not an In-the-Money Company Option and that is then outstanding and unexercised, whether or not vested, will be cancelled without payment. |
| · | Each restricted stock unit award relating to shares of Class A Common Stock granted under any Company Equity Plan that is outstanding and subject solely to service-based vesting requirements (each, a “Company RSU”) and that (i) is held by a non-employee member of the Company Board or (ii) is vested (each, a “Director or Vested Company RSU”) will be cancelled, and the holders thereof will be entitled to receive an amount equal to the Per Share Merger Consideration in respect of each share of Class A Common Stock subject to such Company RSU immediately prior to the Effective Time, without interest and less applicable tax withholdings. |
| · | Each Company RSU that is not a Director or Vested Company RSU and that is outstanding will be assumed and converted automatically into a restricted stock unit with respect to shares of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”) (each, an “Adjusted RSU”) based on the conversion ratio set forth in the Merger Agreement, on the same terms and conditions as the applicable Company RSU, provided that Parent will have the ability to determine that awards held by certain non-U.S. employees will either be converted to cash awards or cashed out at the Effective Time. |
| · | Each restricted stock unit award relating to shares of Class A Common Stock granted under any Company Equity Plan that is outstanding, unvested and subject to performance-based and service-based vesting requirements (each, a “Company PSU”) will be assumed and converted automatically into an Adjusted RSU based on the conversion ratio set forth in the Merger Agreement and (i) with respect to any performance period completed prior to the Closing Date (including the fiscal year beginning February 1, 2026, if the Closing Date is on or after February 1, 2027), based on actual performance and (ii) with respect to any performance period not completed prior to the Closing Date, the target level of performance (except that if the Closing Date occurs prior to February 1, 2027, the number of Company PSUs earned for the performance period beginning February 1, 2026 shall be determined based on the greater of (x) the target level of performance and (y) actual performance), on the same terms and conditions (excluding any performance-based vesting conditions) as the applicable Company PSU. |
| · | Notwithstanding the treatment of Class A Common Stock described above, (i) certain shares of Class A Common Stock held by specified individuals that are unvested (each, an “Assumed Company Restricted Share”) will be assumed and converted automatically into an award covering shares of restricted Parent Common Stock based on the conversion ratio set forth in the Merger Agreement, on the same terms and conditions as the applicable Assumed Company Restricted Share, and (ii) certain shares of Class A Common Stock held by other specified individuals that are unvested will be converted into the right to receive an amount equal to the Per Share Merger Consideration, without interest and less applicable tax withholdings. |
| · | The Company’s 2021 Employee Stock Purchase Plan (the “Company ESPP”) will be terminated effective immediately prior to the Effective Time. No employee who is not already a participant in the current offering period under the Company ESPP as of the date of the Merger Agreement may become a participant therein, and no current participant may increase his or her payroll deduction election from that in effect on the date of the Merger Agreement. If the current offering period under the Company ESPP terminates prior to the Effective Time, no new offering period will commence thereafter. If the current offering period under the Company ESPP is still in effect at the Effective Time, the last day of such offering period will be accelerated to a date that is no later than three business days prior to the Closing Date. |
Conditions to Closing. Under the terms of the Merger Agreement, the completion of the Merger is subject to certain customary closing conditions, including, among others, (a) the approval of the Merger and adoption of the Merger Agreement by the affirmative vote of the holders of at least a majority of the outstanding shares of Class A Common Stock, (b) the accuracy of the parties’ respective representations and warranties in the Merger Agreement, subject to specified materiality qualifications, (c) compliance by the parties with their respective covenants in the Merger Agreement in all material respects, (d) the absence of any law or order restraining, enjoining, or otherwise prohibiting the consummation of the Merger or imposing a Burdensome Condition, (e) the expiration of the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and receipt of other approvals under specified antitrust and foreign investment laws, and (f) the absence of a Company Material Adverse Effect on or after the date of the Merger Agreement that is continuing as of immediately prior to the Closing.
Representations, Warranties and Covenants. The Merger Agreement contains customary representations, warranties and covenants made by each of the Company, Parent and Merger Sub, including, among others, covenants by the Company regarding the conduct of its business during the pendency of the transactions contemplated by the Merger Agreement, public disclosures and other matters. The Company is required, among other things, not to solicit alternative business combination transactions and, subject to limited exceptions, not to engage in discussions or negotiations regarding an alternative business combination transaction. The Company is required to convene a meeting of its stockholders to vote on the adoption of the Merger Agreement.
Termination Rights. Both the Company and Parent may terminate the Merger Agreement under certain specified circumstances, including (a) by mutual written consent of the Company and Parent, (b) by either party, if the Merger is not consummated by the first anniversary of the date of the Merger Agreement, subject to one extension of up to 90 days and one additional extension of up to 90 days, in order to obtain required regulatory approvals (the “Outside Date”), (c) by either party, if the approval of the Merger by the Company stockholders is not obtained, (d) by Parent, if, prior to the time that the Company obtains approval of the Merger from the Company stockholders, the Company Board makes a change of recommendation with respect to the proposed transaction or materially breaches its no-shop obligations, (e) by the Company, if, prior to the time that the Company obtains approval of the Merger from the Company stockholders, the Company Board makes a change of recommendation with respect to the proposed transaction and substantially concurrently enters into a superior proposal, (f) by either party, if a governmental authority of competent jurisdiction has issued a final and non-appealable order preventing the consummation of the Merger, or (g) by either party, if the other party breaches its representations, warranties or covenants in the Merger Agreement, such that the applicable conditions to Closing set forth in the Merger Agreement would not be satisfied, subject in certain cases, to the right of the breaching party to cure the breach.
In certain specified circumstances in connection with the termination of the Merger Agreement, including, subject to the limitations set forth in the Merger Agreement, if the Merger Agreement is terminated by Parent or the Company (i) because the Merger has not been consummated by the Outside Date or (ii) because a final, non-appealable injunction or applicable regulatory law permanently prohibits the Merger, and certain other requirements specified in the Merger Agreement are met, Parent will be required to pay the Company a termination fee equal to $300,000,000 in cash. In certain specified circumstances in connection with the termination of the Merger Agreement, including, subject to the limitations set forth in the Merger Agreement, if the Company does not obtain approval of the Merger from the Company stockholders, if the Company Board changes or withdraws its recommendation of the Merger to the Company stockholders or if the Company Board terminates the Merger Agreement to enter into an agreement with respect to a superior proposal, the Company will be required to pay Parent a termination fee equal to $191,390,000 in cash.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K (“8-K”) and incorporated by reference herein.
The Merger Agreement and the above description have been included to provide investors with information regarding the terms of the agreement. They are not intended to provide any other factual information about the Company, Parent or their respective subsidiaries or affiliates or stockholders. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures exchanged between the parties for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, Parent, Merger Sub or any of their respective subsidiaries, affiliates, businesses, or stockholders. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company or Parent. Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information about the Company or Parent and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the U.S. Securities and Exchange Commission (“SEC”).
Voting and Support Agreement
Concurrently with the execution of the Merger Agreement, certain Company stockholders (each, a “Company Support Party” and collectively, the “Company Support Parties”) entered into a voting and support agreement (the “Voting and Support Agreement”) with Parent, pursuant to which, among other things, and subject to the terms of the Voting and Support Agreement, each such Company Support Party agreed to vote all shares of Class A Common Stock owned by such Company Support Party, (i) in favor of the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and (ii) against any acquisition proposal or any action or agreement that is in opposition to the Merger. The Voting and Support Agreement terminates upon certain events, including the termination of the Merger Agreement in accordance with its terms.
The foregoing summary of the Voting and Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Voting and Support Agreement, a copy of which is filed as Exhibit 99.1 to this 8-K and incorporated herein by reference. The Voting and Support Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company or the Company Support Parties. Moreover, the representations and warranties in the Voting and Support Agreement were used for the purposes of allocating risk between the Company and the Company Support Parties rather than establishing matters of fact. Accordingly, the representations and warranties in the Voting and Support Agreement should not be relied on as characterization of the actual state of facts about the Company or any of the Company Support Parties.
Item 8.01 Other Events
On October 20, 2026, Parent and the Company issued a joint press release announcing entry into the Merger Agreement. A copy of the press release is attached as Exhibit 99.2 to this 8-K and incorporated herein by reference.
Forward-Looking Statements
This 8-K contains forward-looking statements, including, but not limited to, statements related to the proposed acquisition of the Company by Parent. Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” “will”, “commitments,” variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon Parent’s and the Company’s current plans, assumptions, beliefs, and expectations. Forward-looking statements are subject to the occurrence of many events outside of Parent’s and the Company’s control. Actual results and the timing of events may differ materially from those contemplated by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties.
These risks and uncertainties include, among other things, statements regarding the expected benefits to Parent, the Company and their respective customers from completing the transaction, plans for future investment and capital allocation, the expected financial performance of Parent following the expected completion of the transaction, and the expected completion of the transaction. Statements regarding future events are based on the parties’ current expectations, estimates and projections and are necessarily subject to associated risks related to, among other things, (i) the completion of the proposed transaction on the anticipated terms and timing, or at all, including the parties’ ability to obtain regulatory approvals and the requisite vote by the Company shareholders and satisfy other conditions to the completion of the transaction, (ii) the effect of the announcement or pendency of the proposed transaction on the Company’s business, operating results, ability to retain and hire key personnel, and relationships with customers, suppliers, competitors and others, (iii) risks that the proposed transaction may disrupt the Company’s current plans and business operations or divert management’s attention from ongoing business operations, (iv) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (v) the risk that the Merger Agreement may be terminated in circumstances requiring Parent or the Company to pay a termination fee, (vi) the risk and outcome of any legal or regulatory proceedings related to the transaction, (vii) the potential effects on the accounting of the proposed transaction, (viii) legislative, regulatory and economic developments, (ix) general economic conditions, (x) restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions, (xi) the retention of key personnel, (xii) the ability of Parent to successfully integrate the Company’s market opportunities, technology, personnel and operations and to achieve expected benefits, including the possibility that the expected benefits from the transaction will not be realized or will not be realized within the expected time period, (xiii) the possibility that competing offers may be made, (xiv) negative effects of the announcement or the consummation of the proposed acquisition on the market price of Parent’s common stock and/or operating results, (xv) significant transaction costs and expenses, and (xvi) unknown liabilities.
For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Parent’s and the Company’s respective periodic reports and other filings with the SEC, including the risk factors identified in Parent’s and the Company’s most recent Annual Reports on Form 10-K, available at www.sec.gov. The forward-looking statements included in this 8-K are made only as of the date hereof. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. Neither Parent nor the Company undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Additional Information and Where to Find It
This 8-K is being made in respect of a proposed transaction involving Parent and the Company. In connection with the proposed transaction, the Company intends to file relevant materials with the SEC, including a preliminary proxy statement on Schedule 14A. The information in the preliminary proxy statement will not be complete and may be changed. The Company will deliver the definitive proxy statement to its shareholders as required by applicable law. This 8-K does not constitute a solicitation of any vote or approval and is not a substitute for any proxy statement or any other document that may be filed with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS THERETO, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by the Company (when they become available) may also be obtained free of charge from the Company’s investor relations website at investors.braze.com.
Participants in the Solicitation
The Company and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the Company’s directors and executive officers is available in the Company’s proxy statement for the 2026 annual meeting of stockholders, which was filed with the SEC on May 18, 2026 (the “2026 Annual Meeting Proxy Statement”, which is available at sec.gov/Archives/edgar/data/1676238/000114036126021908/ny20068382x2_def14a.htm#tIRD), and in other documents filed by the Company with the SEC. Please refer to the sections captioned “Information Regarding Director Nominees and Current Directors,” “Information Regarding the Board of Directors and Corporate Governance,” “Executive Officers,” “Compensation Discussion and Analysis,” “Pay Versus Performance,” “Non-Employee Director Compensation” and “Security Ownership of Certain Beneficial Owners and Management” in the 2026 Annual Meeting Proxy Statement. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement relating to the proposed transaction and other relevant materials to be filed with the SEC in connection with the proposed transaction when they become available. Free copies of the proxy statement relating to the proposed transaction and such other materials may be obtained as described in the preceding paragraph.
No Offer or Solicitation
This 8-K is for informational purposes only and is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit |
Description | |
| 2.1* | Agreement and Plan of Merger, dated as of October 19, 2026, by and among the Company, Parent and Banff Acquisition Sub Inc. | |
| 99.1 | Voting and Support Agreement, dated as of October 19, 2026, by and among Parent and each of the persons set forth on Schedule A thereto | |
| 99.2 | Joint Press Release issued by Salesforce, Inc. and Braze, Inc., dated as of October 20, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Certain schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRAZE, INC. | |||
| Date: October 20, 2026 | By: | /s/ Christopher M. Lal | |
| Name: | Christopher M. Lal | ||
| Title: | General Counsel & Corporate Secretary | ||
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
SALESFORCE, INC.,
BANFF ACQUISITION SUB INC.,
and
BRAZE, INC.
dated as of
October 19, 2026
TABLE OF CONTENTS
Page
| ARTICLE I THE MERGER | 2 | |
| Section 1.1. | The Merger | 2 |
| Section 1.2. | Effect of the Merger | 2 |
| Section 1.3. | The Closing | 2 |
| Section 1.4. | Effective Time | 2 |
| Section 1.5. | Governing Documents | 2 |
| Section 1.6. | Officers and Directors | 3 |
| ARTICLE II TREATMENT OF SECURITIES | 3 | |
| Section 2.1. | Treatment of Capital Stock | 3 |
| Section 2.2. | Payment for Securities; Surrender of Certificates | 4 |
| Section 2.3. | Treatment of Company Equity Awards and the Company ESPP | 7 |
| Section 2.4. | Withholding | 9 |
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 9 | |
| Section 3.1. | Qualification, Organization, Subsidiaries, etc. | 9 |
| Section 3.2. | Capitalization | 10 |
| Section 3.3. | Corporate Authority | 12 |
| Section 3.4. | Governmental Consents; No Violation | 13 |
| Section 3.5. | SEC Reports and Financial Statements | 14 |
| Section 3.6. | Internal Controls and Procedures | 15 |
| Section 3.7. | No Undisclosed Liabilities | 16 |
| Section 3.8. | Absence of Certain Changes or Events | 17 |
| Section 3.9. | Compliance with Law; Permits | 17 |
| Section 3.10. | Employee Benefit Plans | 19 |
| Section 3.11. | Labor Matters | 21 |
| Section 3.12. | Tax Matters | 22 |
| Section 3.13. | Litigation; Orders | 24 |
| Section 3.14. | Intellectual Property | 24 |
| Section 3.15. | Privacy and Data Protection | 28 |
| Section 3.16. | Real and Personal Property | 30 |
| Section 3.17. | Material Contracts | 31 |
| Section 3.18. | Environmental Matters | 34 |
| Section 3.19. | Customers; Suppliers; Resellers; Government Entities | 34 |
| Section 3.20. | Insurance | 35 |
| Section 3.21. | Information Supplied | 35 |
| Section 3.22. | Opinion of Financial Advisor | 35 |
| Section 3.23. | State Takeover Statutes; Anti-Takeover Laws | 36 |
| Section 3.24. | Related Party Transactions | 36 |
| Section 3.25. | Finders and Brokers | 36 |
| Section 3.26. | No Other Representations | 36 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 37 | |
| Section 4.1. | Qualification, Organization, etc. | 37 |
| Section 4.2. | Corporate Authority | 37 |
| Section 4.3. | Governmental Consents; No Violation | 38 |
| Section 4.4. | Litigation; Orders | 39 |
| Section 4.5. | Information Supplied | 39 |
| Section 4.6. | Sufficient Funds | 39 |
| Section 4.7. | Finders and Brokers | 39 |
| Section 4.8. | Stock Ownership | 39 |
| Section 4.9. | No Other Representations | 39 |
| ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER | 40 | |
| Section 5.1. | Conduct of Business by the Company Pending the Closing | 40 |
| Section 5.2. | No Solicitation by the Company | 46 |
| Section 5.3. | Preparation of Proxy Statement; Company Stockholders Meeting | 51 |
| ARTICLE VI ADDITIONAL AGREEMENTS | 53 | |
| Section 6.1. | Access; Confidentiality; Notice of Certain Events | 53 |
| Section 6.2. | Reasonable Best Efforts | 54 |
| Section 6.3. | Publicity | 57 |
| Section 6.4. | D&O Insurance and Indemnification | 58 |
| Section 6.5. | Takeover Statutes | 60 |
| Section 6.6. | Obligations of Merger Sub | 60 |
| Section 6.7. | Employee Matters | 60 |
| Section 6.8. | Rule 16b-3 | 63 |
| Section 6.9. | Stockholder Litigation | 63 |
| Section 6.10. | Delisting | 63 |
| Section 6.11. | Director Resignations | 63 |
| Section 6.12. | FIRPTA | 64 |
| Section 6.13. | Treatment of Company Indebtedness | 64 |
| ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER | 65 | |
| Section 7.1. | Conditions to Each Party’s Obligations to Effect the Merger | 65 |
| Section 7.2. | Conditions to Obligations of Parent | 65 |
| Section 7.3. | Conditions to Obligations of the Company | 66 |
| ARTICLE VIII TERMINATION | 67 | |
| Section 8.1. | Termination | 67 |
| Section 8.2. | Effect of Termination | 69 |
| ARTICLE IX MISCELLANEOUS | 72 | |
| Section 9.1. | Amendment and Modification; Waiver | 72 |
| Section 9.2. | NonSurvival of Representations and Warranties | 73 |
| Section 9.3. | Expenses | 73 |
ii
| Section 9.4. | Notices | 73 |
| Section 9.5. | Interpretation | 74 |
| Section 9.6. | Counterparts | 75 |
| Section 9.7. | Entire Agreement; ThirdParty Beneficiaries | 75 |
| Section 9.8. | Severability | 75 |
| Section 9.9. | Governing Law; Jurisdiction | 76 |
| Section 9.10. | Waiver of Jury Trial | 76 |
| Section 9.11. | Assignment | 77 |
| Section 9.12. | Enforcement; Remedies | 77 |
| Annex A | Certain Definitions |
| Annex B | Form of Voting and Support Agreement |
iii
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of October 19, 2026, is by and among Salesforce, Inc., a Delaware corporation (“Parent”), Banff Acquisition Sub Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“Merger Sub”), and Braze, Inc., a Delaware corporation (the “Company”). All capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex A or as otherwise defined elsewhere in this Agreement, unless the context clearly provides otherwise. Parent, Merger Sub and the Company are each sometimes referred to herein as a “Party” and collectively, as the “Parties.”
RECITALS
WHEREAS, it is proposed that Merger Sub shall merge with and into the Company, with the Company surviving the merger as a wholly owned Subsidiary of Parent (the “Merger”), upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and material inducement to Parent to enter into this Agreement, the Persons signatory to the Voting Agreement (collectively, the “Company Support Parties”) are entering into a voting and support agreement with Parent (the “Voting Agreement”) in the form appended hereto as Annex B, pursuant to which, among other things, each Company Support Party is agreeing, subject to the terms of the Voting Agreement, to vote all shares of Class A Common Stock it owns in the manner set forth in the Voting Agreement;
WHEREAS, the board of directors of the Company (the “Company Board of Directors”) unanimously (i) determined that the terms of this Agreement and the transactions contemplated hereby (the “Transactions”), including the Merger, are fair to, and in the best interests of, the Company and its stockholders (the “Company Stockholders”), (ii) determined that it is in the best interests of the Company and the Company Stockholders and declared it advisable to enter into this Agreement, (iii) approved the execution and delivery by the Company of this Agreement and by the Company Support Parties of the Voting Agreement, the performance by the Company of its covenants and agreements contained herein and the consummation of the Merger and the other Transactions upon the terms and subject to the conditions contained herein and (iv) resolved to recommend that the Company Stockholders approve and adopt this Agreement and the Transactions, including the Merger (the “Company Board Recommendation”);
-1-
WHEREAS, the board of directors of each of Parent and Merger Sub and the sole stockholder of Merger Sub have approved this Agreement and determined that this Agreement and the Transactions, including the Merger, are (a) advisable and in the best interests of, Parent and its stockholders and (b) advisable, fair to, and in the best interest of, Merger Sub and its sole stockholder; and
WHEREAS, Parent and Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Transactions and also to prescribe various conditions to the Transactions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
Article I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the relevant provisions of the DGCL, at the Effective Time, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will become a wholly owned Subsidiary of Parent and will continue as the surviving corporation in the Merger (the “Surviving Corporation”).
Section 1.2. Effect of the Merger. At the Effective Time, the effects of the Merger shall be as provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL.
Section 1.3. The Closing. The closing of the Merger (the “Closing”) shall take place by means of a virtual closing through electronic exchange of documents and signatures at 4:00 a.m., Pacific Time, on the fifth (5th) Business Day after the satisfaction or, to the extent permitted by applicable Law, waiver of the last of the conditions set forth in Article VII to be satisfied or waived (other than any such conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by applicable Law, waiver of such conditions at the Closing), unless another date or place is agreed to in writing by the Company and Parent. The date on which the Closing takes place is referred to as the “Closing Date.”
Section 1.4. Effective Time. Subject to the provisions of this Agreement, on the Closing Date, a certificate of merger satisfying the applicable requirements of the DGCL, in form and substance reasonably satisfactory to Parent and the Company (the “Certificate of Merger”), shall be duly executed by the Company and filed with the Secretary of State of the State of Delaware, and the Parties shall make any other filings, recordings or publications required to be made under the DGCL in connection with the Merger.
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The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or, if otherwise agreed to by the Company and Parent, at such later time as may be specified in the Certificate of Merger (the effective time of the Merger being referred to as the “Effective Time”).
Section 1.5. Governing Documents. Subject to Section 6.4, at the Effective Time, (a) the Company Charter, as in effect immediately prior to the Effective Time, shall continue in full force and effect without amendment and shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the terms thereof and applicable Law, and (b) the Company Bylaws shall be amended and restated so as to read in their entirety in the form of the bylaws of Merger Sub as in effect immediately prior to the Effective Time, except that the references to Merger Sub’s name shall be replaced by references to “Braze, Inc.”, and, as so amended and restated, shall be the bylaws of the Surviving Corporation.
Section 1.6. Officers and Directors. Unless otherwise determined by Parent prior to the Effective Time, the Parties will use their respective best efforts to cause the officers of Merger Sub immediately prior to the Effective Time to be the initial officers of the Surviving Corporation from and after the Effective Time and the directors of Merger Sub immediately prior to the Effective Time to be the initial directors of the Surviving Corporation from and after the Effective Time.
Article II
TREATMENT OF SECURITIES
Section 2.1. Treatment of Capital Stock.
(a) The Merger. At the Effective Time by virtue of the Merger and without any action on the part of the holder thereof:
(i) Each share of Class A common stock, par value $0.0001 per share, of the Company (“Class A Common Stock”) issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares, Cancelled Shares or Converted Shares) shall be converted into the right to receive $47.50 per share of Class A Common Stock in cash, without interest (the “Per Share Merger Consideration”). From and after the Effective Time, all shares of Class A Common Stock (other than any Dissenting Shares, Cancelled Shares or Converted Shares) shall cease to be issued and outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a valid certificate or certificates which immediately prior to the Effective Time represented any such shares of Class A Common Stock (each, a “Certificate”) or evidenced by way of book-entry in the register of Company Stockholders immediately prior to the Effective Time (each, a “Book-Entry Share”) shall thereafter cease to have any rights with respect to such shares of Class A Common Stock, except the right to receive the Per Share Merger Consideration upon the surrender of such shares of Class A Common Stock in accordance with Section 2.2.
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(ii) Each share of Class A Common Stock issued and outstanding immediately prior to the Effective Time that is owned or held in treasury by the Company or is owned by Parent shall be cancelled and shall cease to exist, and no consideration shall be delivered in exchange therefor (collectively, the “Cancelled Shares”). At the Effective Time, each share of Class A Common Stock issued and outstanding immediately prior to the Effective Time that is owned by any direct or indirect wholly owned Subsidiary of Parent or of the Company (the “Converted Shares”) shall be converted into such number of shares of common stock of the Surviving Corporation (“Surviving Corporation Stock”) equal to the product (rounded up to the nearest whole number, with 0.5 rounded up) of (i) (x) the number of shares of Class A Common Stock held by such Subsidiary immediately prior to the Effective Time, divided by (y) the number of shares of Class A Common Stock outstanding immediately prior to the Effective Time, and (ii) the total number of shares of Surviving Corporation Stock outstanding immediately after the consummation of the Merger.
(iii) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically converted into and become one validly issued, fully paid and nonassessable share of Class A Common Stock of the Surviving Corporation.
(b) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, shares of Class A Common Stock that are issued and outstanding immediately prior to the Effective Time and that are owned by Company Stockholders that have properly perfected their rights of appraisal within the meaning of Section 262 of the DGCL (the “Dissenting Shares”) shall not be converted into the right to receive the Per Share Merger Consideration, unless and until such stockholders shall have failed to perfect any available right of appraisal under applicable Law, but, instead, the holders thereof shall be entitled to payment of the appraised value of such Dissenting Shares in accordance with Section 262 of the DGCL. Notwithstanding the foregoing, if any such holder shall have failed to perfect or shall have effectively withdrawn or lost such right of appraisal, such shares of Class A Common Stock held by such stockholder shall not be deemed Dissenting Shares for purposes of this Agreement and shall thereupon be deemed to have been converted into the Per Share Merger Consideration at the Effective Time in accordance with Section 2.1(a). The Company shall give Parent (A) prompt notice of any demands for appraisal filed pursuant to Section 262 of the DGCL received by the Company, withdrawals of such demands and any other instruments served or delivered in connection with such demands pursuant to the DGCL and received by the Company and (B) the opportunity and right to participate in all negotiations and proceedings with respect to demands made pursuant to Section 262 of the DGCL (it being understood that, subject to good-faith consultation with Parent, the Company will have the right to direct and control any such negotiations and proceedings). The Company shall not, except with the prior written consent of Parent, (x) make any payment with respect to any such demand, (y) offer to settle or settle any such demand or (z) waive any failure to timely deliver a written demand for appraisal or timely take any other action to perfect appraisal rights in accordance with the DGCL.
(c) Adjustment to Per Share Merger Consideration. The Per Share Merger Consideration shall be adjusted appropriately, without duplication, to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities
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convertible into Class A Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of shares of Class A Common Stock outstanding after the date hereof and prior to the Effective Time. Nothing in this Section 2.1(c) shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement.
Section 2.2. Payment for Securities; Surrender of Certificates.
(a) Payment Fund. Prior to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as the paying agent in connection with the Merger (the “Paying Agent”). The Paying Agent shall also act as the agent for the Company Stockholders for the purpose of receiving and holding their Certificates and Book-Entry Shares and shall obtain no rights or interests in the shares represented thereby. At or immediately after the Effective Time, Parent shall deposit, or cause to be deposited, with the Paying Agent cash in immediately available funds in an amount sufficient to pay the aggregate Per Share Merger Consideration in accordance with Section 2.1(a)(i) (the “Payment Fund”), for the sole benefit of the holders of Class A Common Stock. In the event the Payment Fund shall be insufficient to pay the aggregate Per Share Merger Consideration in accordance with Section 2.1, Parent shall promptly deposit, or cause to be deposited, additional funds with the Paying Agent in an amount that is equal to the shortfall that is required to make such payment. Parent shall direct the Paying Agent to make delivery of the Per Share Merger Consideration out of the Payment Fund in accordance with this Agreement. The Payment Fund shall not be used for any purpose that is not expressly provided for in this Agreement. The Payment Fund shall be invested by the Paying Agent as reasonably directed by Parent; provided, however, that no such investment or loss thereon shall affect the amounts payable to holders of Certificates or Book-Entry Shares pursuant to this Article II. Any interest and other income resulting from such investments shall be paid to Parent. The Company shall direct its transfer agent to deliver a final record holders list to the Paying Agent at least three (3) Business Days prior to the Closing.
(b) Procedures for Surrender.
(i) Class A Common Stock Certificates. Promptly after the Effective Time, Parent shall cause the Paying Agent to mail to each holder of record of a Certificate and whose shares of Class A Common Stock were converted pursuant to Section 2.1 into the right to receive the Per Share Merger Consideration (A) a letter of transmittal, which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify and (B) instructions for effecting the surrender of the Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) in exchange for payment of the Per Share Merger Consideration into which such shares of Class A Common Stock have been converted pursuant to Section 2.1. Upon surrender of a Certificate (or an affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be
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entitled to receive in exchange therefor the Per Share Merger Consideration pursuant to the provisions of this Article II, and the Certificate (or affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) so surrendered shall be forthwith cancelled. The Paying Agent shall accept such Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) upon compliance with such reasonable terms and conditions as the Paying Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. If payment of the Per Share Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent of payment that (x) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and (y) the Person requesting such payment shall have paid any transfer and other similar Taxes required by reason of the payment of the Per Share Merger Consideration to a Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of Parent that such Tax either has been paid or is not required to be paid.
(ii) Book-Entry Shares. Any holder of any Book-Entry Shares and whose shares of Class A Common Stock were converted pursuant to Section 2.1 into the right to receive the Per Share Merger Consideration shall not be required to deliver a Certificate or an executed letter of transmittal to the Paying Agent to receive the Per Share Merger Consideration. In lieu thereof, each registered holder of one or more Book-Entry Shares shall automatically upon the Effective Time be entitled to receive, and Parent shall direct the Paying Agent to pay and deliver as promptly as reasonably practicable after the Effective Time (and in any event within five (5) Business Days following the Effective Time) the Per Share Merger Consideration pursuant to the provisions of this Article II, for each share of Class A Common Stock formerly represented by such Book-Entry Share, and the Book-Entry Share so exchanged shall be forthwith cancelled. Payment of the Per Share Merger Consideration with respect to Book-Entry Shares shall only be made to the person in whose name such Book-Entry Shares are registered.
(iii) No Interest. No interest shall be paid or accrue on any portion of the Per Share Merger Consideration payable upon surrender of any Certificate (or affidavit of loss in lieu thereof in accordance with Section 2.2(e)) or in respect of any Book-Entry Share.
(c) Transfer Books; No Further Ownership Rights in Class A Common Stock. At the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Class A Common Stock on the records of the Company. The Company shall, five (5) Business Days prior to the anticipated Closing Date or such shorter period as requested by Parent, issue a stop transfer order to its transfer agent solely with respect to shares of Class A Common Stock of record. Until surrendered as contemplated by this Section 2.2, each Certificate and Book-Entry Share representing Class A Common Stock shall be deemed at any time after the Effective Time to represent only the right to receive the Per Share Merger Consideration as contemplated by this Article II. If, after the Effective Time, Certificates or Book-Entry Shares representing Class A Common Stock are presented to Parent for any reason, they shall no longer be outstanding and shall be automatically cancelled and exchanged as provided in this Agreement.
(d) Termination of Payment Fund; No Liability. At any time following the first (1st) anniversary of the Effective Time, Parent shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) remaining in the
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Payment Fund that have not been disbursed, or for which disbursement is pending subject only to the Paying Agent’s routine administrative procedures, to holders of Certificates or Book-Entry Shares, and thereafter such holders shall be entitled to look only to Parent (subject to abandoned property, escheat or similar Laws) as general creditors thereof with respect to the Per Share Merger Consideration, payable upon due surrender of their Certificates (or affidavit of loss in lieu thereof in accordance with Section 2.2(e)) or BookEntry Shares and compliance with the procedures in Section 2.2(b), without any interest thereon. Notwithstanding the foregoing, none of Parent, the Company, Merger Sub, the Surviving Corporation or the Paying Agent shall be liable to any holder of a Certificate or BookEntry Share for any Per Share Merger Consideration or other amounts delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(e) Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof and, if required by Parent, an indemnity bond, the Per Share Merger Consideration payable in respect thereof pursuant to Section 2.1.
Section 2.3. Treatment of Company Equity Awards and the Company ESPP.
(a) At the Effective Time, each In-the-Money Company Option that is outstanding and unexercised immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such In-the-Money Company Option becoming entitled to receive, in full satisfaction of the rights of such holder with respect thereto, the Per Share Merger Consideration in respect of each Net Share covered by such Company Option, without interest and less applicable Tax withholdings.
(b) At the Effective Time, each Company Option that is not an In-the-Money Company Option and that is then outstanding and unexercised, whether or not vested, shall be cancelled with no consideration payable in respect thereof.
(c) At the Effective Time, each Company RSU that is outstanding immediately prior to the Effective Time and that (i) is held by a non-employee member of the Company Board of Directors or (ii) is vested shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such Company RSU becoming entitled to receive, in full satisfaction of the rights of such holder with respect thereto, the Per Share Merger Consideration in respect of each share of Class A Common Stock subject to such Company RSU immediately prior to the Effective Time, without interest and less applicable Tax withholdings.
(d) At the Effective Time, each Company RSU (other than any Company RSU covered by Section 2.3(c)) that is outstanding immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into a restricted stock unit with respect to a number of shares of Parent Common Stock (each, an “Adjusted RSU”) equal to the
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product obtained by multiplying (i) the total number of shares of Class A Common Stock subject to the Company RSU immediately prior to the Effective Time by (ii) the Conversion Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU shall otherwise be subject to the same terms and conditions applicable to the corresponding Company RSU under the applicable Company Equity Plan and the agreement evidencing the grant thereunder, including vesting terms.
(e) At the Effective Time, each Company PSU that is outstanding and unvested immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into an Adjusted RSU equal to the product obtained by multiplying (i) the total number of shares of Class A Common Stock subject to the Company PSU immediately prior to the Effective Time (with such number of shares determined, (x) with respect to any performance period completed prior to the Closing Date (including the fiscal year beginning February 1, 2026, if the Closing Date is on or after February 1, 2027), based on the Actual Performance and (y) with respect to any performance period not completed prior to the Closing Date, the target level of performance (except that if the Closing Date occurs prior to February 1, 2027, the number of Company PSUs earned for the performance period beginning February 1, 2026 shall be determined based on the greater of (A) the target level of performance and (B) Actual Performance)) by (ii) the Conversion Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU shall otherwise be subject to the same terms and conditions applicable to the corresponding Company PSU under the applicable Company Equity Plan and the agreement evidencing the grant thereunder, including vesting terms (but excluding any performance-based vesting conditions).
(f) Notwithstanding anything to the contrary contained in this Section 2.3, if Parent determines that, for holders of Company Equity Awards (other than Company Restricted Shares) employed outside of the United States, the treatment of such Company Equity Awards prescribed by this Section 2.3 would reasonably be expected to cause a significant administrative burden to Parent, Parent may either (i) require that such awards be converted into cash-based awards, in any jurisdiction in which Parent has provided cash-based awards in lieu of equity-based awards to similarly situated employees of Parent and its Subsidiaries or in which Parent and its Subsidiaries do not have a material employee population as of immediately prior to the Effective Time, which cash-based awards shall otherwise have the same terms and conditions as the corresponding Company Equity Awards held by such individuals or (ii) cash out such awards at the Closing based on the value of the Per Share Merger Consideration.
(g) As soon as practicable following the date hereof, the Company shall take all actions with respect to the Company ESPP that are necessary to provide that: (i) with respect to any offering periods in effect as of the date hereof (the “Current ESPP Offering Periods”), no employee who is not a participant in a Current ESPP Offering Period as of the date hereof may become a participant in the Current ESPP Offering Period, and no participant may increase the percentage amount of his or her payroll deduction election from that in effect on the date hereof for such Current ESPP Offering Periods; (ii) subject to the consummation of the Merger, the Company ESPP shall terminate effective immediately prior to the Effective Time; (iii) if the Current ESPP Offering Periods terminate prior to the Effective Time, then the Company ESPP shall be suspended and no new offering period shall be commenced under the Company ESPP prior to the termination of this Agreement; and (iv)
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if any Current ESPP Offering Period is still in effect at the Effective Time, then the last day of such Current ESPP Offering Period shall be accelerated to a date that is no later than three (3) Business Days prior to the Closing Date.
(h) Prior to the Effective Time, the Company shall pass such resolutions and take such other actions as are necessary so as to cause the treatment of the Company Equity Awards and the Company ESPP as contemplated by this Section 2.3.
(i) Notwithstanding anything in Section 2.1(a) to the contrary, at the Effective Time, (i) each Assumed Company Restricted Share that is outstanding immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into an award covering a number of shares of restricted Parent Common Stock (each, an “Adjusted Restricted Share”) equal to the product obtained by multiplying (x) the total number of Assumed Company Restricted Shares by (y) the Conversion Ratio, with any fractional shares rounded to the nearest whole share, and (ii) each Cashout Company Restricted Share that is outstanding immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be converted, in full satisfaction of the holder’s rights in respect thereof, into the right to receive the Per Share Merger Consideration, without interest and less applicable Tax withholdings. Each Adjusted Restricted Share Award shall otherwise be subject to the same terms and conditions applicable to the corresponding Assumed Company Restricted Share under the agreement evidencing such grant, including vesting terms.
(j) Parent shall, or shall cause the Surviving Corporation to, pay to the holders of the Company Equity Awards the cash payments due pursuant to Section 2.3(a) and Section 2.3(c) (and, if applicable, Section 2.3(f) and Section 2.3(i)) as promptly as practicable following the Closing Date (but in no event later than the first payroll date that is at least ten (10) Business Days after the Closing Date); provided, however, that to the extent that any Company RSU or Company PSU constitutes nonqualified deferred compensation subject to Section 409A of the Code, such cash payment shall be paid at the earliest time permitted under the terms of such award that will not result in the application of a tax or penalty under Section 409A of the Code.
(k) Parent shall file with the SEC, at or as soon as reasonably practicable after the Effective Time, a registration statement on Form S-8 (or any successor form), to the extent such form is available, relating to the shares of Parent Common Stock issuable with respect to the Adjusted RSUs and Adjusted Restricted Shares. Parent shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for so long as Adjusted RSUs or Adjusted Restricted Shares remain outstanding.
Section 2.4. Withholding. Each of the Company, Parent, Merger Sub, the Surviving Corporation and the Paying Agent (without duplication) shall be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement any amounts as are required to be withheld or deducted with respect to such payment under the Code, or any other applicable state, local or non-U.S. Tax Law. To the extent that amounts are so deducted or withheld and remitted to the applicable Governmental Entity, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made.
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Article III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as disclosed in (x) any Company SEC Documents filed or furnished by the Company with or to the SEC since February 1, 2025, and publicly available prior to the date of this Agreement (including any exhibits and other information incorporated by reference therein, but excluding any predictive, cautionary or forward looking disclosures contained under the captions “risk factors,” “forward looking statements” or any similar precautionary sections and any other disclosures contained therein that are predictive, cautionary or forward looking in nature) or (y) the applicable section of the disclosure letter delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Letter”) (it being understood that any information set forth in one section or subsection of the Company Disclosure Letter shall be deemed to apply to and qualify (or, as applicable, a disclosure for purposes of) the representation and warranty set forth in this Agreement to which it corresponds in number and, whether or not an explicit reference or cross-reference is made, each other representation and warranty set forth in this Article III for which it is reasonably apparent on its face that such information is relevant to such other section), the Company represents and warrants to Parent and Merger Sub as set forth below.
Section 3.1. Qualification, Organization, Subsidiaries, etc.
(a) The Company is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Except as would not be material to the Company and the Company Subsidiaries, taken as a whole, each Company Subsidiary is a legal entity duly organized and validly existing under the Laws of its respective jurisdiction of organization. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Company and the Company Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of the Company and the Company Subsidiaries is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or, where relevant, in good standing, (1) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (2) has not had and would not, either individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company to consummate the Transactions, including the Merger, prior to the Outside Date. The Company has filed with the SEC, prior to the date hereof, a true, correct and complete copy of the Company Governing Documents as amended to the date hereof. The Company Governing Documents are in full force and effect and the Company is not in violation of the Company Governing Documents. The Company has made available to Parent prior to the date hereof true, correct and complete copies of the certificates of incorporation and bylaws, or equivalent organizational or governing documents, of each of the Company’s “significant subsidiaries” within the meaning of Rule 1-02 of Regulation S-X of the SEC, each as currently in effect.
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(b) All the issued and outstanding shares of capital stock of, or other equity interests in, each Company Subsidiary have been validly issued and are fully paid and nonassessable and are wholly owned, directly or indirectly, by the Company free and clear of all Liens, other than Liens arising under any applicable securities Law or Permitted Liens. Section 3.1(b)(i) of the Company Disclosure Letter sets forth an accurate and complete list of each Company Subsidiary and each Person in which the Company or any Company Subsidiary owns an equity or other economic interest, together with (i) the jurisdiction of incorporation or organization, as the case may be, of each Company Subsidiary or such other Person, (ii) the type and percentage of interests held, directly or indirectly, by the Company in each Company Subsidiary or in each such other Person, (iii) the names and the type of and percentage of interests held by any Person other than the Company or a Company Subsidiary in each Company Subsidiary and (iv) the classification for U.S. federal income Tax purposes of each Company Subsidiary.
Section 3.2. Capitalization.
(a) The authorized capital stock of the Company consists of 2,110,000,000 shares of Class A Common Stock; and 10,000,000 shares of preferred stock, par value $0.0001 per share (“Company Preferred Stock”). As of October 15, 2026 (the “Company Capitalization Date”), (i) (A) 113,594,303 shares of Class A Common Stock were issued and outstanding (including 1,236,475 shares of Company Restricted Shares), (B) no shares of Class A Common Stock were held in the Company’s treasury, (C) no shares of Class A Common Stock were held by the Company Subsidiaries, (D) Company Options covering 2,859,370 shares of Class A Common Stock were outstanding (of which Company Options covering zero shares of Class A Common Stock remain unvested), with a weighted average exercise price per share of $26.49, (E) Company RSUs covering 10,691,078 shares of Class A Common Stock were outstanding, and (F) Company PSUs covering 329,336 shares of Class A Common Stock (based on achievement of the applicable performance metrics at the target level of performance) or 658,672 shares of Class A Common Stock (based on achievement of the applicable performance metrics at the maximum level of performance) were outstanding; (ii) 37,267,622 shares of Class A Common Stock were reserved for issuance pursuant to the Company Equity Plans; (iii) 5,757,391 shares of Class A Common Stock were reserved for issuance pursuant to the Company ESPP; (iv) no shares of Class B common stock, par value $0.0001 per share, of the Company were issued and outstanding and (v) no shares of Company Preferred Stock were issued or outstanding. All the outstanding shares of Class A Common Stock have been, and all shares of Class A Common Stock reserved for issuance as described above shall be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights and not subject to or issued in violation of any purchase option, call option, right of first refusal, or any similar right pursuant to any provision of applicable Law or any Contract to which the Company or any Company Subsidiary is a party or otherwise bound. None of the issued and outstanding shares of Class A Common Stock have been issued in violation of any applicable securities Laws.
(b) Section 3.2(b) of the Company Disclosure Letter sets forth a true, correct and complete list, as of the Company Capitalization Date, of (i) each Company Equity Award, (ii) the name, state and country of residence of the Company Equity Award holder, (iii) the number of shares of Class A Common Stock underlying each Company Equity Award (for each Company
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PSU, assuming achievement of each of the target and maximum levels of performance), (iv) the date on which the Company Equity Award was granted, (v) the Company Equity Plan under which the Company Equity Award was granted, (vi) the vesting commencement date and vesting schedule with respect to the Company Equity Award, including any right of acceleration of such vesting schedule, (vii) the performance metrics applicable to each Company Equity Award, if applicable, (viii) the exercise price of each Company Option, and (ix) the expiration date of each Company Option. The exercise price of each Company Option was at least equal to the fair market value (determined in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)) of the Class A Common Stock on the date such Company Option was granted. All stock subject to the Company Options constitutes “service recipient stock” (as defined under Treasury Regulation 1.409A-1(b)(5)(iii)) with respect to the grantor thereof.
(c) Except as set forth in Section 3.2(a) and Section 3.2(b), and other than the shares of Class A Common Stock that have become outstanding after the Company Capitalization Date that were reserved for issuance as set forth in Section 3.2(a)(ii) and issued in accordance with the terms of the applicable Company Equity Plan and Company Equity Award, in each case as of the date hereof: (i) the Company does not have any shares of capital stock or other equity interests issued or outstanding and (ii) there are no outstanding subscriptions, options, warrants, puts, calls, exchangeable or convertible securities or other similar rights, agreements or commitments or any other Contract to which the Company or any Company Subsidiary is a party or is otherwise bound obligating the Company or any Company Subsidiary to (A) issue, transfer or sell, or make any payment with respect to, any shares of capital stock or other equity interests of the Company or any Company Subsidiary or securities convertible into, exchangeable for or exercisable for, or valued by reference to, or that correspond to, such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, put, call, exchangeable or convertible securities or other similar right, agreement or commitment, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests or (D) provide any amount of funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Company Subsidiary that is not wholly owned or in any other Person. There are no outstanding obligations of the Company or any Company Subsidiary: (1) restricting the transfer of, (2) affecting the voting rights of, (3) requiring the repurchase, redemption or disposition of, or containing any right of first refusal, right of first offer or similar right with respect to, (4) requiring the registration for sale of or (5) granting any preemptive or anti-dilutive rights with respect to, any shares of capital stock or other equity interests of the Company or any Company Subsidiary.
(d) Neither the Company nor any Company Subsidiary has outstanding bonds, debentures, notes or other similar obligations, the holders of which have the right to vote (or which are convertible into or exercisable for cash and/or securities having the right to vote) with the Company Stockholders on any matter.
(e) Other than the Voting Agreement with any Company Support Party, there are no voting trusts or other agreements, commitments or understandings to which the Company, any Company Subsidiary, or any Company Support Party is a party with respect to the voting of the capital stock or other equity interests of the Company or any Company Subsidiary.
(f) The Company or a Company Subsidiary owns less than fifty percent (50%) of the interest in the issued and outstanding capital stock and other equity interests of the entities
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set forth on Section 3.2(f) of the Company Disclosure Letter (such entities, the “Minority Investment Entities”). Section 3.2(f) of the Company Disclosure Letter sets forth a list of all Minority Investment Entities. The Company has made available to Parent prior to the date hereof true, correct and complete copies of the certificates of incorporation and bylaws, or equivalent organizational or governing documents, of the Minority Investment Entities, each as currently in effect.
Section 3.3. Corporate Authority.
(a) The Company has all requisite corporate power and authority to execute and deliver and perform its obligations under this Agreement and to consummate the Transactions, including, subject to receipt of the Company Stockholder Approval, the Merger. The execution and delivery of this Agreement, the performance of the Company’s obligations under this Agreement, and the consummation of the Transactions have been duly and validly authorized by the Company Board of Directors and no other corporate proceedings (pursuant to the Company Governing Documents or otherwise) on the part of the Company are necessary to authorize the performance of the Company’s obligations under this Agreement or the consummation of, and to consummate, the Transactions, except (i) the receipt of the Company Stockholder Approval and (ii) with respect to the Merger, the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.
(b) The affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock entitled to vote thereon to approve the Merger and adopt this Agreement (the “Company Stockholder Approval”) is the only vote of the holders of any class or series of the Company’s capital stock necessary to approve and adopt this Agreement and to consummate the Transactions, including the Merger.
(c) On or prior to the date hereof, the Company Board of Directors has unanimously (i) determined that the terms of the Transactions, including the Merger, are fair to, and in the best interests of, the Company and the Company Stockholders, (ii) determined that it is fair to and in the best interests of the Company and the Company Stockholders, and declared it advisable, to enter into this Agreement, (iii) approved the execution and delivery by the Company of this Agreement and by the Company Support Parties of the Voting Agreement, the performance by the Company of its covenants and agreements contained herein and the consummation of the Merger and the other Transactions, in each case, upon the terms and subject to the conditions contained herein and (iv) unanimously resolved to recommend that the Company Stockholders approve the Merger and the Transactions and adopt this Agreement. None of the foregoing actions by the Company Board of Directors has been amended, rescinded or modified in any way (unless a Change of Recommendation has been effected after the date hereof in accordance with the terms of Section 5.2).
(d) This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the
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Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, examinership, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought (clauses (i) and (ii), collectively, the “Enforceability Limitations”).
Section 3.4. Governmental Consents; No Violation.
(a) Other than (i) compliance with the DGCL, (ii) compliance with the Securities Act, (iii) compliance with the Exchange Act, including the filing and mailing of the Proxy Statement with the SEC and any amendments or supplements thereto, (iv) compliance with applicable state securities, takeover and “blue sky” laws, (v) compliance with the applicable requirements of the HSR Act and obtaining any requisite clearances or approvals under any other applicable Regulatory Laws and (vi) compliance with any applicable requirements of Nasdaq, no authorization, permit, notification to, consent or approval of, or filing with, any Governmental Entity is necessary or required, under applicable Law, for the execution, delivery and performance by the Company of this Agreement and consummation by the Company of the Transactions, except for such authorizations, permits, notifications, consents, approvals or filings that, if not obtained or made, (1) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (2) a material adverse effect on the ability of the Company to consummate the Transactions, including the Merger, prior to the Outside Date.
(b) The execution and delivery by the Company of this Agreement do not, and, subject to the receipt of the Company Stockholder Approval and except as described in Section 3.4(a), the consummation of the Transactions and performance and compliance with the provisions hereof will not (i) require consent or other action by any person under or conflict with or result in any violation or breach of, or default or change of control (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, modification, cancellation, first offer, first refusal or acceleration of any obligation or to the loss of a benefit under any Contract binding upon the Company or any Company Subsidiary or to which any of them are a party or by which or to which any of their respective properties, rights or assets are bound or subject, or result in the creation or imposition of any Lien upon any of the properties, rights or assets of the Company or any Company Subsidiary, other than Permitted Liens, (ii) conflict with or result in any violation of any provision of the Company Governing Documents or the organizational or governing documents of any Company Subsidiary or (iii) conflict with or violate any Laws applicable to the Company or any Company Subsidiary or any of their respective properties, rights or assets, other than in the case of clause (i) and clause (iii), any such violation, breach, conflict, default, termination, modification, cancellation, acceleration, right, loss or Lien that (1) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (2) a material adverse effect on the ability of the Company to consummate the Transactions, including the Merger, prior to the Outside Date.
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Section 3.5. SEC Reports and Financial Statements.
(a) Since February 1, 2023, the Company has timely filed or furnished all registration statements, forms, statements, schedules, exhibits, documents and reports required to be filed or furnished by it with the SEC (such forms, statements, schedules, documents and reports, the “Company SEC Documents”). As of their respective filing dates or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, the Company SEC Documents complied in all material respects with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder and the listing and corporate governance rules and regulations of Nasdaq, and none of the Company SEC Documents contained (or, with respect to the Company SEC Documents filed after the date hereof, will contain) any untrue statement of a material fact or omitted (or with respect to the Company SEC Documents filed after the date hereof, will omit) to state any material fact required to be stated therein or necessary to make the statements therein, at the time and in light of the circumstances under which they were made, not misleading. Since February 1, 2025, neither the Company nor any Company Subsidiary has received from the SEC or any other Governmental Entity any written comments or questions with respect to any of the Company SEC Documents (including the financial statements included therein) that are not resolved, or, as of the date hereof, has received any written notice from the SEC or other Governmental Entity that such Company SEC Documents (including the financial statements included therein) are being reviewed or investigated, and, to the Company’s Knowledge, there is not, as of the date hereof, any investigation or review being conducted by the SEC or any other Governmental Entity of any Company SEC Documents (including the financial statements included therein). No Company Subsidiary is required to file any forms, reports or other documents with, or furnish any other material to, the SEC. As of the date of this Agreement, to the Company’s Knowledge, (i) no Company SEC Document is the subject of ongoing SEC review, and (ii) no such review is threatened with respect to any Company SEC Document.
(b) The consolidated financial statements (in each case, including all related notes and schedules) of the Company included or incorporated by reference in the Company SEC Documents when filed or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, in each case in effect at the time of such filing, and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited quarterly financial statements, to normal year-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes) in conformity with United States Generally Accepted Accounting Principles (“GAAP”) applied on a consistent basis during the periods involved (subject, in the case of the unaudited quarterly financial statements, to normal year-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes, none of which would be reasonably expected to be, as of the date hereof, material individually or in the aggregate).
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(c) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended. Each required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by any certifications required to be filed or submitted by the Company’s principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act. Neither the Company nor any of its executive officers has received written notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(d) Neither the Company nor any Company Subsidiary is a party to, or has any Contract to become a party to, any joint venture, off-balance sheet partnership or any similar Contract, including any Contract relating to any transaction or relationship between or among the Company or any Company Subsidiary, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any off-balance sheet arrangements (as defined in Item 303(a) of Regulation S-K of the SEC), in any such case, where the purpose of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company in the Company’s published financial statements or any Company SEC Documents.
Section 3.6. Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and which includes policies and procedures that: (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company and (b) are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP. The Company’s disclosure controls and procedures are reasonably designed to ensure the reliability of the Company’s financial reporting, including that all material information required to be disclosed by the Company and the Company Subsidiaries in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management by others within those entities as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act and that such material information is disclosed to the Company’s auditors and the audit committee of the Company Board of Directors. Since February 1, 2022, the Company’s principal executive officer and its principal financial officer have disclosed to the Company’s auditors and the audit committee of the Company Board of Directors (the material circumstances of which disclosure (if any) and significant facts learned during the preparation of such disclosure have been made available to Parent prior to the date hereof) (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting and (iii) any written claim or allegation
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regarding clause (i) or (ii). Since February 1, 2022, neither the Company nor any Company Subsidiary has received any material, unresolved complaint, allegation, assertion or claim, whether written or, to the Company’s Knowledge, oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, and no attorney representing the Company or any Company Subsidiary, whether or not employed by the Company or any Company Subsidiary, has, to the Company’s Knowledge, reported in writing credible evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any Company Subsidiary or their respective officers, directors, employees or agents to the Company Board of Directors or any committee thereof or to the Chief Legal Officer, Chief Executive Officer or Chief Financial Officer of the Company.
Section 3.7. No Undisclosed Liabilities. Neither the Company nor any Company Subsidiary has any liabilities of any nature, whether or not accrued, contingent, absolute, determined, determinable or otherwise, except (a) as and to the extent specifically disclosed, reflected or reserved against in the Company’s consolidated balance sheet (or the notes thereto) as of January 31, 2025, included in the Company SEC Documents filed or furnished prior to the date hereof, (b) for liabilities incurred or which have been discharged or paid in full, in each case, in the ordinary course of business consistent with past practice since January 31, 2025 (other than any liability for any material breaches of Contracts), (c) as expressly required or expressly contemplated by this Agreement and (d) for liabilities which have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.8. Absence of Certain Changes or Events.
(a) From February 1, 2026, there has not occurred any Effect that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) From February 1, 2026 through the date hereof, (i) except to the extent it relates to the events giving rise to and the discussion and negotiation of this Agreement and the Transactions, the businesses of the Company and the Company Subsidiaries have been conducted in all material respects in the ordinary course of business consistent with past practice and (ii) neither the Company nor any Company Subsidiary has taken any action that, if taken after the date hereof, would constitute a breach of, or require the consent of Parent under, Section 5.1(b) (other than any actions specified by clauses (i), (iv), (v), (vii), (x), (xi), (xii), (xv), (xx) or (xxvi) (to the extent clause (xxvi) relates to the foregoing clauses)).
Section 3.9. Compliance with Law; Permits.
(a) The Company and each Company Subsidiary, and, to the Company’s Knowledge, their respective directors and officers are and have been since February 1, 2023 in compliance with, and not in default under or in violation of, any Laws (including Environmental Laws and employee benefits and labor Laws) applicable to the Company or such Company Subsidiary or any of their respective properties or assets, except where such non-compliance,
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default or violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) The Company and the Company Subsidiaries are and have been since February 1, 2023 in possession of all franchises, grants, authorizations, business licenses, permits, easements, variances, exceptions, consents, certificates, approvals, registrations, clearances and orders of any Governmental Entity or pursuant to any applicable Law necessary for the Company and the Company Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, all Company Permits are in full force and effect, no default (with or without notice, lapse of time or both) has occurred under any such Company Permit and none of the Company or any Company Subsidiary has received any written notice from any Governmental Entity threatening to suspend, revoke, withdraw or modify any such Company Permit.
(c) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, none of the Company or any Company Subsidiary, or any of their respective directors, officers, or employees, or, to the Company’s Knowledge, agents or any other third party (including the Company’s or the Company Subsidiaries’ respective Representatives) acting on behalf of the Company or any Company Subsidiary, has, during the past five (5) years, directly or indirectly (i) taken any action in violation of any applicable Anti-Corruption Law or anti-money laundering laws, (ii) offered, authorized, provided or promised (or made attempts at doing any of the foregoing) any payment or thing of value to any Person, including a “foreign official” (as defined by the FCPA), for the purpose of influencing any acts or decision of such Person to unlawfully obtain or retain business or other advantage or (iii) taken any other action that would constitute an offer to pay, a promise to pay or a payment of money or anything else of value, or an authorization of such offer, promise or payment, directly or indirectly, to any Representative of another Person in the course of their business dealings with the Company or any Company Subsidiary, in order to unlawfully induce such Person to act against the interest of his or her employer or principal.
(d) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, none of the Company or any Company Subsidiary or, to the Company’s Knowledge, any of their respective officers, directors, employees, agents or persons acting on it or any Company Subsidiary’s behalf, is or has in the last five (5) years been subject to any actual, pending, or, to the Company’s Knowledge, threatened civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, Proceedings, demand letters, settlements or enforcement actions, or made any voluntary disclosures to any Governmental Entity, involving the Company or any Company Subsidiary in any way relating to applicable Anti-Corruption Laws. The Company and each Company Subsidiary has established and maintains a compliance program and reasonable internal controls and procedures appropriate to ensure compliance with the requirements of applicable Anti-Corruption Laws.
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(e) Within the last five (5) years, the Company and each Company Subsidiary and their respective officers, directors, employees, and, to the Company’s knowledge, agents have conducted their business in accordance with United States economic sanctions Laws administered by the Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”) and all other applicable sanctions Laws in all material respects.
(f) Within the last five (5) years, the Company and each of the Company Subsidiary has conducted its export, re-export, transfer and import transactions in accordance with all applicable U.S. export, re-export, transfer, and import Laws, including the Export Administration Regulations maintained by the U.S. Department of Commerce, customs regulations maintained by the U.S. Department of Homeland Security (Customs and Border Protection), and all other applicable import and export controls in all material respects.
(g) None of the Company or any Company Subsidiary, nor any director, officer, employee, or, to the Company’s Knowledge, agent or affiliate of the Company or any Company Subsidiary: (x) is, or is 50% or more controlled or owned by one or more Persons or entities targeted by or subject to sanctions administered by OFAC, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”), the European Union, any of the Member States of the European Union or the United Kingdom, or is included on any sanctioned party list administered by OFAC, BIS, the U.S. Department of State (including the List of Specially Designated Nationals and Blocked Persons, Foreign Sanctions Evaders List, Denied Persons List, Entity List, or Unverified List, or the Department of State Debarred Parties List, or the United Nations Security Council Consolidated List) or by the European Union, any of the Member States of the European Union, or the United Kingdom (including, without limitation, the Consolidated List of Persons, Groups, and Entities Subject to EU Financial Sanctions, and the UK’s Consolidated Sanctions List) (collectively, the “Restricted Parties”) or (y) has, at any time within the last five (5) years, conducted any business with or engaged in any transaction or arrangement with or involving, directly or indirectly, any Restricted Parties or territories subject to economic or trade sanctions in violation of applicable Law, or has otherwise been in violation of any such sanctions, restrictions, or similar Law. None of the Company or any Company Subsidiary is subject to any pending or, to the Company’s Knowledge, threatened action by any U.S. Governmental Entity or other Governmental Entity that would restrict its ability to engage in export transactions, bar it from exporting or otherwise limit its exporting activities or sales. None of the Company or any Company Subsidiary has, within the last five (5) years, received any written notice of deficiencies in connection with any Trade and Sanctions Controls from OFAC or any other Governmental Entity or made any voluntary disclosures to OFAC or any other Governmental Entity of facts that could result in any action being taken or any penalty being imposed by a Governmental Entity against the Company or any Company Subsidiary. The Company and each Company Subsidiary has, and has had at all times within the last five (5) years, in place policies and procedures designed to promote and ensure compliance with all applicable Trade and Sanctions Controls.
(h) The Company is in compliance in all material respects with the applicable listing and other rules and regulations of Nasdaq.
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Section 3.10. Employee Benefit Plans.
(a) Section 3.10(a) of the Company Disclosure Letter sets forth a true, correct and complete list of each material Company Benefit Plan. For purposes of this Agreement, “Company Benefit Plan” means each “employee pension benefit plan” (as defined in Section 3(2) of ERISA), each “employee benefit plan” (as defined in Section 3(3) of ERISA) and each “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), in each case whether or not subject to ERISA, and each other benefit or compensation plan, policy, program, agreement or arrangement, including but not limited to each bonus, stock, stock option or other equity-based compensation arrangement or plan, incentive, deferred compensation, retirement or supplemental retirement, severance, employment, change-in-control, collective bargaining, profit sharing, pension, vacation, cafeteria, dependent care, medical care, employee assistance program, education or tuition assistance programs, and each insurance and other similar fringe or employee benefit plan, policy, program, agreement or arrangement, in each case, for the benefit of current employees, directors or consultants (or any dependent or beneficiary thereof) of the Company or any Company Subsidiary or any of their ERISA Affiliates or with respect to which the Company or any Company Subsidiary has or may have any obligation or liability (whether actual or contingent), but excluding any such arrangement solely maintained by a Governmental Entity or any Multiemployer Plan. With respect to each material Company Benefit Plan, the Company has delivered or made available to Parent true, correct and complete copies of (or, to the extent no such copy exists, a description of), in each case, to the extent applicable, (i) all plan documents, summary plan descriptions, summaries of material modifications, and amendments related to such plans and any related trust agreement, (ii) the most recent Form 5500 Annual Report, (iii) the most recent audited financial statement and actuarial valuation, (iv) all material, non-routine filings and correspondence with any Governmental Entity during the past three (3) years and (v) all material related agreements, insurance contracts and other agreements which implement each such Company Benefit Plan. The Company has delivered or made available to Parent true, correct and complete copies of each Company Equity Plan and the forms of award agreements evidencing the Company Equity Awards, and with respect to the foregoing forms, other than differences with respect to the number of shares of Class A Common Stock covered thereby, the grant date, the exercise price, regular vesting schedule, and expiration date applicable thereto, no award agreement evidencing any Company Equity Award contains material terms that are not consistent with, or in addition to, such forms.
(b) Except as would not be, either, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, each of the Company Benefit Plans has been operated and administered in accordance with its terms and in compliance with applicable Law, including ERISA, the Code and, in each case, the regulations thereunder. No liability under Title IV of ERISA has been incurred by the Company, the Company Subsidiaries or any of their respective ERISA Affiliates that has not been satisfied in full, and to the Company’s Knowledge, no condition exists that is likely to cause the Company, the Company Subsidiaries or any of their ERISA Affiliates to incur any such liability. All material contributions or other material amounts payable by the Company or the Company Subsidiaries pursuant to each Company Benefit Plan in respect of current or prior plan years have been timely paid or accrued in accordance with GAAP or applicable international accounting standards. There are no pending, or, to the Company’s Knowledge, threatened or anticipated, claims, actions, investigations or audits (other than routine
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claims for benefits) by, on behalf of or against any of the Company Benefit Plans or any trusts related thereto that would result in a material liability.
(c) Within the last six (6) years, no Company Benefit Plan has been an employee benefit plan subject to Section 302 or Title IV of ERISA or Section 412, 430 or 4971 of the Code. None of the Company, the Company Subsidiaries or any of their respective ERISA Affiliates has incurred or is reasonably expected to incur any Controlled Group Liability that has not been satisfied in full, except, with respect to clause (iv) of the definition of Controlled Group Liability only, as would not result in a liability that is material to the Company and the Company Subsidiaries, taken as a whole. None of the Company, any of the Company Subsidiaries or any of their respective ERISA Affiliates has engaged in a non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) or breached any fiduciary duties with respect to any Company Benefit Plan that reasonably would be expected to subject the Company, the Company Subsidiaries or the Surviving Corporation to any Tax or penalty, except as would not be, either individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(d) Neither the Company, the Company Subsidiaries nor any of their respective ERISA Affiliates has, at any time during the preceding six (6) years, contributed to, been obligated to contribute to or had any liability (including any contingent liability) with respect to any Multiemployer Plan, a “multiple employer plan” or a “multiple employer welfare arrangement” (as such terms are defined in ERISA).
(e) No Company Benefit Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees or directors of the Company or the Company Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or comparable U.S. state Law, for which the covered individual pays the full premium cost of coverage.
(f) (i) Each of the Company Benefit Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter or opinion letter as to its qualification and (ii) to the Company’s Knowledge, there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of any such plan. Each such favorable determination letter has been provided or made available to Parent.
(g) Each Company Benefit Plan has been maintained and operated in documentary and operational compliance in all material respects with Section 409A of the Code or an available exemption therefrom.
(h) Neither the execution and delivery of this Agreement nor the consummation of the Transactions (either alone or in conjunction with any other event) could, except as provided by this Agreement or the Company Disclosure Letter, (i) result in any payment (including severance and unemployment compensation, forgiveness of Indebtedness or otherwise) becoming due to any current or former director, officer, employee or other individual service provider of the Company or any Company Subsidiary under any Company Benefit Plan or otherwise, (ii) increase
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any benefits otherwise payable under any Company Benefit Plan or otherwise, (iii) result in any acceleration of the time of payment or vesting of any such benefits, (iv) require a contribution or funding by the Company or any Company Subsidiary to a Company Benefit Plan or the transfer or setting aside of assets to fund any benefits under a Company Benefit Plan, (v) result in any breach or violation of, or default under or limit the right to amend, modify, terminate or transfer the assets of, any Company Benefit Plan following the Effective Time or (vi) result in any payment (whether in cash or property or the vesting of property) to any “disqualified individual” (as such term is defined in Treasury Regulations Section 1.280G-1) that could, individually or in combination with any other such payment, constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).
(i) No Person is entitled to any gross-up, make-whole, or other additional payment from the Company or any Company Subsidiary with respect to any Tax or interest or penalty related thereto, including in accordance with Sections 4999 or 409A of the Code.
(j) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Company Benefit Plan, if any, which is maintained outside of the United States (i) has been operated in conformance and compliance with the applicable statutes or governmental regulations and rulings relating to such plans in the jurisdictions in which such Company Benefit Plan is present or operates and, to the extent relevant, the United States, (ii) that is intended to qualify for special tax treatment meet all requirements for such treatment and (iii) that is intended to be funded or book-reserved are fully funded or book reserved, as appropriate, based upon reasonable actuarial assumptions.
Section 3.11. Labor Matters.
(a) Neither the Company nor any Company Subsidiary is a party to, bound by (or otherwise subject to) or in the process of negotiating any collective bargaining agreement or other Contract with a labor union, works council, employee representative group or labor organization, and to the Company’s Knowledge, no demand has been made or petition filed or Proceedings initiated by an employee or group of employees of the Company or any Company Subsidiary with any labor relations board or other Governmental Entity seeking recognition of any labor organization. Neither the Company nor any Company Subsidiary is (or has during the past two (2) years been) subject to a material labor dispute, strike or work stoppage. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or, to the Company’s Knowledge, threatened involving employees of the Company or any Company Subsidiary.
(b) The Company and each Company Subsidiary are and have been since February 1, 2023 in compliance with all applicable Law respecting labor and employment matters, including immigration, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety and health, plant closings, mass layoffs, worker classification, sexual harassment, discrimination, exempt and non-exempt status, compensation and benefits, wages and hours (including overtime and minimum wage requirements), disability rights, equal employment opportunity and the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), except where such non-compliance has not had, and would not reasonably be expected to have, individually or in the
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aggregate, a Company Material Adverse Effect. Neither the Company nor any Company Subsidiary has taken any action since February 1, 2023, that would (i) constitute a “Mass Layoff” or “Plant Closing” within the meaning of the WARN Act, or any similar state, local or foreign Law or (ii) otherwise trigger any material liability or obligations under the WARN Act or any similar state, local or foreign Law.
(c) There is not, and since February 1, 2023 there has not been, any (i) proceeding pending or, to the Company’s Knowledge, threatened by or before any Governmental Entity with respect to the Company or any Company Subsidiary concerning employment-related matters or (ii) proceeding pending or, to the Company’s Knowledge, threatened against or affecting the Company or any Company Subsidiary brought by any current or former applicant, employee or independent contractor of the Company or any Company Subsidiary, except as would not be, either individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(d) To the Company’s Knowledge, in the last five (5) years, (i) no allegations of sexual harassment, sexual misconduct, sexual assault, sexual discrimination or other material harassment or discrimination allegations have been made against any member of the Company Board of Directors (in their capacity as such) or employee at the level of Vice President or above, and (ii) neither the Company nor any of the Company Subsidiaries have entered into any settlement agreements related to allegations of sexual harassment, sexual misconduct, sexual assault, sexual discrimination or other material harassment or discrimination allegations involving any member of the Company Board of Directors (in their capacity as such) or employee at the level of Vice President or above.
Section 3.12. Tax Matters. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) The Company and the Company Subsidiaries have timely filed (taking into account any valid extension of time within which to file) all Tax Returns that are required to be filed by or with respect to any of them and all such Tax Returns are true, correct and complete;
(b) The Company and the Company Subsidiaries have timely paid in full to the appropriate Governmental Entity all Taxes required to be paid by any of them, except for Taxes for which the financial statements of the Company and the Company Subsidiaries reflect adequate reserves, in accordance with GAAP;
(c) The Company and the Company Subsidiaries have (i) timely paid, deducted, withheld and collected all amounts required to be paid, deducted, withheld or collected by any of them with respect to any payment owing to, or received from, their employees, creditors, independent contractors, customers and other third parties (and have timely paid over any amounts so withheld, deducted or collected to the appropriate Governmental Entity) and (ii) have otherwise complied in all respects with all applicable Laws relating to the payment, withholding, collection and remittance of Taxes (including information reporting requirements);
(d) There is no (i) claim, litigation, audit, examination, investigation or other proceeding pending or, to the Knowledge of the Company, threatened with respect to any Taxes
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or Tax Returns of the Company or any Company Subsidiary, or (ii) deficiency for Taxes that has been assessed by any Governmental Entity against the Company or any Company Subsidiary and that has not been fully satisfied by payment;
(e) Neither the Company nor any Company Subsidiary has waived any statute of limitations with respect to any Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency (other than in connection with automatic extensions of time to file Tax Returns), which waiver or extension is still in effect;
(f) Within the last two (2) years, neither the Company nor any Company Subsidiary has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355(a) of the Code;
(g) None of the Company or any Company Subsidiary (i) is a party to or bound by, or has any obligation under, any Tax allocation, sharing, indemnity, or reimbursement agreement or arrangement (other than any ordinary course commercial agreement not primarily related to Taxes, and other than any agreement or arrangement solely among the Company and the Company Subsidiaries) or (ii) has any liability for Taxes of any Person (other than the Company or any Company Subsidiary) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or nonU.S. Law) or as transferee or successor, by contract or otherwise by operation of Law;
(h) There are no Liens in respect of or on account of Taxes upon any property or assets of the Company or any Company Subsidiary, other than Permitted Liens;
(i) Within the last six (6) years, no claim has been made in writing from any Tax authority in a jurisdiction where the Company or any Company Subsidiary has not filed Tax Returns of a particular type that the Company or any Company Subsidiary is or may be subject to Tax by, or required to file Tax Returns with respect to Taxes in, such jurisdiction;
(j) Neither the Company nor any Company Subsidiary is bound with respect to the current or any future taxable period by any closing agreement (within the meaning of Section 7121(a) of the Code or any similar or analogous provision of state, local or non-U.S. Law) or other similar ruling or written agreement with a Tax authority;
(k) Neither the Company nor any Company Subsidiary has participated in any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b) (or any similar provision of state, local or non-U.S. Law);
(l) Other than adjustments made in the ordinary course of business consistent with past practice for accrued income taxes, neither the Company nor any Company Subsidiary will be required to include an item of income (or exclude an item of deduction) in any taxable period (or portion thereof) beginning after the Closing Date as a result of (i) a change in or incorrect method of accounting occurring prior to the Closing Date, (ii) a prepaid amount received (or deferred revenue recognized) or paid, prior to the Closing Date, (iii) an election under Section 108(i) of the Code (or any similar provision of state, local, or non-U.S. Law), (iv) an election pursuant to Section 965(h) of the Code, (v) intercompany transaction or excess loss
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account described in Treasury Regulations under Section 1502 (or any corresponding or similar provision of state, local or foreign income Tax Law) occurring on or prior to the Closing Date or (vi) installment sale or open transaction disposition made on or prior to the Closing Date;
(m) Except as contemplated by this Agreement, neither the Company nor any Company Subsidiary has undergone an “ownership change” within the meaning of Section 382 of the Code and the Treasury Regulations promulgated thereunder;
(n) Neither the Company nor any Company Subsidiary (i) is or has been a resident for Tax purposes in a country outside its country of organization; (ii) has, or has ever had, a permanent establishment or other taxable presence in any country other than its country of organization; or (iii) is, or has ever been, subject to income Tax in a country outside its country of organization; and
(o) The U.S. federal income tax classifications of each Company Subsidiary is listed in Section 3.12(o) of the Company Disclosure Letter.
Section 3.13. Litigation; Orders. As of the date hereof, there are no Proceedings pending or, to the Company’s Knowledge, threatened against the Company or any Company Subsidiary or any of their respective properties, rights or assets, at law or in equity, by or before, and there are no orders, judgments, injunctions, awards or decrees of or settlement agreements with, any Governmental Entity, that are or would reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole. As of the date hereof, neither the Company nor any Company Subsidiary has any material Proceedings pending against any other Person.
Section 3.14. Intellectual Property.
(a) Section 3.14(a) of the Company Disclosure Letter sets forth a true, correct and complete list as of the date hereof of all: (i) patents and patent applications, (ii) registered trademarks, service marks, trade dress, logos, slogans, brand names, trade names and corporate names and applications therefor, (iii) domain name and social media handle registrations, (iv) copyright registrations and applications for copyright registration, and (v) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by the Company or any Company Subsidiary with any state, government or other public authority, in each case, that are owned by, filed in the name of, applied for by, or subject to a valid obligation of assignment to, the Company or any Company Subsidiary, whether wholly or jointly owned (the “Company Registered Intellectual Property”).
(b) The Company solely owns each item of Company Intellectual Property free and clear of all Liens, other than Permitted Liens. Each material item of Company Registered Intellectual Property is subsisting and has not expired, been cancelled, or been abandoned, and to the Company’s Knowledge, each material item of Company Intellectual Property (other than applications for registrations) is valid and enforceable. As of the date hereof, no Proceeding (other than office actions in connection with the prosecution of applications) is pending or, to the
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Company’s Knowledge, threatened by or before any Governmental Entity, that challenges the legality, validity, enforceability, registration, use or ownership of any Company Intellectual Property. Neither the Company nor any Company Subsidiary receives an exclusive license under any third party Intellectual Property that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole.
(c) Neither the Company nor any Company Subsidiary has granted or transferred (or is obligated to grant or transfer) to any Person or has permitted (or is obligated to permit) any Person to retain any ownership interest, including any joint ownership interest, or any exclusive rights, in any Company Intellectual Property and is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole.
(d) Except as would as would not be, either individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, the Company and the Company Subsidiaries (i) own, license, sublicense or otherwise possess legally enforceable and sufficient rights to use all Intellectual Property necessary to conduct the business of the Company and the Company Subsidiaries as currently conducted, all of which rights shall survive the consummation of the Transactions (including the Merger) on substantially the same terms, without termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit with respect thereto, and (ii) may exercise, transfer, or license all Company Intellectual Property and other such rights without material restriction or material payment to any Person, except (in the case of this clause (ii)) as a result of the terms of a Contract to which Parent, but neither the Company nor a Company Subsidiary, is a party.
(e) As of the date hereof, no Proceedings are pending or, to the Company’s Knowledge, are threatened against the Company or any Company Subsidiary, alleging that the Company or any Company Subsidiary is infringing, misappropriating, diluting or otherwise violating the Intellectual Property of any Person. Except as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, (i) the conduct of the business of the Company and the Company Subsidiaries, including the commercialization and exploitation of the Company Products in connection with such business, as currently conducted or as conducted since February 1, 2023, has not infringed, violated, constituted, or misappropriated any Intellectual Property rights of any Person, violated the Digital Millennium Copyright Act (DMCA) or similar statute with respect to digital works or data, or constituted unfair competition or unfair trade practices, (ii) to the Company’s Knowledge, no Person is infringing, misappropriating, diluting, using in an unauthorized manner or otherwise violating any Company Intellectual Property, and (iii) since February 1, 2023, neither the Company nor any Company Subsidiary has instituted or threatened to institute any Proceeding against any Person alleging that such Person is infringing, misappropriating, diluting, using in an unauthorized manner or otherwise violating any Company Intellectual Property.
(f) Except as would not reasonably be expected to, either individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole: (i) in each case in which the Company or any Company Subsidiary has engaged or hired an employee, consultant or contractor (whether current or former) for the purpose of developing or creating any Intellectual Property, or who has otherwise developed or created Intellectual Property material to
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the business of the Company and the Company Subsidiaries within the scope of their employment or engagement therefor, the Company or such Company Subsidiary has obtained, either by operation of Law or by valid assignment or transfer, exclusive ownership of all such Intellectual Property, and, to the Company’s Knowledge, no such employee, consultant or contractor retains or claims to retain any ownership or other rights in or with respect to such Intellectual Property; (ii) the Company and each Company Subsidiary have taken commercially reasonable actions to maintain and protect all Company Intellectual Property that derives independent economic value, actual or potential, from not being known to other Persons, and all such Intellectual Property has been maintained in confidence in accordance with procedures that are customarily used in the industry to protect rights of like importance; and (iii) to the Company’s Knowledge, since February 1, 2023, there has been no unauthorized disclosure of Company Intellectual Property, or unauthorized disclosure by the Company or any Company Subsidiary of any third party Intellectual Property. Without limiting the generality of the foregoing, the Company and the Company Subsidiaries have, and enforce, a policy requiring each employee, consultant and contractor that has access to any such Intellectual Property to execute a confidentiality agreement that obligates such Person to maintain the confidentiality thereof, except where the failure to enforce such policy has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(g) Neither the Company nor any Company Subsidiary has used, modified, distributed, or made available any Software or other technology under an Open Source License in a manner that would require any material Company Intellectual Property to be (i) disclosed, distributed, or made available in Source Code form, (ii) licensed for the purposes of preparing derivative works, (iii) licensed under terms that allow Company Products or portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled, or (iv) redistributed at no charge. The Company and the Company Subsidiaries are and have been in compliance in all material respects with all Open Source Licenses to which they are subject.
(h) Section 3.14(h) of the Company Disclosure Letter contains a true, correct and complete list of, and the Company has made available to Parent prior to the date hereof true, correct and complete copies of, all Contracts in effect (or with respect to Contracts no longer in effect, to the extent of any surviving terms) pursuant to which the Company or any Company Subsidiary (i) grants any license, covenant not to assert, release, agreement not to enforce or prosecute, or other immunity to any Person under or to any patent rights or other material Company Intellectual Property, except Ordinary Course Licenses, (ii) other than Open Source Licenses, is granted a license or immunity (other than Ordinary Course Licenses) or a covenant not to assert, or release, or agreement not to enforce or prosecute to or under any Intellectual Property, or (iii) develops, acquires, or contracts with any other Person to develop or acquire Intellectual Property, including under any joint development relationship (but excluding employment, consulting, services or invention assignment agreements entered into in the ordinary course of business with employees, contractors or consultants of the Company or any Company Subsidiaries, in each case, where the applicable employee, contractor or consultant has validly assigned all rights in such Intellectual Property to the Company or the Company Subsidiaries), in each case of clauses (i) through (iii), that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole (the foregoing in clauses (i) through (iii), together with the Ordinary Course Licenses and Open Source Licenses, the “IP Contracts”).
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(i) The Company has made available to Parent prior to the date hereof true, correct and complete list of all material Company Products.
(j) Neither the execution and delivery of this Agreement nor the consummation of the Transactions will result in or give any other Person right or option to cause or declare (i) a material breach, violation, modification, cancellation, termination, or suspension of any IP Contract that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole, (ii) the release of any Source Code that is Company Intellectual Property or other material proprietary or confidential Intellectual Property of the Company or any Company Subsidiary, (iii) the grant of (or requirement to grant) any license, covenant not to assert, release, agreement not to enforce or prosecute, or other immunity or similar right to or under any Company Intellectual Property that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole (or (except as a result of the terms of a Contract to which Parent, but neither the Company nor a Company Subsidiary, is a party) any Intellectual Property of Parent) to any Person, or (iv) the Company, any Company Subsidiary or (except as a result of the terms of a Contract to which Parent, but neither the Company nor a Company Subsidiary, is a party) Parent being subject to any non-compete or other material restriction on the operation or scope of their respective business. All IP Contracts shall remain in full force and effect following the Closing in accordance with their terms, and, as of immediately after the Closing, the Company and the Company Subsidiaries will be entitled to exercise all of their respective rights under all IP Contracts to the same extent as prior to the Closing, in each case, except has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(k) As of the date hereof, no Proceeding by any Person is pending against the Company or any Company Subsidiary, nor has any of them received any written claim or notice since February 1, 2023, with respect to any material warranty or material indemnity claim relating to any Company Products or with respect to the material breach of any material agreement (including any IP Contract) under which such Company Products have been made available, in each case, which remains unresolved.
(l) To the Company’s Knowledge, no Company System, and no Software included in any Company Product, contains any undisclosed disabling codes or instructions, “time bombs,” “Trojan horses,” “back doors,” “trap doors,” “worms,” viruses, bugs, faults, security vulnerabilities (as such terms are commonly understood in the software industry) or other Software routines or hardware components that (i) enable or assist any Person to acquire or access without authorization or disable or erase any Software, Company Products or Protected Information or information, or (ii) otherwise significantly adversely affect the functionality of the Company Systems or Company Products, except as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(m) The Company and each Company Subsidiary maintains and adheres to policies and procedures that are compliant with applicable Law relating to the development, training, fine-tuning, evaluation, validation, testing, improvement, use and deployment of AI Systems at and by the Company or any Company Subsidiary, and there has been no actual or alleged non-compliance with any such policies and procedures. The Company and each of the
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Company Subsidiaries has, and at all times during the past three (3) years had, legally enforceable and sufficient rights to use or process all Training Data in the manner used or processed by or for it to develop, train, fine-tune, evaluate, validate, test or improve AI Systems, and the Company and Company Subsidiaries have provided reasonable notice of, and complied with Contract terms applicable to, such use or processing, except as would not be, either individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole. Neither the Company nor any Company Subsidiary is the subject of any complaint, claim, audit, investigation, proceeding, or litigation (or a request for information or testimony from regulators or legislators) regarding any AI System or Training Data. Except as has not had and would not reasonably be expected to be individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, neither the Company nor any Company Subsidiary uses or makes available to third parties any High-Risk AI Systems or engages in activities that are “unacceptable” or “prohibited” under the European Union Artificial Intelligence Act (or that are subject to a similar designation under applicable Law in other jurisdictions).
Section 3.15. Privacy and Data Protection.
(a) Since February 1, 2023, the Company’s and each Company Subsidiary’s receipt, collection, monitoring, maintenance, hosting, creation, transmission, use, analysis, disclosure, storage, retention, disposal, security and other processing, as the case may be, of Protected Information, and, to the Company’s Knowledge, any such activities performed or handled by authorized third parties on the Company’s or a Company Subsidiary’s behalf, have complied in all material respects with, and neither the execution and delivery of this Agreement nor the consummation of the Transactions will result in the Company, any Company Subsidiary, Parent, Merger Sub or the Surviving Corporation being in material breach or material violation of (i) any provisions of Contracts governing Protected Information to which the Company or any Company Subsidiary is bound, (ii) applicable Information Privacy and Security Laws, (iii) PCI DSS, to the extent applicable to the Company or any Company Subsidiary, (iv) any Privacy Statements, or (v) any consents or authorizations that apply to the Protected Information that have been obtained by the Company or a Company Subsidiary. To the extent required by HIPAA, the Company and each Company Subsidiary have executed Business Associate Agreements (as such agreements are defined in HIPAA) with any Covered Entity or Business Associate (as defined in HIPAA), in compliance with HIPAA. The Company and each Company Subsidiary have all rights, authority, consents and authorizations necessary under applicable Information Privacy and Security Laws to receive, retain, access, use and disclose the Protected Information in their possession or under their control in connection with the operation of their business. Since February 1, 2023, the Company and each Company Subsidiary have posted, where required by Information Privacy and Security Laws, as applicable, privacy policies governing their use of Protected Information on their websites made available by the Company and each Company Subsidiary, and the Company and each Company Subsidiary have complied in all material respects with such current and former published privacy policies.
(b) There has been no material (i) security breach of or unauthorized access to, or malicious or unauthorized disruption to, any Company Products, or any Company System that transmits or maintains Protected Information, or (ii) incident involving the loss, damage or unauthorized access, acquisition, modification, use or disclosure of any Protected Information owned, used, hosted, maintained or controlled by or, to the Company’s Knowledge, on behalf of,
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the Company or the Company Subsidiaries, including any such unauthorized access, acquisition, modification, use or disclosure of Protected Information that would constitute a breach for which notification by the Company or any Company Subsidiary to individuals, Persons or Governmental Entities is required, or was made, under any applicable Information Privacy and Security Laws or Contracts to which the Company or a Company Subsidiary is a party. To the Company’s Knowledge, none of the Company’s or any Company Subsidiary’s vendors, suppliers and subcontractors have (A) suffered any material security breach that resulted in any unauthorized access to, modification of, use of, disclosure of or loss of or damage to any Protected Information, (B) materially breached any Contracts with the Company or any Company Subsidiary relating to Protected Information or (C) violated any applicable Information Privacy and Security Laws in relation to the processing of Protected Information on behalf of the Company or any Company Subsidiary, in each case in any material respect.
(c) Since February 1, 2023, the Company and each Company Subsidiary have implemented and maintained in a commercially reasonable manner a written information security program, covering the Company and each Company Subsidiary and their respective material Company Systems, designed to (i) identify and address internal and external risks to the security, integrity or privacy of any proprietary or confidential information in their possession, including Protected Information, (ii) implement, monitor and maintain administrative, technical and physical safeguards to control these risks, and (iii) maintain notification procedures in compliance with applicable Information Privacy and Security Laws and customer Contracts in the case of any breach of security, integrity or privacy compromising Protected Information. In each of the past three (3) fiscal years, the Company and each of the Company Subsidiaries have performed a security risk assessment covering the Company and each Company Subsidiary, and remediated all critical, high risk or material threats and deficiencies identified in such risk assessments.
(d) Since February 1, 2023 through the date hereof, no Person has (i) provided a written audit request to the Company or a Company Subsidiary, (ii) made any written claim against the Company or any Company Subsidiary, or (iii) to the Company’s Knowledge, commenced any Proceeding, in each case, with respect to (A) any alleged violation of applicable Information Privacy and Security Laws by the Company, any Company Subsidiary or (with respect to services provided to or on behalf of the Company) any third party with whom the Company or any Company Subsidiary has entered into a Contract in connection with the collection, maintenance, storage, retention, use, processing, disclosure, transfer or disposal of Protected Information or (B) any of the Company’s or a Company Subsidiary’s privacy or data security practices related to Protected Information, including any unlawful or accidental loss, damage or unauthorized access, acquisition, retention, use, disclosure, modification or other misuse of such information maintained by or on behalf of the Company or the Company Subsidiaries, and there are no facts or circumstances which could reasonably serve as the basis for any such allegations or claims. No Person has provided a complaint (written or otherwise) to the Company or a Company Subsidiary, nor, to the Company’s Knowledge, to any third party, regarding the improper disclosure of Protected Health Information (as defined in HIPAA) by the Company or a Company Subsidiary.
(e) The Company and the Company Subsidiaries have in place disaster recovery plans, procedures and facilities that satisfy applicable Law in all material respects and the Company’s and the Company Subsidiaries’ obligations under Contracts with all customers,
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vendors, suppliers and subcontractors of the Company and the Company Subsidiaries, and the Company and the Company Subsidiaries are in compliance therewith in all material respects.
Section 3.16. Real and Personal Property.
(a) Neither the Company nor any Company Subsidiary currently owns or has previously owned any real property.
(b) Section 3.16(b) of the Company Disclosure Letter sets forth a true, correct and complete list of all material real property leased, subleased, licensed or similarly occupied by the Company or any Company Subsidiary as of the date of this Agreement (the “Leased Real Property”) and the leases, subleases, licenses and occupancy agreements, together with all assignments thereof and amendments, supplements and modifications with respect thereto (each, a “Company Lease”). To the extent in its possession, the Company has made available to Parent true, correct and complete copies of the Company Leases. Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, with respect to each Leased Real Property and the accompanying Company Lease, the Company or the applicable Company Subsidiary that is party thereto has good and valid leasehold interests in such Leased Real Property, free and clear of all Liens, other than Permitted Liens.
(c) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) neither the Company nor any Company Subsidiary has leased, subleased, licensed or otherwise granted any Person a material right to use or occupy the Leased Real Property, or any portion thereof and (ii) to the Company’s Knowledge, there is no existing material condemnation or other proceeding in eminent domain, or any proceeding pending or threatened in writing, affecting any portion of the Leased Real Property.
(d) The Company and the Company Subsidiaries have good and valid title to, or a valid right to use, all of its tangible assets sufficient for the conduct of its business as presently conducted, except for defects in title, easements, restrictive covenants and similar encumbrances that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, all such assets are free and clear of all Liens, except for Permitted Liens.
Section 3.17. Material Contracts.
(a) Except for this Agreement, Section 3.17(a) of the Company Disclosure Letter contains a true, correct and complete list, as of the date hereof, of each Contract described below in this Section 3.17(a) under which the Company or any Company Subsidiary has any current or future rights, responsibilities, obligations or liabilities (in each case, whether contingent or otherwise) or to which the Company or any Company Subsidiary is a party or to which any of their respective properties or assets is subject, in each case as of the date hereof other than Company Benefit Plans listed on Section 3.10(a) of the Company Disclosure Letter (all Contracts
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of the type described in this Section 3.17(a), whether or not set forth on Section 3.17(a) of the Company Disclosure Letter, being referred to herein as the “Material Contract”):
(i) each Contract that limits in any material respect the freedom of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the Effective Time) to compete or engage in any line of business or geographic region or with any Person or sell, supply or distribute any product or service or that otherwise has the effect of restricting the Company, the Company Subsidiaries or any of their respective affiliates (including Parent and its affiliates after the Effective Time) from the development, marketing or distribution of products and services, in each case, in any geographic area;
(ii) each Contract that limits the freedom of the Company, any Company Subsidiary or any of their respective affiliates to negotiate or, except for provisions requiring notice or consent to assignment by the counterparty thereto, consummate any of the Transactions;
(iii) any material partnership, joint venture, strategic alliance, limited liability company agreement (other than any such agreement solely between or among the Company and its wholly owned Subsidiaries), development, co-development, co-promotion or similar material Contract;
(iv) each acquisition or divestiture Contract that contains representations, covenants, indemnities or other obligations (including “earnout” or other contingent payment obligations) that would reasonably be expected to result in the receipt or making by the Company or any Company Subsidiary of future payments in excess of $2,000,000;
(v) each Contract that gives any Person the right to acquire any assets of the Company or any Company Subsidiary (excluding ordinary course commitments to purchase Company Products) after the date hereof with consideration of more than $2,000,000;
(vi) each Contract set forth, or required to be set forth, in Section 3.14(h) of the Company Disclosure Letter;
(vii) any Contract to put Source Code for any Company Product in escrow with a third Person, and any other Contract to provide Source Code for any Company Product to any third Person other than an employee, contractor, agent or representative of the Company or a Company Subsidiary in the ordinary course of business consistent with past practice;
(viii) any order, settlement agreement or similar Contract involving any resolution or settlement of any actual or threatened Proceeding (A) with any Governmental Entity, (B) restricting in any material respect the operations or conduct of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the Effective Time), (C) imposing any material non-monetary obligations or requirements, or (D) involving any admissions of criminal liability;
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(ix) each Contract not otherwise described in any other subsection of this Section 3.17(a) pursuant to which the Company or any Company Subsidiary is obligated to pay, or entitled to receive, payments in excess of $5,000,000 in the twelve (12)-month period following the date hereof;
(x) any Contract that obligates the Company or any Company Subsidiary to make any capital investment or capital expenditure outside the ordinary course of business consistent with past practice and in excess of $1,000,000;
(xi) each Contract that is a Material Customer Agreement, a Material Supplier Agreement or a Material Reseller Agreement;
(xii) each Contract that grants any right of first refusal or right of first offer or that limits the ability of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the Effective Time) to own, operate, sell, transfer, pledge or otherwise dispose of any businesses or material assets;
(xiii) each Contract that contains any exclusivity rights or “most favored nations” provisions or minimum use, supply or display requirements that are binding on the Company or its affiliates (including Parent and its affiliates after the Effective Time);
(xiv) each Contract entered into with a Government Entity;
(xv) each Company Lease with rent payments (assuming projected renewals as provided by the Company to Parent) over the remaining life of such Company Lease in excess of $1,000,000;
(xvi) each Contract (A) relating to outstanding or potential Indebtedness (or commitments in respect thereof) of the Company or any Company Subsidiary (whether incurred, assumed, guaranteed or secured by any asset) in an individual amount in excess of $1,000,000, other than Indebtedness solely between the Company and any wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, or (B) relating to any Liens on any assets of the Company or any Company Subsidiary (other than Permitted Liens);
(xvii) each Contract involving other derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements) for which the aggregate exposure of (or aggregate value to) the Company and the Company Subsidiaries under any such Contract is reasonably expected to be in excess of $500,000 for such Contract or with a notional amount in excess of $500,000 for such Contract;
(xviii) each Contract between the Company or any Company Subsidiary, on the one hand, and any officer, director or affiliate (other than a wholly owned Company Subsidiary) of the Company or any Company Subsidiary, any beneficial owner, directly or indirectly, of more than five percent (5%) of the number or voting power of the shares of Class A Common Stock or any of their respective “associates” or “immediate family” members (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act), on the other hand, including any Contract pursuant to which the Company or any Company Subsidiary has an obligation to
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indemnify such officer, director, affiliate, beneficial owner, associate or immediate family member; and
(xix) any Contract not otherwise described in any other subsection of this Section 3.17(a) that would constitute a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company.
(b) True, correct and complete copies of each Material Contract (and any material amendments, supplements, modifications or supplements thereto) in effect as of the date hereof have been made available to Parent or publicly filed with the SEC prior to the date hereof. None of the Company or any Company Subsidiary is in breach of or default under the terms of any Material Contract, including any terms related to the use of Material Customer data, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the Company’s Knowledge, as of the date hereof, no other party to any Material Contract is in breach of or default under the terms of any Material Contract, where such breach or default has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Material Contract is a valid, binding and enforceable obligation of the Company or the Company Subsidiary which is party thereto and, to the Company’s Knowledge, of each other party thereto, and is in full force and effect, subject to the Enforceability Limitations.
Section 3.18. Environmental Matters. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) the Company and the Company Subsidiaries have complied in all material respects with all Environmental Laws since February 1, 2023, and neither the Company nor any Company Subsidiary is in violation of any Environmental Law, (b) the Company and the Company Subsidiaries have all permits, licenses and other authorizations required under any Environmental Law to operate their business in the ordinary course and the Company and the Company Subsidiaries are in compliance with such permits, licenses and other authorizations, (c) as of the date hereof, no Proceeding is pending, or, to the Company’s Knowledge, threatened, and no notice, demand, letter, claim or request for information has been received by the Company or any Company Subsidiary, concerning or relating to the operations of the Company or any Company Subsidiary that seeks to impose, or that is reasonably likely to result in the imposition of, any liability arising under any Environmental Law upon the Company or any Company Subsidiary, and (d) neither the Company nor any Company Subsidiary is subject to any order or other agreement with any Governmental Entity or any indemnity or other agreement with any third party relating to any obligations or liabilities under any Environmental Law.
Section 3.19. Customers; Suppliers; Resellers; Government Entities.
(a) Section 3.19(a) of the Company Disclosure Letter sets forth a list of the top twenty-five (25) customers of the Company and the Company Subsidiaries based on revenue received by the Company or any Company Subsidiary during the last twelve (12) months ended July 31, 2026 (each, a “Material Customer” and each such Contract with a Material Customer, a “Material Customer Agreement”). As of the date hereof, neither the Company nor any
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Company Subsidiary has received any written notice from any Material Customer that such Material Customer shall not continue as a customer of the Company or that such Material Customer intends to terminate or materially and adversely modify existing Contracts with the Company or the Company Subsidiaries.
(b) Section 3.19(b) of the Company Disclosure Letter sets forth a list of the top twenty-five (25) suppliers and vendors of the Company and the Company Subsidiaries, based on amounts paid by the Company and the Company Subsidiaries, during the last twelve (12) months ended July 31, 2026 (each, a “Material Supplier” and each Contract pursuant to which the Company or a Company Subsidiary paid those amounts to the applicable Material Supplier, a “Material Supplier Agreement”). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any Material Supplier that such supplier shall not continue as a supplier to the Company or that such supplier intends to terminate or materially and adversely modify existing Contracts with the Company or the Company Subsidiaries.
(c) Section 3.19(c) of the Company Disclosure Letter sets forth a list of each of the top twenty-five (25) technology partner, reseller, OEM, independent software vendor and distributor of Company Products pursuant to which the Company or any Company Subsidiary has had billings or received revenue during the last twelve (12) months ended July 31, 2026 (each, a “Material Reseller” and each Contract with each Material Reseller, a “Material Reseller Agreement”). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any Material Reseller that such Material Reseller shall not continue as a technology vendor, partner, reseller, OEM, independent software vendor and distributor of Company Products, as applicable, to the Company or that such Material Reseller intends to terminate or adversely modify existing Contracts with the Company or the Company Subsidiaries.
Section 3.20. Insurance. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) all current insurance policies and insurance Contracts of the Company and the Company Subsidiaries are in full force and effect and are valid and enforceable and cover against the risks as are customary for companies of similar size in the same or similar lines of business and neither the Company nor any Company Subsidiary is in breach or default under any material insurance policy, and (b) all premiums due thereunder have been paid. Neither the Company nor any Company Subsidiary has received notice of cancellation or termination with respect to any current third-party insurance policies or insurance Contracts (other than in connection with normal renewals of any such insurance policies or Contracts) where such cancellation or termination has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.21. Information Supplied. The information relating to the Company and the Company Subsidiaries to the extent supplied by or on behalf of the Company and the Company Subsidiaries to be contained in, or incorporated by reference in the Proxy Statement to be sent to the Company Stockholders in connection with the Merger and the Transactions, will not, at the time it and any amendments or supplements thereto are filed with the SEC, at the date the Proxy Statement is first mailed to the Company Stockholders or at the time of the Company Stockholders
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Meeting, (a) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading or (b) fail to comply in all material respects with the requirements of the DGCL, the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of this Section 3.21, no representation or warranty is made by the Company with respect to information or statements made or incorporated by reference in the Proxy Statement, which information or statements were not supplied by or on behalf of the Company.
Section 3.22. Opinion of Financial Advisor. The Company Board of Directors has received the opinion of Qatalyst Partners LP (“Qatalyst Partners”) to the effect that, as of the date of such opinion and based upon and subject to the various qualifications, assumptions, limitations and other matters set forth therein, the Per Share Merger Consideration to be paid to the holders of shares of Class A Common Stock (other than Parent or any affiliate of Parent) pursuant to, and in accordance with, the terms of this Agreement is fair, from a financial point of view, to such holders. The Company shall, following the execution of this Agreement by all Parties, furnish an accurate, complete and confidential copy of the aforementioned opinion letter to Parent solely for informational purposes.
Section 3.23. State Takeover Statutes; Anti-Takeover Laws. Assuming the accuracy of Parent’s and Merger Sub’s representations and warranties set forth in Section 4.8, the Company Board of Directors has taken all action necessary to render inapplicable to this Agreement and the Transactions Section 203 of the DGCL and any similar provisions in the Company Governing Documents or any other Takeover Statute. The Company has no rights plan, “poison-pill” or other comparable agreement designed to have the effect of delaying, deferring or discouraging any Person from acquiring control of the Company.
Section 3.24. Related Party Transactions. Except as set forth in the Company SEC Documents, there are no transactions, agreements, arrangements or understandings between the Company or any Company Subsidiary, on the one hand, and any affiliate (including any officer or director) thereof, but not including any wholly owned Subsidiary of the Company, on the other hand, that are required to be disclosed under Item 404 of Regulation S-K of the SEC that are not so disclosed.
Section 3.25. Finders and Brokers. Other than Qatalyst Partners, neither the Company nor any Company Subsidiary has employed or engaged any investment banker, broker or finder in connection with the Transactions who is entitled to any fee or any commission in connection with this Agreement or upon or as a result of the consummation of the Merger; provided that any amounts due to Qatalyst Partners upon or as a result of the consummation of the Merger shall be paid immediately prior to the Closing. A true and complete copy of the engagement letter with Qatalyst Partners has been made available to Parent prior to the execution of this Agreement.
Section 3.26. No Other Representations. Except for the representations and warranties contained in Article IV and the certificate delivered pursuant to Section 7.3(c), the Company acknowledges that none of Parent or Merger Sub or any of their respective Representatives makes, and the Company acknowledges that it has not relied upon or otherwise been induced by, any other express or implied representation or warranty with respect to Parent or Merger Sub or any of their
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respective Subsidiaries or with respect to any other information provided or made available to the Company or its Representatives in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to the Company or to the Company’s Representatives in certain “data rooms” or management presentations in expectation of the Transactions or the accuracy or completeness of any of the foregoing, except, in each case for the representations and warranties contained in Article IV and the certificate delivered pursuant to Section 7.3(c). Without limiting the generality of the foregoing, the Company acknowledges that, except as may be expressly provided in Article IV and the certificate delivered pursuant to Section 7.3(c), no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospective information that may have been made available, directly or indirectly, to the Company, any of its Representatives or any other Person. Notwithstanding the foregoing, nothing in this Agreement shall limit the ability of the Company to bring a claim or cause of action against any Person in the case of Fraud by such Person.
Article IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Except as disclosed in (x) any registration statements, forms, statements, schedules, exhibits, documents and reports filed or furnished by Parent with or to the SEC since February 1, 2025 and publicly available prior to the date of this Agreement (but excluding any predictive, cautionary or forward looking disclosures contained under the captions “risk factors,” “forward looking statements” or any similar precautionary sections and any other disclosures contained therein that are predictive, cautionary or forward looking in nature) or (y) the applicable section of the disclosure letter delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”) (it being understood that any information set forth in one section or subsection of the Parent Disclosure Letter shall be deemed to apply to and qualify (or, as applicable, a disclosure for purposes of) the representation and warranty set forth in this Agreement to which it corresponds in number and, whether or not an explicit reference or cross-reference is made, each other representation and warranty set forth in this Article IV for which it is reasonably apparent on its face that such information is relevant to such other section), Parent and Merger Sub represent and warrant to the Company as set forth below.
Section 4.1. Qualification, Organization, etc. Each of Parent and Merger Sub is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization, and Merger Sub is a direct, wholly owned Subsidiary of Parent. Except as would not be material to Parent and Parent Subsidiaries, taken as a whole, each Parent Subsidiary is a legal entity duly organized and validly existing under the Laws of its respective jurisdiction of organization. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each of Parent and the Parent Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of Parent, Merger Sub and the other Parent Subsidiaries is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so
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qualified or, where relevant, in good standing, has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 4.2. Corporate Authority.
(a) Parent and Merger Sub have all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions, including the Merger. The execution and delivery of this Agreement, the performance of Parent’s and Merger Sub’s obligations under this Agreement and the consummation of the Transactions have been duly and validly authorized by all necessary corporate action of Parent and Merger Sub and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the performance of Parent’s or Merger Sub’s obligations under this Agreement or the consummation of, and to consummate, the Transactions, except, with respect to the Merger, for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.
(b) No vote or consent of the holders of any class or series of capital stock of Parent or the holders of any other securities of Parent (equity or otherwise) is necessary to adopt this Agreement, or to approve the Merger or the other Transactions. The vote or consent of Parent, as the sole stockholder of Merger Sub, is the only vote or consent of the holders of any class or series of capital stock of Merger Sub necessary to approve the Merger and adopt this Agreement. Prior to the execution of this Agreement, Parent, as sole stockholder of Merger Sub, duly executed and delivered a stockholder consent, such consent to be effective immediately following the execution of this Agreement, adopting this Agreement pursuant to Sections 228 and 251 of the DGCL and Parent has delivered or promptly following execution of this Agreement will deliver to the Company a copy of such consent, which is currently in effect and has not been rescinded.
(c) This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, constitutes the valid and binding agreement of Parent and Merger Sub, is enforceable against Parent and Merger Sub in accordance with its terms, subject to the Enforceability Limitations.
Section 4.3. Governmental Consents; No Violation.
(a) Other than in connection with or in compliance with (i) the DGCL, (ii) the Securities Act, (iii) the Exchange Act, including the filing and mailing of the Proxy Statement with the SEC and any amendments or supplements thereto (iv) applicable state securities, takeover and “blue sky” laws, (v) the HSR Act and obtaining any requisite clearances or approvals under any other applicable Regulatory Laws and (vi) any applicable requirements of the Nasdaq, no authorization, permit, notification to, consent or approval of, or filing with, any Governmental Entity is necessary or required, under applicable Law, for the consummation by Parent and Merger Sub of the Transactions, except for such authorizations, permits, notifications, consents, approvals or filings that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) The execution and delivery by Parent and Merger Sub of this Agreement do not, and, except as described in Section 4.3(a), the performance and the consummation of the
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Transactions and compliance with the provisions hereof will not, (i) conflict with or result in any violation or breach of, or default or change of control (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, modification, cancellation, first offer, first refusal or acceleration of any obligation or to the loss of a benefit under any Contract binding upon Parent or any Parent Subsidiary or to which any of them are a party or by which or to which any of their respective properties, rights or assets are bound or subject, or result in the creation of any Lien upon any of the properties, rights or assets of Parent or any Parent Subsidiary, other than Permitted Liens, (ii) conflict with or result in any violation of any provision of the certificate of incorporation and bylaws of Parent as amended to the date hereof or the organizational or governing documents of Merger Sub or (iii) conflict with or violate any Laws applicable to Parent or any Parent Subsidiary or any of their respective properties, rights or assets, other than in the case of clauses (i) and (iii), any such violation, breach, conflict, default, termination, modification, cancellation, acceleration, right, loss or Lien that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 4.4. Litigation; Orders. As of the date hereof, there are no Proceedings pending or, to Parent’s Knowledge, threatened against Parent or any Parent Subsidiary or any of their respective properties, rights or assets by or before, and there are no orders, judgments or decrees of or settlement agreements with, any Governmental Entity, that are or would reasonably be expected to, individually or in the aggregate, cause a Parent Material Adverse Effect.
Section 4.5. Information Supplied. The information relating to Parent and the Parent Subsidiaries to the extent supplied by or on behalf of Parent and the Parent Subsidiaries to be contained in, or incorporated by reference in, the Proxy Statement will not, at the time it and any amendments or supplements thereto are filed with the SEC, at the date the Proxy Statement is first mailed to the Company Stockholders or at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. Notwithstanding the foregoing provisions of this Section 4.5, no representation or warranty is made by Parent or Merger Sub with respect to information or statements made or incorporated by reference in the Proxy Statement, which information or statements were not supplied by or on behalf of Parent or Merger Sub.
Section 4.6. Sufficient Funds. Assuming the accuracy of the Company’s representations and warranties set forth in Section 3.2(a), Section 3.2(b), Section 3.2(c) and Section 3.2(d), Parent will have at the Closing access to all of the funds that are necessary for it to pay the aggregate Per Share Merger Consideration and consummate the Transactions, and to perform its obligations under this Agreement.
Section 4.7. Finders and Brokers. Other than J.P. Morgan Securities LLC, neither Parent nor any Parent Subsidiary has employed or engaged any investment banker, broker or finder in connection with the Transactions who is entitled to any fee or any commission in connection with this Agreement or upon or as a result of the consummation of the Merger.
Section 4.8. Stock Ownership. Parent is not, nor at any time for the past three (3) years has been, an “interested stockholder” of the Company as defined in Section 203 of the DGCL.
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Section 4.9. No Other Representations. Except for the representations and warranties contained in Article III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement (which representations in the Voting Agreement are limited to those made by the Company Support Parties and are not made by or on behalf of the Company), each of Parent and Merger Sub acknowledges that none of the Company, any of its Representatives or any other Person makes, and each of Parent and Merger Sub acknowledges that it has not relied upon or otherwise been induced by, any express or implied representation or warranty with respect to the Company or any Company Subsidiary or with respect to any other information provided or made available to Parent, Merger Sub or their respective Representatives in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to Parent, Merger Sub or their respective Representatives in certain “data rooms” or management presentations in expectation of the Transactions or the accuracy or completeness of any of the foregoing, except, in each case for the representations and warranties contained in Article III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement (which representations in the Voting Agreement are limited to those made by the Company Support Parties and are not made by or on behalf of the Company). Without limiting the generality of the foregoing, each of Parent and Merger Sub acknowledges that, except as may be expressly provided in Article III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement (which representations in the Voting Agreement are limited to those made by the Company Support Parties and are not made by or on behalf of the Company), no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospective information that may have been made available, directly or indirectly, to Parent, Merger Sub, any of their respective Representatives or any other Person. Notwithstanding the foregoing, nothing in this Agreement shall limit the ability of Parent or Merger Sub to bring a claim or cause of action against any Person in the case of Fraud by such Person.
Article V
COVENANTS RELATING TO CONDUCT OF BUSINESS
PENDING THE MERGER
Section 5.1. Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 8.1, except as set forth in Section 5.1 of the Company Disclosure Letter, as specifically permitted or required by this Agreement, as required by applicable Law or as consented to in writing by Parent (with respect to actions otherwise prohibited by clauses (i) (with respect to the organizational documents of any Company Subsidiary only), (ix), (x), (xi), (xii), (xiii), (xv), (xvi), (xvii), (xx) and (xxii) (or (xxvi) with respect to any of the foregoing) of Section 5.1(b) only, such consent not to be unreasonably withheld, conditioned or delayed), the Company (a) shall, and shall cause each Company Subsidiary to, use reasonable best efforts to (i) conduct its business in all material respects in the ordinary course of business consistent with past practice, (ii) preserve intact its and their present business organizations, goodwill and ongoing businesses, (iii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause or due to resignation) and (iv) preserve its and their relationships with customers, suppliers, vendors, resellers, licensors, licensees, Governmental Entities, employees and other
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Persons with whom it and they have material business relations (it being agreed by the Parties that with respect to the matters specifically addressed by any provision of Section 5.1(v)Section 5.2., such specific provisions shall govern over the more general provisions of this Section 5.1(a)); and (b) shall not, and shall cause each Company Subsidiary not to, directly or indirectly:
(i) amend, modify, waive, rescind, change or otherwise restate the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary) (other than dividends or distributions made by any wholly owned Company Subsidiary to the Company or any wholly owned Company Subsidiary), or enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to, any of its capital stock or other equity interests or securities;
(iii) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests, except for (A) the acceptance of shares of Class A Common Stock as payment of the exercise price of Company Options or for withholding Taxes in respect of Company Equity Awards, in each case in accordance with past practice and the terms of such Company Equity Awards, or (B) any such transaction by a wholly owned Company Subsidiary which remains a wholly owned Company Subsidiary after consummation of such transaction;
(iv) issue, deliver, grant, sell, pledge, modify, transfer, dispose of or encumber or grant, or authorize the issuance, delivery, grant, sale, pledge, modification, transfer, disposition or encumbrance or grant of, directly or indirectly, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan (except pursuant to the express terms of any Company Equity Award), other than (A) issuances of Class A Common Stock in respect of any exercise of Company Options outstanding on the date hereof or the vesting and settlement of Company Equity Awards outstanding on the date hereof, in all cases in accordance with their respective terms as of the date hereof, (B) issuance of shares of Class A Common Stock pursuant to the exercise of Company Options if necessary to effectuate an optionee direction upon exercise or pursuant to the settlement of Company Equity Awards in order to satisfy Tax withholding obligations, (C) issuances of Class A Common Stock in respect of any options outstanding under the Company ESPP in respect of any Current ESPP Offering Periods or granted under any future Company ESPP offering periods or (D) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries;
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(v) except as required by any Company Benefit Plan in existence as of the date hereof, (A) increase or commit to increase the compensation, bonus, incentive compensation, severance, termination pay or other benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors, (B) pay, grant or award, or commit to pay, grant or award, any bonuses, retention or incentive compensation, including any Company Equity Awards, to any of its directors, officers, employees or individual independent contractors, (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan (or any arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement), except for (x) any amendments to health and welfare plans in the ordinary course of business consistent with past practice that do not contravene the other covenants set forth in this clause (v) and do not materially increase the cost to the Company of maintaining such Company Benefit Plan or the benefits provided thereunder and (y) entry into at-will offer letters that do not provide for severance or change-in-control (or term of similar import) entitlements, (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan, (E) make any contributions or payments to any rabbi trust or other funding vehicle with respect to any Company Benefit Plan, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which such contributions are determined, except as may be required by GAAP, (G) loan or advance money or other property to any directors, officers, employees or individual independent contractors (other than advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and in accordance with the Company’s expense reimbursement policies), (H) terminate the employment of any employee at the level of Vice President or above, other than for cause, (I) (x) promote any employee to the level of Vice President or above or (y) hire any new employees or engage any individual independent contractor, (J) enter into, materially amend, renegotiate, renew or extend a Contract or relationship with a professional employer organization, employer-of-record or similar arrangement, (K) form or otherwise establish any employing entity in any country that does not currently have an employing entity or (L) waive, release or limit the scope of any restrictive covenant or any similar post-termination obligation by which any current or former director, officer, employee or individual independent contractor is bound;
(vi) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, (B) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (C) transactions involving an amount up to $15,000,000 of cash consideration in the aggregate that would not reasonably be expected to materially delay, impede or prevent the consummation of the Transactions on or before the Outside Date;
(vii) merge or consolidate the Company or any Company Subsidiary with any Person or liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or
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among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(viii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice or pursuant to any advancement obligations under the Company Governing Documents or indemnification agreements with directors or officers of the Company or its Subsidiaries in existence on the date of this Agreement and set forth on Section 6.4(a) of the Company Disclosure Letter, or (C) capital contributions to or investments in wholly owned Company Subsidiaries;
(ix) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of any of its material properties, rights or assets (including shares in the capital of the Company or the Company Subsidiaries), subject to any Lien (other than Permitted Liens), any of its material properties, rights or assets (including shares in the capital of the Company or the Company Subsidiaries), or enter into any Contract requiring any of the foregoing, except (A) dispositions of obsolete or worthless equipment, in the ordinary course of business consistent with past practice, (B) non-exclusive licenses of Company Intellectual Property entered into in the ordinary course of business consistent with past practice with customers or resellers of the Company or the Company Subsidiaries in connection with Company Products and (C) pursuant to transactions solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries;
(x) terminate or materially amend or modify any written policies or procedures with respect to (A) the use or distribution by the Company or any Company Subsidiary of any open source Software or (B) the use by or for the Company or any Company Subsidiary of AI Systems, except to comply with applicable Law;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract of the types referred to in clause (i), (ii), (iii), (v), (viii), (xii), (xiii), (xvi) or (xviii) of Section 3.17, or (B) (1) materially (x) modify, (y) amend, (z) extend or terminate any Material Contract (other than renewals and non-renewals occurring in the ordinary course of business consistent with past practice), or (2) waive, release or assign any material (x) rights or (y) claims thereunder, in the case of this clause (2) other than in the ordinary course of business consistent with past practice;
(xii) except in accordance with the Company’s capital budget set forth on Section 5.1(b)(xii) of the Company Disclosure Letter, make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so;
(xiii) commence (other than any collection action in the ordinary course of business consistent with past practice), waive, release, assign, compromise or settle any
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threatened or pending claim, litigation, investigation or Proceeding (for the avoidance of doubt, including with respect to matters in which the Company or any Company Subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of any claim, litigation or proceeding that is not brought by Governmental Entities and that: (A) is for an amount not to exceed, for any such compromise or settlement individually, $1,000,000, or in the aggregate, $2,000,000, (B) does not impose any injunctive relief on the Company and the Company Subsidiaries and does not involve the admission of wrongdoing by the Company, any Company Subsidiary or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Parent or any Parent Subsidiaries (including, following the Effective Time, the Company and the Company Subsidiaries) and (C) does not provide for the license of any Intellectual Property or the termination, modification or amendment of any license of Intellectual Property;
(xiv) change the Company’s fiscal year or make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or Regulation S-X of the Exchange Act;
(xv) amend or modify in any material respect any Privacy Statement of the Company or any Company Subsidiary;
(xvi) except as expressly provided in or required by Section 6.13, (A) make, change or revoke any material Tax election, other than in the ordinary course of business consistent with past practice, (B) adopt or change any annual Tax accounting period or material method of Tax accounting, (C) amend any material Tax Return, (D) except as required by Law, file any material Tax Return that is inconsistent in any material respect with a previously filed material Tax Return of the same type for a prior taxable period (taking into account any amendments prior to the date hereof), (E) settle or compromise any material Tax audit, claim or other proceeding relating to Taxes for an amount in excess of any amount accrued or reserved therefor in the Company SEC Documents (plus any interest that has been incurred since the filing of such Company SEC Documents), (F) enter into any material “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) or any material advance pricing arrangements or agreements with a Tax authority under any U.S. federal, state, local or non-U.S. Law, (G) surrender any right to claim a material refund of Taxes, (H) request a private letter ruling from the IRS or a comparable ruling from any other Tax authority, in each case, with respect to any material amount of Taxes, or (I) agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes (other than in connection with automatic extensions of time to file Tax Returns);
(xvii) redeem, repurchase, repay, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respect the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), in each case except for the incurrence and repayment of any Indebtedness solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries, in each case in the ordinary course of business;
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(xviii) enter into any transactions or Contracts with any affiliate or other Person that would be required to be disclosed by the Company under Item 404 of Regulation S-K of the SEC;
(xix) fail to use commercially reasonable efforts to maintain the Company’s insurance policies or comparable replacement policies with respect to the material assets, operations and activities of the Company and the Company Subsidiaries;
(xx) (A) (i) acquire any real property or (ii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee) that if in existence as of the date hereof would constitute a Material Contract, (B) materially modify or amend or exercise any right to renew any Company Lease (other than entering into an amendment or extension agreement to extend the term of a Company Lease in accordance with its terms), or waive any material term or condition thereof or grant any material consents thereunder, or (C) grant or otherwise knowingly create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any real property leased by the Company, or any interest therein or part thereof, other than Permitted Liens, in the case of each of clauses (B) and (C), other than in the ordinary course of business consistent with past practice;
(xxi) other than the Company Stockholders Meeting, convene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(xxii) other than in the ordinary course of business consistent with past practice, abandon, withdraw, suspend, abrogate, terminate or modify, amend or waive in any material respect any right under any material Company Permit;
(xxiii) adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement;
(xxiv) forgive any material loans or advances to any officers, employees, directors or other individual service providers of the Company or any Company Subsidiary, or any of their respective affiliates, or change their respective existing borrowing or lending arrangements for or on behalf of any of such Persons in accordance with an employee benefit plan or otherwise, except in the ordinary course of business consistent with past practice in connection with relocation activities to any employees of the Company or any Company Subsidiary or (B) expense or indemnification reimbursement pursuant to any advancement obligations under the Company Governing Documents or indemnification agreements with directors or officers of the Company or its Subsidiaries in existence on the date of this Agreement set forth on Section 6.4(a) of the Company Disclosure Letter;
(xxv) use or make available any High-Risk AI Systems or engage in activities that are “unacceptable” or “prohibited” under the European Union Artificial Intelligence Act (or that are subject to a similar designation under applicable Law in other jurisdictions); or
(xxvi) agree, commit or authorize, in writing or otherwise, or announce an intention, to take any of the foregoing actions.
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Any covenant of the Company to cause the Company Subsidiaries to take or refrain from taking any actions under this Section 5.1 shall, with respect to each Minority Investment Entity, be deemed to be a covenant of the Company to use reasonable best efforts, in each case, solely to the extent consistent with applicable fiduciary and legal duties, to cause such Minority Investment Entity, as applicable, to take or refrain from taking such action, which efforts shall be limited to the exercise of management, voting, consent or similar rights available to the Company or any Company Subsidiary under any existing organizational document or other Contract with respect to such Minority Investment Entity, as applicable.
Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Section 5.2. No Solicitation by the Company.
(a) Except as expressly permitted by this Section 5.2, from and after the date hereof until the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 8.1, the Company agrees that it shall not, and shall cause the Company Subsidiaries and its and their respective officers and directors not to, and shall use its reasonable best efforts to cause its and the Company Subsidiaries’ other Representatives to not, directly or indirectly: (i) solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer which constitutes or would reasonably be expected to lead to an Acquisition Proposal; (ii) participate in any negotiations regarding, or furnish to any person any information relating to the Company or any Company Subsidiary in connection with an actual or potential Acquisition Proposal; (iii) adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any Acquisition Proposal; (iv) withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation, or resolve or agree to take any such action; (v) if an Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such Acquisition Proposal and reaffirm the Company Board Recommendation (provided, that the Company shall not be required to reaffirm more than once per Acquisition Proposal unless the terms of such Acquisition Proposal change in any material respects and such change is publicly announced or disclosed) within ten (10) Business Days (or, if earlier, by the second (2nd) Business Day prior to the Company Stockholders Meeting) after the public disclosure of such Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Parent, such rejection of such Acquisition Proposal); (v) include any adverse amendment, withdrawal, alteration, modification or qualification of the Company Board Recommendation in the Proxy Statement or any other legally required disclosure to the Company Stockholders with regard to an Acquisition Proposal; (v) approve, or authorize, or cause or permit the Company or any Company Subsidiary to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document with respect to, or any other agreement or commitment providing for, any Acquisition Proposal (other than an Acceptable
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Confidentiality Agreement entered into in accordance with this Section 5.2) (a “Company Acquisition Agreement”); (v) call or convene a meeting of the Company Stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the Transactions or (v) resolve or agree to do any of the foregoing (any act described in clauses (iii), (iv), (v), (vi), (vii), (viii) and/or (ix) (to the extent related to the foregoing clauses (iii), (iv), (v), (vi), (vii) or (viii)), a “Change of Recommendation”). The Company shall, and shall cause the Company Subsidiaries and its and their respective officers and directors to, and shall use its reasonable best efforts to cause its and the Company Subsidiaries’ other Representatives to, immediately cease any and all solicitation, encouragement, discussions or negotiations with any persons (or provision of any information to any persons) with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal. Promptly after the date hereof (and in any event within two (2) Business Days following the date hereof), the Company shall (A) request in writing that each person that has heretofore executed a confidentiality agreement in connection with its consideration of an Acquisition Proposal or potential Acquisition Proposal promptly destroy or return to the Company all nonpublic information heretofore furnished by the Company or any of its Representatives to such person or any of its Representatives in accordance with the terms of such confidentiality agreement and (B) terminate access to any physical or electronic data rooms relating to a possible Acquisition Proposal by such person and its Representatives. The Company shall enforce, and not waive, terminate or modify without Parent’s prior written consent, any confidentiality, standstill or similar provision in any confidentiality, standstill or other agreement; provided that, if the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel that the failure to waive a particular standstill provision would be reasonably likely to violate the directors’ fiduciary duties under applicable Law, the Company may, with prior written notice to Parent, waive such standstill solely to the extent necessary to permit the applicable person (if it has not been solicited in violation of this Section 5.2) to make, on a confidential basis to the Company Board of Directors, an Acquisition Proposal, conditioned upon such person agreeing to disclosure of such Acquisition Proposal to Parent, in each case as contemplated by this Section 5.2. For purposes of this Section 5.2, the term “person” means any Person or “group,” as defined in Section 13(d) of the Exchange Act, other than, with respect to the Company, Parent or any Parent Subsidiary or any of their Representatives. Notwithstanding the limitations set forth in Section 5.2(a), if the Company receives, prior to the Company Stockholder Approval being obtained, an unsolicited bona fide written Acquisition Proposal that did not result from a breach of this Section 5.2, the Company and the Company Subsidiaries and the Company’s Representatives may contact the Person or any of its Representatives who has made such Acquisition Proposal solely to clarify (and not to negotiate or engage in any discussions regarding or relating to) the material terms and conditions of such Acquisition Proposal so that the Company may determine whether such Acquisition Proposal constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal. For the avoidance of doubt, any violation of the restrictions set forth in this Section 5.2 by (x) a Company Subsidiary, (y) a director or officer of the Company or any Company Subsidiary or (z) any other Representatives acting on behalf or at the direction of the Company or any Company Subsidiary shall be a breach of this Section 5.2 by the Company.
(b) Notwithstanding the limitations set forth in Section 5.2(a), if the Company receives, prior to the Company Stockholder Approval being obtained, an unsolicited bona fide,
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written Acquisition Proposal that did not result from a breach of this Section 5.2, which the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors (i) constitutes a Superior Proposal or (ii) would reasonably be expected to result in a Superior Proposal and, in each case, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law, then in either event the Company may take the following actions: (x) furnish nonpublic information with respect to the Company to the person making such Acquisition Proposal and its Representatives, if, and only if, prior to so furnishing such information, the Company receives from such person an executed Acceptable Confidentiality Agreement and the Company also provides Parent, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to Parent, and (y) engage in discussions or negotiations with such person with respect to such Acquisition Proposal.
(c) The Company shall promptly (and in any event within twenty-four (24) hours) notify Parent of the Company’s or any of its controlled affiliates’ or its or their respective Representatives’ receipt of any Acquisition Proposal, any proposals or inquiries that would reasonably be expected to lead to an Acquisition Proposal, or any inquiry or request for nonpublic information relating to the Company or any Company Subsidiary by any person who has made or would reasonably be expected to make any Acquisition Proposal. Such notice shall indicate the identity of the person making the Acquisition Proposal, inquiry or request, and the material terms and conditions of any such proposal or offer or the nature of the information requested pursuant to such inquiry or request, including unredacted copies of all written requests, proposals, correspondence or offers, including proposed agreements received by the Company or its Representatives relating to such Acquisition Proposal or, if such Acquisition Proposal is not in writing, a reasonably detailed written description of the material terms and conditions thereof. Without limiting the Company’s other obligations under this Section 5.2, the Company shall keep Parent reasonably informed on a prompt and timely basis of the status and material terms (including any amendments or proposed amendments to such material terms) of any such Acquisition Proposal or potential Acquisition Proposal and keep Parent reasonably informed on a prompt and timely basis as to the nature of any information requested of the Company with respect thereto and promptly (and in any event within twenty-four (24) hours) provide to Parent copies of all proposals, offers and proposed agreements relating to an Acquisition Proposal received by the Company or its Representatives or, if such information or communication is not in writing, a reasonably detailed written description of the material contents thereof. Without limiting the Company’s other obligations under this Section 5.2, the Company shall promptly provide (and in any event within twenty-four (24) hours) to Parent any material nonpublic information concerning the Company provided to any other person in connection with any Acquisition Proposal that was not previously provided to Parent. Without limiting the foregoing, the Company shall promptly (and in any event within twenty-four (24) hours after such determination) inform Parent in writing if the Company determines to begin providing information or to engage in discussions or negotiations concerning an Acquisition Proposal pursuant to Section 5.2(b). Unless this Agreement has been validly terminated pursuant to Section 8.1, the Company shall not take any action to exempt any person other than Parent or Merger Sub from the restrictions on “business combinations” contained in any applicable Takeover Statute or in the Company Governing Documents, or otherwise cause such restrictions not to apply. The Company agrees that it will not, directly or indirectly, enter into any agreement with any person which directly or indirectly
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prohibits the Company from providing any information to Parent in accordance with, or otherwise complying with, this Section 5.2.
(d) Notwithstanding anything in this Section 5.2 to the contrary, but subject to Section 5.2(e), at any time prior to the Company Stockholder Approval being obtained, the Company Board of Directors may (i) make a Change of Recommendation in response to an Intervening Event if the Company Board of Directors has determined, in good faith after consultation with the Company’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law or (ii) make a Change of Recommendation, and cause the Company to terminate this Agreement pursuant to and in accordance with Section 8.1(h) in order to enter into a definitive agreement providing for an unsolicited Acquisition Proposal received after the date of this Agreement (which, for the avoidance of doubt, did not result from a breach of this Section 5.2 and such Acquisition Proposal is not withdrawn) if the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors that such Acquisition Proposal constitutes a Superior Proposal, but only if the Company Board of Directors has determined in good faith after consultation with the Company’s outside legal counsel and financial advisors, that failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law; provided that notwithstanding anything to the contrary herein, neither the Company nor any Company Subsidiary shall enter into any Company Acquisition Agreement unless this Agreement has been validly terminated in accordance with Section 8.1. “Intervening Event” means any Effect that is material to the Company and the Company Subsidiaries (taken as a whole) and was not known by or reasonably foreseeable to the Company Board of Directors as of or prior to the date hereof; provided, however, that in no event shall the following events, changes or developments constitute an Intervening Event: (A) the receipt, existence or terms of an Acquisition Proposal or any inquiry or communications relating thereto or any matter relating thereto or consequence thereof, (B) changes in the market price or trading volume of the Class A Common Stock or any other securities of the Company or Company Subsidiaries, or any change in credit rating or the fact that the Company meets or exceeds internal or published estimates, projections, forecasts or predictions for any period, (C) changes in general economic, political or financial conditions or markets (including changes in interest rates, exchange rates, stock, bond and/or debt prices), (D) changes in GAAP, other applicable accounting rules or applicable Law or, in any such case, changes in the interpretation thereof or (E) natural disasters, epidemics or pandemics.
(e) Prior to the Company taking any action permitted (i) under Section 5.2(d)(i), the Company shall provide Parent with four (4) Business Days’ prior written notice advising Parent that the Company Board of Directors intends to effect a Change of Recommendation and specifying, in reasonable detail, the reasons therefor, and during such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day), the Company shall cause its Representatives (including its executive officers) to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of this Agreement in a manner that would obviate the need to effect a Change of Recommendation and at the end of such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day) the Company Board of Directors again makes the determination under Section 5.2(d)(i) (after in good faith taking into account any amendments proposed by Parent) or (ii) under Section 5.2(d)(ii), the Company shall
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provide Parent with four (4) Business Days’ prior written notice advising Parent that the Company Board of Directors intends to take such action and specifying the material terms and conditions of the Acquisition Proposal, including a copy of any proposed definitive documentation, and during such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day), the Company shall cause its Representatives (including its executive officers) to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of this Agreement such that such Acquisition Proposal would no longer constitute a Superior Proposal and at the end of such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day) the Company Board of Directors again makes the determination under Section 5.2(d)(ii) (after in good faith taking into account the amendments proposed by Parent). With respect to this Section 5.2(e), if there are any material amendments, revisions or changes to the terms of any such Superior Proposal (including any revision to the amount, form or mix of consideration the Company Stockholders would receive as a result of the Superior Proposal), the Company shall notify Parent of each such amendment, revision or change in compliance with Section 5.2(c) and the applicable four (4) Business Day period shall be extended until at least three (3) Business Days after the time that Parent receives notification from the Company of each such revision, and the Company Board of Directors shall not take any such action permitted under Section 5.2(d)(ii) prior to the end of any such period (which period shall expire at 11:59 p.m., Pacific Time, on the applicable day) as so extended in accordance with the terms of this Section 5.2(e).
(f) Nothing in this Agreement shall prohibit the Company or the Company Board of Directors from (i) disclosing to the Company Stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, (ii) making any “stop, look and listen” communication to the Company Stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act or (iii) making any legally required disclosure to the Company Stockholders with regard to an Acquisition Proposal, which actions, in the case of clauses (i)–(iii), shall not constitute or be deemed to constitute a Change of Recommendation so long as any such disclosure (x) includes an express reaffirmation, and does not include any adverse amendment, withdrawal, alteration, modification or qualification, of the Company Board Recommendation and (y) does not include any statement that constitutes, and does not otherwise constitute, a Change of Recommendation. For the avoidance of doubt, (1) this Section 5.2(f) shall not permit the Company Board of Directors to make (or otherwise modify the definition of) a Change of Recommendation except to the extent expressly permitted by Section 5.2(d) and Section 5.2(e) and (2) factually accurate statement by the Company or the Company Board of Directors (or a committee thereof) that confirms the receipt of an Acquisition Proposal and that no position has been taken by the Company or the Company Board of Directors (or a committee thereof) as to the advisability or desirability of such Acquisition Proposal, shall not constitute a Change of Recommendation; provided that if such statement has the substantive effect of withdrawing, qualifying or modifying the Company Board Recommendation, such statement shall constitute a Change of Recommendation unless the Company expressly reaffirms the Company Board Recommendation in such statement.
Section 5.3. Preparation of Proxy Statement; Company Stockholders Meeting.
(a) As promptly as reasonably practicable after the date hereof, the Company (with Parent’s reasonable cooperation) shall prepare and file with the SEC a mutually acceptable
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proxy statement in preliminary form relating to the Company Stockholders Meeting (such proxy statement, including, for the avoidance of doubt, any amendments or supplements thereto, and the definitive proxy statement related thereto, and any amendments or supplements to such definitive proxy statement, the “Proxy Statement”) and the Company will use its reasonable best efforts to cause such filing to occur no later than thirty-five (35) days following the execution of this Agreement. Each of the Company and Parent shall furnish all information concerning itself and its affiliates that is required to be included in the Proxy Statement or that is customarily included in proxy statements prepared in connection with transactions of the type contemplated by this Agreement. The Company shall use reasonable best efforts to cause the Proxy Statement to comply with the applicable rules and regulations promulgated by the SEC. Parent shall provide the Company such assistance and cooperation as may be reasonably requested by the Company in the preparation of the information related to Parent or Merger Sub to be included in the Proxy Statement. The Company agrees that all information relating to Parent, its affiliates and its and their respective Representatives included in the Proxy Statement shall be in form and content reasonably satisfactory to Parent. Each of the Company and Parent shall use its respective reasonable best efforts to respond as promptly as practicable to any comments of the SEC with respect to the Proxy Statement, and the Company shall use its reasonable best efforts to cause the definitive Proxy Statement to be filed with the SEC and mailed to the Company Stockholders as promptly as practicable after the date on which the Company learns that the Proxy Statement will not be reviewed or that the SEC staff has no further comments thereon. Each of the Company and Parent, as applicable, shall notify the other promptly (and in any case no later than twenty-four (24) hours) upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information. The Company shall give Parent and its counsel reasonable opportunity to review and comment on the Proxy Statement, including all amendments and supplements thereto, prior to filing such documents with the SEC or disseminating them to holders of shares of Class A Common Stock and a reasonable opportunity to review and comment on all responses to requests for additional information, and shall consider any comments proposed by Parent and its counsel in good faith; provided that, without limiting the generality of this Section 5.3, with respect to documents filed by the Company or Parent, as applicable, which are incorporated by reference in the Proxy Statement, this right to review and comment shall apply only with respect to information relating to the other Party or such other Party’s business, financial condition or results of operations or the Transactions. If, at any time prior to the Company Stockholders Meeting, any information relating to the Company, Parent or any of their respective affiliates, officers or directors should be discovered by the Company or Parent that should be set forth in an amendment or supplement to the Proxy Statement, so that the Proxy Statement shall not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other parties and correct such information, and the Company shall file with the SEC an appropriate amendment or supplement describing such information.
(b) Subject to the earlier termination of this Agreement in accordance with Section 8.1, the Company shall (i) as promptly as reasonably practicable after the date hereof and in consultation with Parent, conduct a “broker search” in accordance with Rule 14a-13 of the Exchange Act for a record date for the Company Stockholders Meeting assuming that, for such purposes only, the record date of the Company Stockholders Meeting will be not less than twenty
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(20) Business Days after the date the broker search is conducted and (ii) duly call, give notice of, convene and hold a meeting of the Company Stockholders for the purpose of seeking the Company Stockholder Approval (as it may be adjourned or postponed as provided below, the “Company Stockholders Meeting”) as soon as reasonably practicable after the date hereof (and the Company shall use reasonable best efforts to cause the Company Stockholders Meeting to be held no later than forty-five (45) days following the date on which the Company learns that the Proxy Statement will not be reviewed or that the SEC staff has no further comments thereon), and the Company shall submit such proposal to the Company Stockholders at the Company Stockholders Meeting and shall not submit any other proposal to the Company Stockholders in connection with the Company Stockholders Meeting (other than an advisory vote regarding merger-related compensation and a customary proposal regarding adjournment of the Company Stockholders Meeting) without the prior written consent of Parent. The Company agrees (i) to provide Parent with reasonably detailed periodic updates concerning proxy solicitation results on a timely basis (including, if requested, promptly providing daily voting reports in the last seven (7) days prior to the Company Stockholders Meeting) and to give written notice (which, for the avoidance of doubt, may be given via email) to Parent one (1) day prior to, and on the date of, the Company Stockholders Meeting, indicating whether, as of such date, sufficient proxies representing the Company Stockholder Approval have been obtained.
(c) Notwithstanding anything to the contrary contained in this Agreement, the Company shall not adjourn or postpone the Company Stockholders Meeting without Parent’s prior written consent; provided that without Parent’s prior written consent, the Company may adjourn or postpone the Company Stockholders Meeting (i) after consultation with Parent, to the extent necessary to ensure that any supplement or amendment to the Proxy Statement required by Law is provided to the stockholders of the Company within a reasonable amount of time in advance of the Company Stockholders Meeting or (ii) if there are not sufficient affirmative votes in person or by proxy at such meeting to constitute a quorum at the Company Stockholders Meeting or to obtain the Company Stockholder Approval, to allow reasonable additional time for solicitation of proxies for purposes of obtaining a quorum or the Company Stockholder Approval; provided that unless agreed to in writing by Parent, (x) any such adjournment or postponement shall be for a period of no more than ten (10) Business Days, and (y) the Company shall only be permitted to effect no more than one (1) such adjournment or postponement pursuant to this clause (ii); provided that (A) no postponement contemplated by this clause (ii) shall be permitted if it would require a change to the record date for the Company Stockholders Meeting, and (B) if requested by Parent, the Company shall effect an adjournment or postponement of the Company Stockholders Meeting under the circumstances contemplated by this clause (ii) for a period of up to ten (10) Business Days (provided that Parent shall make no more than one (1) such request, and no such request for a postponement shall be permitted if it would require a change in the record date for the Company Stockholders Meeting). The Company shall use its reasonable best efforts to (A) solicit from the Company Stockholders proxies in favor of the adoption of this Agreement and approval of the Transactions, including the Merger and (B) take all other action necessary or advisable to secure the Company Stockholder Approval, including, unless the Company Board of Directors has validly made a Change of Recommendation in accordance with Section 5.2, by communicating to the Company’s stockholders the Company Board Recommendation and including such Company Board Recommendation in the Proxy Statement. Notwithstanding any Change of Recommendation, unless this Agreement is terminated in accordance with its terms, (x) the Company Stockholders Meeting shall be convened and this Agreement shall be submitted to the
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Company Stockholders for approval at the Company Stockholders Meeting, and nothing contained herein shall be deemed to relieve the Company of such obligation and (y) all other obligations of the Parties hereunder shall continue in full force and effect and such obligations shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition Proposal (whether or not a Superior Proposal).
Article VI
ADDITIONAL AGREEMENTS
Section 6.1. Access; Confidentiality; Notice of Certain Events.
(a) From the date hereof until the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 8.1, to the extent permitted by applicable Law, the Company shall, and shall cause each Company Subsidiary to, afford to Parent and Parent’s Representatives reasonable access during normal business hours and upon reasonable advance notice to the Company’s and the Company Subsidiaries’ offices, properties, Contracts, personnel, books and records (so long as any such access does not unreasonably interfere with the Company’s business), and during such period, the Company shall, and shall cause each Company Subsidiary to, furnish as promptly as practicable to Parent all information and materials (financial or otherwise) concerning its business, properties, offices, Contracts and personnel as Parent may reasonably request (solely for purposes of consummating the Transactions and for reasonable transition and integration planning). Notwithstanding the foregoing, the Company shall not be required by this Section 6.1 to provide Parent or Parent’s Representatives with access to or to disclose information (i) that is prohibited from being disclosed pursuant to the terms of a confidentiality agreement with (or a Contract’s confidentiality obligations to) a third party entered into prior to the date hereof or after the date hereof in the ordinary course of business consistent with past practice (provided, however, that, at Parent’s written request, the Company shall use its commercially reasonable efforts (x) to obtain the required consent of such third party to such access or disclosure or (y) to make appropriate substitute arrangements to permit reasonable access or disclosure not in violation of such consent requirement), (ii) the disclosure of which, in the reasonable good-faith judgment of the Company after consultation with legal counsel, would violate applicable Law (provided, however, that the Company shall use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure not in violation of such Law) or (iii) the disclosure of which, in the reasonable good-faith judgment of the Company after consultation with legal counsel, would cause the loss of any attorney-client, attorney work product or other legal privilege (provided, however, that the Company shall use its commercially reasonable efforts to allow for such access or disclosure to the maximum extent that such access or disclosure would not jeopardize attorney-client, attorney work product or other legal privilege). Notwithstanding the foregoing, the Company may, as it deems advisable and necessary, reasonably designate any competitively sensitive information provided to the Parent and Parent’s Representatives as “outside counsel only,” and any such materials designated as “outside counsel only” and the information contained therein shall be given only to outside counsel of Parent and will not be disclosed by such outside counsel to employees, officers or directors of Parent and its affiliates unless advance, express permission is given by the Company.
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(b) Each of the Company and Parent will hold, and will cause their respective Representatives and affiliates to hold, any nonpublic information exchanged pursuant to this Section 6.1, in confidence to the extent required by and in accordance with, and will otherwise comply with, the terms of the Confidentiality Agreement, the Clean Room Agreement or the Joint Defense Agreement, as applicable; provided that notwithstanding anything to the contrary herein or in the Confidentiality Agreement, such information and any other nonpublic information obtained by Parent, Merger Sub or their respective Representatives from or on behalf of the Company may be disclosed (i) to prospective lenders, underwriters, initial purchasers, dealer managers, agents and other actual and potential financing sources during syndication and marketing of any financing of Parent, Merger Sub or their respective Subsidiaries, subject (in the case of non-public information) to customary confidentiality undertakings (including customary “click-through” confidentiality undertakings) and (ii) on a confidential basis to rating agencies.
(c) The Company shall give prompt notice to Parent and Parent shall give prompt written notice to the Company (subject to Section 6.2(b)) (i) of any notice or other communication received by such Party from any Governmental Entity in connection with this Agreement, the Voting Agreement, or the Transactions, including the Merger, or from any Person alleging that the consent of such Person is or may be required in connection with the Merger and (ii) of any legal proceeding commenced or, to such Party’s Knowledge, threatened against such Party or any of its Subsidiaries, affiliates, directors or officers or otherwise relating to, involving or affecting such Party or any of its Subsidiaries, affiliates, directors or officers, in each case in connection with, arising from or otherwise relating to the Merger or any other transaction contemplated by this Agreement or the Voting Agreement; provided, however, that the delivery of any notice pursuant to this Section 6.1(c) shall not cure any breach of any representation or warranty requiring disclosure of such matter prior to the date hereof or otherwise limit or affect the remedies available hereunder; provided, further, that either Party’s obligations, actions or inactions pursuant to this Section 6.1(c), in each case in and of themselves, shall be deemed excluded for purposes of determining whether the condition set forth in Section 7.2(b) or Section 7.3(b), as applicable, has been satisfied.
Section 6.2. Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each Party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate the Transactions, including the Merger, as soon as practicable after the date hereof, including (i) preparing and filing or otherwise providing, in consultation with the other Party and as promptly as practicable and advisable after the date hereof, all documentation to effect all necessary applications, notices, petitions, filings and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any Governmental Entity and/or any third party in order to consummate the Transactions, including the Merger, and (ii) taking all actions and steps as may be necessary, subject to the limitations in this Section 6.2, to obtain (and cooperating with each other in obtaining) all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals, including defending through litigation on the merits any claim asserted in court by any Governmental Entity of the federal government of the United States
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under the HSR Act, the Sherman Act, the Clayton Act and the Federal Trade Commission Act, in each case, as amended, to avoid entry of, or to have vacated or terminated, any decree, order or judgment (whether temporary, preliminary or permanent) that would prevent the Closing from occurring prior to the Outside Date. In furtherance and not in limitation of the foregoing, each Party agrees to (x) make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transactions as promptly as practicable, and in any event within twenty (20) Business Days after the execution of this Agreement (unless a later date is mutually agreed between the Parties), and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as reasonably practicable and (y) make all other necessary or advisable filings as promptly as reasonably practicable after the date hereof, and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested under any Regulatory Laws. In furtherance and not in limitation of the foregoing, if and to the extent necessary to obtain clearance of the Merger pursuant to the HSR Act and any other Regulatory Laws of the jurisdictions contemplated by Section 7.1(b) of the Company Disclosure Letter, (1) Parent, Merger Sub and their respective Subsidiaries will (and will direct the Company and its Subsidiaries to) and (2) the Company and its Subsidiaries will, solely to the extent directed by Parent, offer, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, any requirement, condition, limitation, understanding, agreement or order to (A) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of the Company or any Company Subsidiary, (B) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of the Company or any Company Subsidiary in any manner, or (C) impose any restriction, requirement or limitation on the operation of the business or portion of the business of the Company or any Company Subsidiary. Notwithstanding anything in this Agreement to the contrary, Parent, the Company and their respective Subsidiaries will not be required, either pursuant to this Section 6.2(a) or otherwise, to offer, negotiate, commit to, effect or otherwise take any action that would reasonably be expected to, individually or in the aggregate, (x) impact Parent, the Company or their respective Subsidiaries in an adverse manner or amount that is material relative to the value of the Company and the Company Subsidiaries, taken as a whole or (y) have any impact on any asset, business (or portions thereof), product lines or product of Parent or any Parent Subsidiary (excluding any asset, business (or portions thereof), product lines or product of the Company and its Subsidiaries) or (z) materially reduce the reasonably anticipated benefits to Parent and its Subsidiaries, taken as a whole (including anticipated synergies) of the transactions contemplated by this Agreement (each of clauses (x), (y) and (z), a “Burdensome Condition”); provided that if requested by Parent, the Company and its Subsidiaries will become subject to, consent to or offer or agree to, and otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on the Company or its Subsidiaries in the event the Closing occurs; provided, further, that in no event shall Parent, the Company or their respective Subsidiaries be required to propose, negotiate, commit to or effect any action with respect to, any such requirement, condition, limitation, understanding, agreement or order unless such action is conditioned upon the consummation of the Merger and does not take effect until the Effective Time.
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(b) Each of Parent and the Company shall, in connection with and without limiting the efforts referenced in Section 6.2(a) to obtain all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations for the Transactions under the HSR Act or any other Regulatory Law(s), to the extent not prohibited by applicable Law, (i) cooperate in all respects and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, including by allowing the other Party to have a reasonable opportunity to review in advance and comment on drafts of filings and submissions and reasonably considering in good faith comments of the other Party and furnish the other Party with such necessary information and reasonable assistance as the other Party may reasonably request in connection with its preparation of necessary filings or submissions of information to any such Governmental Entity, (ii) promptly inform the other Party of any communication received by such Party from, or given by such Party to, the Antitrust Division of the Department of Justice (the “DOJ”), the Federal Trade Commission (the “FTC”) or any other Governmental Entity, by promptly providing copies to the other Party of any such written communications (or, in the case of oral communications, advise the other Party of such communications), and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the Transactions and (iii) permit the other Party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ, the FTC or any other Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the DOJ, the FTC or other applicable Governmental Entity or other Person, give the other Party the opportunity to attend and participate in any in-person meetings, substantive telephone calls or conferences with the DOJ, the FTC or other Governmental Entity or other Person; provided, however, that materials required to be provided pursuant to the foregoing clauses (i)–(iii) may be redacted (A) to remove references concerning the valuation of Parent, Company or any of their respective Subsidiaries, (B) as necessary to comply with contractual arrangements and (C) as necessary to address reasonable privilege or confidentiality concerns; provided, further, that each of Parent and the Company may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other under this Section 6.2(b) as “Antitrust Counsel Only Material,” which such material and the information contained therein shall be given only to the outside antitrust counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials (Parent on the one hand or the Company on the other) or its legal counsel. Notwithstanding anything in this Agreement to the contrary, but without limiting Parent’s and Merger Sub’s obligations set forth in this Section 6.2, Parent shall, on behalf of the Parties, control and direct all communications and strategy in dealing with any Governmental Entity under the HSR Act or other Regulatory Laws; provided that Parent shall consider in good faith the views and comments of the Company and its outside counsel with respect to such communications and strategies. In furtherance and not in limitation of the foregoing, after consultation with the Company and its outside counsel, Parent shall have the right to, without the consent of the Company, voluntarily withdraw its notification under the HSR Act on one occasion during the initial waiting period so long as Parent refiles its HSR Act notification within two (2) Business Days after such withdrawal (unless otherwise agreed by the Parties hereto).
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(c) In connection with and without limiting the foregoing, in the event that Parent requests the Company to do so, the Company shall give any notices to third parties required under Contracts, and the Company shall use, and cause each of the Company Subsidiaries to use, its reasonable best efforts to obtain any third party consents to any Contracts that are necessary, proper or advisable to consummate the Transactions, including the Merger. Notwithstanding anything to the contrary herein, none of Parent, the Company or any of their respective Subsidiaries shall be required to pay any consent or other similar fee, payment or consideration, make any other concession or provide any additional security (including a guaranty), to obtain such third party consents (which for the avoidance of doubt does not apply to any consents under Regulatory Laws governed by the remainder of this Section 6.2) (except, in the case of the Company, if requested by Parent and either (i) reimbursed or indemnified by Parent or (ii) subject to the occurrence of the Closing).
Section 6.3. Publicity. From and after the date hereof until the earlier of the Closing or the date, if any, on which this Agreement is validly terminated pursuant to Section 8.1, neither the Company nor Parent, nor any of their respective Subsidiaries, shall issue or cause the publication of any press release or other public announcement or disclosure with respect to the Merger, the other Transactions or this Agreement or the Voting Agreement without the prior written consent of the other Party, unless such Party determines, after consultation with outside counsel, that it is required by applicable Law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of such press release or other public announcement or disclosure with respect to the Merger, the other Transactions or this Agreement or the Voting Agreement, in which event such Party shall endeavor, on a basis reasonable under the circumstances, to provide a meaningful opportunity to the other Party to review and comment upon such press release or other announcement or disclosure in advance and shall give due consideration to all reasonable additions, deletions or changes suggested thereto; provided, however, that (i) the Parties shall not be required by this Section 6.3 to provide any such review or opportunity to comment to, or obtain the consent of, the other Party relating to any dispute between the Parties relating to this Agreement; (ii) each Party may make statements that are consistent with previous press releases, public disclosures or public statements made by Parent or the Company in compliance with this Section 6.3 or make statements regarding the actual or expected financial impact (including earnings guidance) of the Transactions on such Party; and (iii) the obligations set forth in this Section 6.3 shall not apply to any communication regarding an Acquisition Proposal in accordance with Section 5.2(f) or a Change of Recommendation in accordance with Section 5.2(a).
Section 6.4. D&O Insurance and Indemnification.
(a) For six (6) years from and after the Effective Time, Parent shall, or shall cause the Surviving Corporation to, indemnify and hold harmless all past and present directors and officers of the Company and the Company Subsidiaries (collectively, the “Indemnified Parties”) against any costs or expenses (including advancing attorneys’ fees and expenses prior to the final disposition of any actual or threatened claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by applicable Law and the Company Governing Documents; provided that such Indemnified Party agrees in advance to return any such funds to which a court of competent jurisdiction determines in a final, non-appealable judgment that such Indemnified Party is not ultimately entitled), judgments, fines,
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losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, investigation, suit or proceeding in respect of acts or omissions occurring or alleged to have occurred at or prior to the Effective Time (including acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Merger or any of the other Transactions), whether asserted or claimed prior to, at or after the Effective Time, in connection with such Indemnified Party serving as an officer, director or other fiduciary of the Company or any Company Subsidiary or of any other Person if such service was at the request or for the benefit of the Company or any Company Subsidiary, to the fullest extent permitted by applicable Law and the Company Governing Documents or the organizational documents of the applicable Company Subsidiary (as applicable) or any indemnification agreements with such Indemnified Party in existence on the date of this Agreement and provided to Parent prior to the date of this Agreement. The Parties agree that all rights to elimination of liability, indemnification and advancement of expenses for acts or omissions occurring or alleged to have occurred at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the Indemnified Parties as provided in the Company’s or the Company Subsidiaries’ respective certificate of incorporation or bylaws (or comparable organizational documents) or in any indemnification agreement of the Company or a Company Subsidiary with any Indemnified Party in existence on the date of this Agreement as set forth on Section 6.4(a) of the Company Disclosure Letter and provided to Parent prior to the date of this Agreement shall survive the Transactions, including the Merger, and shall continue in full force and effect in accordance with the terms thereof; provided that, for the avoidance of doubt, such indemnification agreements shall survive the Closing only with respect to acts or omissions occurring or alleged to have occurred at or prior to the Effective Time (whether asserted or claimed prior to, at or after the Effective Time) and shall not apply to any acts or omissions occurring or alleged to have occurred after the Effective Time. Notwithstanding anything herein to the contrary, if any Indemnified Party notifies the Surviving Corporation on or prior to the sixth (6th) anniversary of the Effective Time of a matter in respect of which such Person intends in good faith to seek advancement or indemnification pursuant to this Section 6.4, the provisions of this Section 6.4 shall continue in effect with respect to such matter until the final disposition of all claims, actions, investigations, suits and proceedings relating thereto.
(b) For six (6) years after the Effective Time, Parent shall cause to be maintained in effect the provisions in (i) the Company Governing Documents and (ii) subject to Section 6.4(a), any indemnification agreement of the Company or a Company Subsidiary with any Indemnified Party in existence on the date of this Agreement and provided to Parent prior to the date of this Agreement, except to the extent that such agreement provides for an earlier termination, in each case, regarding elimination of liability, indemnification of officers and directors and advancement of expenses that are in existence on the date hereof, and no such provision shall be amended, modified or repealed in any manner that would adversely affect the rights or protections thereunder of any such Indemnified Party in respect of acts or omissions occurring or alleged to have occurred at or prior to the Effective Time (including acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Merger or any of the other Transactions).
(c) At or prior to the Effective Time, the Company shall purchase a six (6)-year prepaid “tail” policy on terms and conditions providing coverage retentions, limits and other material terms substantially equivalent to the current policies of directors’ and officers’ liability
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insurance and fiduciary liability insurance maintained by the Company and the Company Subsidiaries with respect to matters arising at or prior to the Effective Time; provided, however, that the Company shall not commit or spend on such “tail” policy, in the aggregate, more than three hundred percent (300%) of the last aggregate annual premium paid by the Company prior to the date hereof for the Company’s current policies of directors’ and officers’ liability insurance and fiduciary liability insurance (the “Base Amount”), and if the cost of such “tail” policy would otherwise exceed the Base Amount, the Company shall be permitted to purchase only as much coverage as reasonably practicable for the Base Amount. The Company and Parent shall in good faith cooperate with each other prior to the Closing with respect to the procurement of such “tail” policy, including with respect to the selection of the broker, available policy price and coverage options.
(d) In the event Parent or the Surviving Corporation 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 all or substantially all 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 Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 6.4. The rights and obligations under this Section 6.4 shall survive consummation of the Merger and shall not be terminated or amended in a manner that is adverse to any Indemnified Party without the written consent of such Indemnified Party. The Parties acknowledge and agree that the Indemnified Parties shall be third party beneficiaries of this Section 6.4, each of whom may enforce the provisions thereof.
Section 6.5. Takeover Statutes. The Parties shall use their respective reasonable best efforts (a) to take all action necessary so that no Takeover Statute is or becomes applicable to the Merger or any of the other Transactions (including, for the avoidance of doubt, the Voting Agreement) and (b) if any such Takeover Statute is or becomes applicable to any of the foregoing, to take all action necessary so that the Merger and the other Transactions (including, for the avoidance of doubt, the Voting Agreement) may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Statute on the Merger and the other Transactions. No Change of Recommendation shall change, or be deemed to change, or permit the Company or the Company Board of Directors to change, in any manner or respect, the approval of the Company Board of Directors for purposes of causing any Takeover Statute to be inapplicable to the Merger or any of the other Transactions (including, for the avoidance of doubt, the Voting Agreement).
Section 6.6. Obligations of Merger Sub. Parent shall take all action necessary to cause Merger Sub to perform its obligations under this Agreement and to consummate the Transactions, including the Merger, upon the terms and subject to the conditions set forth in this Agreement. For the avoidance of doubt, any violation of the obligations of Merger Sub under this Agreement shall also be deemed to be a breach of this Agreement by Parent.
Section 6.7. Employee Matters.
(a) Parent shall assume, honor and fulfill all of the Company Benefit Plans in accordance with their terms as in effect immediately prior to the Closing if either (x) in effect as
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of the date hereof or (y) amended, adopted, entered into or terminated prior to the Closing as permitted pursuant to the terms of such Company Benefit Plans and this Agreement. Parent hereby acknowledges and agrees that a “change in control” (or similar phrase) within the meaning of each Company Benefit Plan containing change in control provisions will occur as of the Effective Time. Effective as of the Effective Time and for a period of twelve (12) months thereafter, Parent shall provide to each employee of the Company and Company Subsidiary who continues to be employed by Parent or any Subsidiary thereof (the “Continuing Employees”), (i) on target earnings, consisting of base pay or wage rate, as applicable, and target incentive cash compensation opportunities, that are, in the aggregate, no less favorable than those in effect for such Continuing Employee immediately prior to the Closing (provided that such Continuing Employee’s base pay or wage rate during such twelve (12) month period shall be no less than that in effect immediately prior to the Closing), (ii) other employee benefits (including retirement, health and welfare benefits, but excluding cash and equity incentive opportunities) that are, in the aggregate, no less favorable than those in effect for similarly situated employees of Parent and its Subsidiaries and (iii) severance entitlements that are no less favorable than those as set forth on Section 6.7(a)(iii) of the Company Disclosure Letter.
(b) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Continuing Employees after the Effective Time (the “New Plans”), each Continuing Employee shall, subject to applicable law and applicable tax qualification requirements, be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Continuing Employee was entitled, before the Effective Time, to credit for such service under any similar Company Benefit Plan in which such Continuing Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply to the extent that its application would result in a duplication of benefits, for purposes of any pension plan or for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits. In addition, and without limiting the generality of the foregoing, (i) each Continuing Employee shall be immediately eligible to participate, without any waiting time (other than any administrative delays in connection with any transition to Parent’s tax qualified defined contribution plan), in any and all New Plans to the extent coverage under such New Plan is of the same type as the Company Benefit Plan in which such Continuing Employee participated immediately before the Effective Time (such plans, collectively, the “Old Plans”), and (ii) (A) for purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, Parent or its applicable Subsidiary shall cause all preexisting condition exclusions and actively-at-work requirements of such New Plan to be waived for such Continuing Employee and his or her covered dependents, unless such conditions would not have been waived under the Old Plan in which such Continuing Employee participated immediately prior to the Effective Time and (B) Parent and its applicable Subsidiary shall use commercially reasonable efforts to cause any eligible expenses incurred by such Continuing Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
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(c) The Company shall take (or cause to be taken) all actions necessary or appropriate to terminate any and all 401(k) plans effective as of the day immediately preceding the Closing Date (the “401(k) Termination Date”), unless Parent provides the Company with written notice at least ten (10) Business Days prior to the Closing Date instructing that the Company not terminate such 401(k) plan(s). The Company shall provide Parent with evidence that such 401(k) plan(s) have been terminated pursuant to resolution of the Company’s Board of Directors at least two (2) Business Days prior to the Closing Date; provided that, prior to amending or terminating the Company’s 401(k) plan and at least ten (10) Business Days prior to the Closing Date, the Company shall provide Parent with the form and substance of any applicable resolutions or amendments for review, and the Company shall reflect any reasonable comments promptly received from Parent. If the Company 401(k) plan is terminated pursuant to this Section 6.7(c), then as soon as practicable following the 401(k) Termination Date, Parent shall permit all Continuing Employees who were eligible to participate in the Company 401(k) plan immediately prior to the 401(k) Termination Date to participate in Parent’s 401(k) plan and shall permit each such Continuing Employee to elect to transfer his or her account balance when distributed from the terminated Company 401(k) plan, including any outstanding participant loans, to Parent’s 401(k) plan, except to the extent accepting such transfers would adversely affect the tax-qualified status of Parent’s 401(k) plan or as may be prohibited by Parent’s 401(k) plan.
(d) Following the date hereof, the Parties shall, and shall cause their respective affiliates to, cooperate and use good faith efforts in all matters reasonably necessary for employee, compensation and benefits integration planning, including exchanging information and data relating to employees, organizational structure, compensation and employee benefits, and distributing communications to the employees of the Company and the Company Subsidiaries. Prior to the Closing, Parent shall be provided the opportunity and a reasonable period of time to review and comment on any broad-based or otherwise material employee notices or communication materials (including website postings) regarding the transactions contemplated by this Agreement from the Company or the Company Subsidiaries to the employees of the Company or the Company Subsidiaries, including broad-based or otherwise material notices or communication materials with respect to employment, compensation or benefits matters addressed in this Agreement or related, directly or indirectly, to the transactions contemplated by this Agreement or employment after the Closing prepared by the Company or the Company Subsidiaries prior to their distribution, and the Company and the Company Subsidiaries shall reflect any reasonable comments promptly received from Parent.
(e) Except as otherwise agreed in writing by Parent, the Company shall use commercially reasonable efforts to terminate all Contracts, arrangements or relationships between the Company or any Company Subsidiary, on the one hand, and any professional employer organization, on the other hand, effective as of the Closing Date.
(f) Nothing in this Agreement shall confer upon any employee (including any Continuing Employee), officer, director or other individual service provider any right to continue in the employ or service of Parent or any affiliate of Parent, or shall interfere with or restrict in any way the rights of Parent or any affiliate of Parent, which rights are hereby expressly reserved, to discharge or terminate the services of any employee, officer, director or other individual service provider at any time for any reason whatsoever, with or without cause. Notwithstanding any
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provision in this Agreement to the contrary, nothing in this Section 6.7 shall (i) be deemed or construed to be an amendment or other modification of any Company Benefit Plan or employee benefit plan of Parent or Merger Sub, (ii) create any third party rights in any Continuing Employee or other current or former service provider of the Company or its affiliates (or any beneficiaries or dependents thereof) or (iii) alter or limit the right of Parent, the Company, the Surviving Corporation or any of their Subsidiaries or affiliates to amend, modify or terminate any Company Benefit Plan, Old Plan, New Plan or any other compensation or benefit plan, program, policy, agreement or arrangement on or after the Effective Time.
Section 6.8. Rule 16b-3. Prior to the Effective Time, the Company and Parent shall, as applicable, take all such steps as may be reasonably necessary or advisable hereto to cause any dispositions of Company equity securities (including derivative securities) and acquisitions of Parent equity securities pursuant to the Transactions by each individual who is a director or officer of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.9. Stockholder Litigation. The Company shall provide Parent prompt notice (and in any event within forty-eight (48) hours) of any litigation brought by any stockholder of the Company or purported stockholder of the Company against the Company, any of its Subsidiaries and/or any of their respective directors or officers relating to the Merger or any of the other Transactions or this Agreement or the Voting Agreement, and shall keep Parent informed on a prompt and timely basis with respect to the status thereof. The Company shall give Parent the opportunity to participate (at Parent’s expense) in the defense or settlement of any such litigation and reasonably cooperate with Parent in conducting the defense or settlement of such litigation, and no such settlement shall be agreed without Parent’s prior written consent, which consent shall not be unreasonably withheld or delayed, except that Parent may, in its sole discretion, withhold such consent to any settlement which does not include a full release of Parent and its affiliates (including the Surviving Corporation and its Subsidiaries) or which imposes an injunction or other equitable relief on the Company, Parent or any of their affiliates (including, after the Effective Time, the Surviving Corporation and its Subsidiaries). In the event of, and to the extent of, any conflict or overlap between the provisions of this Section 6.9 and Section 5.1 or Section 6.2, the provisions of this Section 6.9 shall control.
Section 6.10. Delisting. Each of the Parties agrees to cooperate with the other Parties in taking, or causing to be taken, all actions necessary to delist the Class A Common Stock from Nasdaq and terminate its registration under the Exchange Act; provided that such delisting and termination shall not be effective until at or after the Effective Time.
Section 6.11. Director Resignations. The Company shall use its reasonable best efforts to cause to be delivered to Parent resignations in a form reasonably acceptable to Parent executed by each director of the Company in office as of immediately prior to the Effective Time and effective upon the Effective Time.
Section 6.12. FIRPTA. At or prior to Closing, the Company shall deliver to Parent (with a copy to the Paying Agent) (A) a duly executed certificate in accordance with Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3), certifying that the Company was not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the
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Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, and (B) a notice to the IRS in accordance with Treasury Regulations Section 1.897-2(h)(2), together with written authorization for Parent to deliver such notice to the IRS on behalf of the Company after the Closing.The Company’s obligation to deliver the certificate, notice and authorization contemplated by this Section 6.12 shall be disregarded for purposes of determining whether the conditions to Closing set forth in Article VII have been satisfied, and the sole remedy in the absence of such certificate, notice to the IRS and authorization being delivered at or prior to Closing shall be the entitlement of the Paying Agent, Parent, the Company, Merger Sub and the Surviving Corporation to deduct and withhold from any cash amount payable pursuant to this Agreement amounts that are required to be deducted or withheld in accordance with Section 2.4.
Section 6.13. Certain Tax Matters. The Parties shall, and shall cause their respective Subsidiaries to, take the actions listed in Section 6.13 of the Company Disclosure Letter.
Section 6.14. Treatment of Company Indebtedness. The Company shall (and shall, if applicable, cause the Company Subsidiaries to) deliver all notices and take all other actions within its or their sole control (as applicable) required to facilitate, at or prior to the Effective Time, the termination of all commitments under the New Revolving Credit Agreement (as defined on Section 5.1 of the Company Disclosure Letter), if any, that is entered into after the date hereof and that will be outstanding as of immediately prior to the Closing Date, the repayment in full of all obligations outstanding thereunder (the “Specified Indebtedness”) and the release of any guarantees in connection therewith (collectively, the “Specified Indebtedness Termination”). In furtherance and not in limitation of the foregoing, and if and only if such Specified Indebtedness exists, the Company shall, and shall, if applicable, cause the Company Subsidiaries to, use reasonable best efforts to (A) deliver to Parent at least three (3) Business Days prior to the Closing Date, a draft payoff letter and, if applicable, draft related guarantee release documentation and (B) deliver to Parent at least one (1) Business Day prior to the Closing Date, an executed payoff letter (the “Payoff Letter”) and, if applicable, executed related guarantee release documentation (any such guarantee release documentation, for the avoidance of doubt, shall not be required to be effective until the Effective Time), in each case, with respect to such Specified Indebtedness in form and substance customary for a transaction of this type, from the agent on behalf of the Persons to whom such Specified Indebtedness is owed, which Payoff Letter together with any related guarantee release documentation shall, among other things, include the payoff amount and provide that any guarantees granted in connection with such Specified Indebtedness shall, upon the payment of the amount set forth in the Payoff Letter at or prior to the Effective Time, be released and terminated. Notwithstanding anything herein to the contrary, in no event shall this Section 6.14 require the Company or any of the Company Subsidiaries to cause the Specified Indebtedness Termination to be effective unless and until the Effective Time has occurred and Parent has provided or caused to be provided to the Company or the Company Subsidiaries funds (or Parent has directed the Company or any of the Company Subsidiaries to use funds on their respective balance sheets) to pay in full the then outstanding principal amount of and accrued and unpaid interest and fees with respect to the Specified Indebtedness. At Parent’s request, the Company shall, and shall cause the Company Subsidiaries to, make its and their
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available cash available to be used on the Closing Date to fund any payments with respect to the Specified Indebtedness designated by Parent to be made on or after such date.
Article VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1. Conditions to Each Party’s Obligations to Effect the Merger. The respective obligations of each Party to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent, Merger Sub and the Company, as the case may be, to the extent permitted by applicable Law:
(a) Company Stockholder Approval. The Company shall have obtained the Company Stockholder Approval.
(b) Government Consents. (i) The waiting period (or extensions thereof), and any commitments not to close before a certain date under a timing agreement entered into with Governmental Entities, applicable to the consummation of the Merger under the HSR Act relating to the Transactions shall have expired, been terminated or otherwise waived and (ii) all applicable filings, registrations, waiting periods (or extensions thereof) and approvals and clearances under each other applicable Regulatory Law of the jurisdictions contemplated by Section 7.1(b) of the Company Disclosure Letter shall have been made, expired, terminated or obtained, as the case may be, and remain in effect, without the imposition, individually or in the aggregate, of a Burdensome Condition.
(c) No Legal Prohibition. No Governmental Entity of competent jurisdiction shall have (i) enacted, issued or promulgated any Law that is in effect as of immediately prior to the Effective Time or (ii) issued or granted any order, injunction, decree or ruling (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the Effective Time, in each case, which has the effect of (x) restraining, enjoining, making illegal or otherwise prohibiting the consummation of the Merger or (y) imposing a Burdensome Condition, unless agreed to in writing by Parent.
Section 7.2. Conditions to Obligations of Parent. The obligations of Parent and Merger Sub to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent and Merger Sub, as the case may be, to the extent permitted by applicable Law:
(a) Representations and Warranties. (A) The representations and warranties of the Company set forth in Section 3.1(a) (other than the last sentence thereof) (Qualification, Organization, Subsidiaries, etc.), the first sentence of Section 3.1(b) (Qualification, Organization, Subsidiaries, etc.), Section 3.3 (Corporate Authority), Section 3.22 (Opinion of Financial Advisor), Section 3.23 (State Takeover Statutes; Anti-Takeover Laws) and Section 3.25 (Finders and Brokers) (x) that are qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing (except representations and warranties that by
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their terms speak specifically as of another date, in which case as of such date) and (y) that are not qualified by materiality or Company Material Adverse Effect shall be true and correct in all material respects as of the date hereof and shall be true and correct in all material respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (B) the representations and warranties of the Company set forth in Section 3.2(a) (Capitalization), Section 3.2(c) (Capitalization), Section 3.2(d) (Capitalization) and Section 3.2(e) (Capitalization) shall be true and correct other than for de minimis inaccuracies as of the date hereof and shall be true and correct other than for de minimis inaccuracies as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (C) the representations and warranties of the Company set forth in Section 3.8(a) (Absence of Certain Changes or Events) shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing; and (D) the other representations and warranties of the Company set forth in this Agreement (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) shall be true and correct as of the date hereof and shall be true and correct as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except, with respect to this clause (D), where any failures of any such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed or complied in all material respects with the obligations, covenants and agreements required to be performed or complied with by it under the Agreement at or prior to the Closing.
(c) No Company Material Adverse Effect. A Company Material Adverse Effect shall not have, individually or in the aggregate, occurred on or after the date of the Agreement and be continuing as of immediately prior to the Closing.
(d) Company Officer’s Certificate. Parent shall have received a certificate, dated as of the Closing Date, signed by the chief executive officer, chief financial officer or another executive officer of the Company certifying that each of the conditions set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c) has been satisfied.
Section 7.3. Conditions to Obligations of the Company. The obligations of the Company to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by the Company to the extent permitted by applicable Law:
(a) Representations and Warranties. (A) The representations and warranties of Parent and Merger Sub set forth in Section 4.1 (Qualification, Organization, etc.) (with respect to the first sentence only) and Section 4.2 (Corporate Authority) (x) that are qualified by materiality or Parent Material Adverse Effect shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which
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case as of such date) and (y) that are not qualified by materiality or Parent Material Adverse Effect shall be true and correct in all material respects as of the date hereof and shall be true and correct in all material respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); and (B) the other representations and warranties of Parent and Merger Sub set forth in this Agreement shall be true and correct (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) as of the date hereof and as of the Closing as if made on and as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except where the failure of any such representations and warranties to be so true and correct (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) Performance of Obligations of Parent. Each of Parent and Merger Sub shall have performed or complied in all material respects with the obligations, covenants and agreements required to be performed or complied with by it under the Agreement at or prior to the Closing.
(c) Parent Officer’s Certificate. The Company shall have received a certificate, dated as of the Closing Date, signed by the chief executive officer, chief financial officer or another executive officer of Parent certifying that each of the conditions set forth in Section 7.3(a) and Section 7.3(b) has been satisfied.
Article VIII
TERMINATION
Section 8.1. Termination. This Agreement may be terminated and the Merger and the other Transactions may be abandoned at any time before the Closing, as follows (with any termination by Parent also being an effective termination by Merger Sub):
(a) by mutual written consent of Parent and the Company;
(b) by the Company, in the event that (i) Parent and/or Merger Sub shall have breached, failed to perform or violated their respective covenants or agreements under this Agreement or (ii) any of the representations and warranties of Parent or Merger Sub set forth in this Agreement shall have become inaccurate, in either case of clause (i) or (ii) in a manner that would give rise to the failure of a condition set forth in Section 7.3(a) or Section 7.3(b) and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is not cured by Parent or Merger Sub, as applicable, before the earlier of (x) the Business Day immediately prior to the Outside Date and (y) the thirtieth (30th) calendar day following receipt of written notice from the Company of such breach, failure to perform, violation or inaccuracy; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(b) if the Company is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would give rise to the failure of a condition set forth in Section 7.2(a), Section 7.2(b) or Section 7.2(c);
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(c) by Parent, in the event that (i) the Company shall have breached, failed to perform or violated its covenants or agreements under this Agreement or (ii) any of the representations and warranties of the Company set forth in this Agreement shall have become inaccurate, in either case of clause (i) or (ii) in a manner that would give rise to the failure of a condition set forth in Section 7.2(a), Section 7.2(b) or Section 7.2(c) and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is not cured by the Company before the earlier of (x) the Business Day immediately prior to the Outside Date and (y) the thirtieth (30th) calendar day following receipt of written notice from Parent of such breach, failure to perform, violation or inaccuracy; provided that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(c) if Parent or Merger Sub is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would give rise to the failure of a condition set forth in Section 7.3(a) or Section 7.3(b);
(d) by either Parent or the Company if the Closing has not occurred on or before the first anniversary of the date hereof (as such date may be extended or amended pursuant to this Section 8.1(d), the “Outside Date”); provided that (i) if, on the Outside Date, all of the conditions to Closing, other than the conditions set forth in Section 7.1(b) and Section 7.1(c) (to the extent any such injunction or order is in respect of, or any such Law is, the HSR Act or any other Regulatory Law) and those conditions that by their nature are to be satisfied at Closing (but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), shall have been satisfied or waived, then the Outside Date shall automatically be extended one (1) time for all purposes hereunder for an additional ninety (90) days, which date shall thereafter be deemed to be the Outside Date and (ii) if on the Outside Date as so extended pursuant to clause (i) of this Section 8.1(d), all of the conditions to Closing, other than the conditions set forth in Section 7.1(b) and Section 7.1(c) (to the extent any such injunction or order is in respect of, or any such Law is, the HSR Act or any other Regulatory Law) and those conditions that by their nature are to be satisfied at Closing (but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), shall have been satisfied or waived, then the Outside Date shall automatically be extended one (1) additional time for all purposes hereunder for an additional ninety (90) days, which date shall thereafter be deemed to be the Outside Date; provided, further, notwithstanding the foregoing provisions of this Section 8.1(d), Parent and the Company may mutually agree in writing to amend the Outside Date to any other date as agreed; provided, further, that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any Party whose action or failure to fulfill any obligation under this Agreement has been a proximate cause of the failure of the Transactions to be consummated by the Outside Date and such action or failure to act constitutes a material breach of this Agreement;
(e) by Parent, prior to the time the Company Stockholder Approval is obtained, if (i) the Company Board of Directors shall have effected a Change of Recommendation (whether or not in compliance with this Agreement) or (ii) the Company has materially breached Section 5.2;
(f) by either the Company or Parent if a Governmental Entity of competent jurisdiction shall have issued a final, nonappealable order, injunction, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the
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Transactions or any Law that permanently makes consummation of the Transactions illegal or otherwise prohibited shall be in effect;
(g) by either the Company or Parent, if the Company Stockholder Approval shall not have been obtained upon a vote taken thereon at the Company Stockholders Meeting duly convened therefor or at any adjournment or postponement thereof; or
(h) by the Company, prior to the time the Company Stockholder Approval is obtained, in order to effect a Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a Superior Proposal; provided that (i) the Company has complied in all material respects with the terms of Section 5.2, and (ii) substantially concurrently with or prior to (and as a condition to) the termination of this Agreement, the Company pays or causes to be paid to Parent the Termination Fee.
Section 8.2. Effect of Termination.
(a) In the event of the valid termination of this Agreement as provided in Section 8.1, written notice thereof shall forthwith be given to the other Party or Parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void and there shall be no liability on the part of Parent, Merger Sub or the Company, except that the Confidentiality Agreement, the Clean Room Agreement, the Joint Defense Agreement, this Section 8.2, Section 6.2(c) (clause (i) of the second sentence only) and Section 9.3 through Section 9.12 shall survive such termination; provided that nothing herein shall relieve any Party from liability for Fraud or willful breach of this Agreement prior to such termination. For purposes of this Agreement, (i) “willful breach” shall mean an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and actually knows would, or would reasonably be expected to, be or cause a material breach of this Agreement and (ii) “Fraud” shall mean common law fraud that is committed with actual knowledge of falsity and with the intent to deceive or mislead another.
(b) Termination Fees.
(i) If (x) this Agreement is terminated (I) by Parent or the Company pursuant to Section 8.1(d) or (II) by Parent or the Company pursuant to Section 8.1(f) (with respect to Section 8.1(f), solely to the extent that any such injunction, order, decree or ruling is in respect of, or any such Law relates to, the HSR Act or any other applicable Regulatory Law) (provided, that, in order for a termination by the Company to trigger the Regulatory Termination Fee under this clause (II), the Company must deliver a signed written notice (the “Company Notice”) to Parent stating that (A) such termination shall not be effective until five (5) Business Days following receipt of such notice by Parent (the “Notice Period”) and (B) if Parent and Merger Sub deliver a signed written notice (the “Parent Notice”) to the Company stating that they irrevocably waive the condition in Section 7.1(c) with respect to such injunction, order, decree, ruling or Law within the Notice Period then such termination by the Company under this clause (II) shall be null and void and deemed withdrawn; provided, further, for the avoidance of doubt that, if Parent and Merger Sub deliver the Parent Notice within the Notice Period, then such termination by the Company under this clause (II) shall be null and void and deemed withdrawn and the Company,
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Parent and Merger Sub shall be deemed to have irrevocably waived the condition in Section 7.1(c) with respect to such injunction, order, decree, ruling or Law), (y) on the date of such termination all of the conditions to the Closing set forth in Section 7.1, Section 7.2(a), Section 7.2(b), Section 7.2(c) and Section 7.2(d) are satisfied or duly waived (other than those conditions that by their nature are to be satisfied at Closing, each of which is capable of being satisfied at the Closing if the Closing were to take place on such date), other than the conditions set forth in Section 7.1(b) or Section 7.1(c) (with respect to Section 7.1(c), solely to the extent that any such injunction, order, decree or ruling is in respect of, or any such Law relates to, the HSR Act or any other applicable Regulatory Law) and (z) in the case of a termination by the Company pursuant to Section 8.1(d) or Section 8.1(f), (1) the Company has delivered a signed written notice (which may, if applicable, be included in the Company Notice) to Parent stating that the Company irrevocably waives in writing the conditions set forth in Section 7.1(c) with respect to such injunction, order, decree, ruling or Law, if any, and irrevocably confirms in writing to Parent that it is ready, willing and able to consummate the Closing (and, in the case of a termination by the Company pursuant to Section 8.1(d), upon delivery of such notice the Outside Date shall be extended by five (5) Business Days) and (2) Parent and Merger Sub, in the case of a termination by the Company pursuant to Section 8.1(d), fail to effect the Closing, or in the case of a termination by the Company pursuant to Section 8.1(f), fail to effect the Closing or deliver the Parent Notice, in each case within five (5) Business Days following receipt of such notice by Parent (which period may, if applicable, coincide with the Notice Period), then Parent shall pay to the Company a fee of $300,000,000 in cash (the “Regulatory Termination Fee”) within two (2) Business Days after such termination. In the event any amount is payable to the Company pursuant to this clause (i), such amount shall be paid by wire transfer of immediately available funds to an account designated in writing by the Company. For the avoidance of doubt, in no event shall Parent be obligated to pay the Regulatory Termination Fee on more than one occasion.
(ii) If (A) Parent or the Company terminates this Agreement pursuant to Section 8.1(d) or Section 8.1(g), or Parent terminates this Agreement pursuant to Section 8.1(c) as a result of a breach, failure to perform or violation described in such Section that (except with respect to a breach of Section 5.2(a)) first occurred following the making of an Acquisition Proposal of the type referenced in the following clause (B), after the date hereof and prior to the date of such termination (or prior to the Company Stockholder Approval in the case of termination pursuant to Section 8.1(g)), a bona fide Acquisition Proposal is publicly disclosed (whether by the Company or a third party), or otherwise made known to the Company Board of Directors or the Company’s management, and in each case, is not withdrawn (publicly, if publicly disclosed) at least three (3) Business Days prior to the earlier of the date of the Company Stockholders Meeting and the date of such termination and (C) within twelve (12) months of such termination, an Acquisition Proposal is consummated or a definitive agreement with respect to an Acquisition Proposal is entered into, then on or prior to the date that is the earlier of (x) the date any such Acquisition Proposal is consummated and (y) the date of entry in any such definitive agreement, the Company shall pay or caused to be paid to Parent a fee of $191,390,000 in cash (the “Termination Fee”). Solely for purposes of this Section 8.2(b)(ii), the term “Acquisition Proposal” shall have the meaning assigned to such term in Annex A, except that all references to “fifteen percent (15%)” and “eighty five percent (85%)” therein shall be deemed to be references to “fifty percent (50%).”
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(iii) If (x) Parent terminates this Agreement pursuant to Section 8.1(e) or (y) the Company terminates this Agreement pursuant to Section 8.1(d) at a time when Parent would be permitted to terminate this Agreement pursuant to Section 8.1(e), within two (2) Business Days after such termination, the Company shall pay or caused to be paid to Parent the Termination Fee.
(iv) If the Company terminates this Agreement pursuant to Section 8.1(h), substantially concurrently with or prior to (and as a condition to) such termination, the Company shall pay or caused to be paid to Parent the Termination Fee.
(v) In the event any amount is payable by the Company pursuant to the preceding clauses (ii), (iii) or (iv), such amount shall be paid by wire transfer of immediately available funds to an account designated in writing by Parent. For the avoidance of doubt, in no event shall the Company be obligated to pay the Termination Fee on more than one occasion.
(c) Each Party acknowledges that the agreements contained in this Section 8.2 are an integral part of the Transactions and that, without these agreements, the Parties hereto would not enter into this Agreement. Each Party further acknowledges that each of the Termination Fee and the Regulatory Termination Fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate Parent and Merger Sub or the Company, as applicable, in the circumstances in which the Termination Fee or the Regulatory Termination Fee, as applicable, 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 Transactions. In addition, if the Company or Parent, as applicable, fails to pay in a timely manner any amount due pursuant to Section 8.2(b), then (i) the Company or Parent, as applicable, shall reimburse the other Party for all reasonable out-of-pocket costs and expenses (including disbursements and fees of counsel) incurred in the collection of such overdue amounts, including in connection with any related claims, actions or proceedings commenced and (ii) the Company or Parent, as applicable, shall pay to the other Party interest on the amounts payable pursuant to Section 8.2(b) from and including the date payment of such amounts were due to but excluding the date of actual payment at the prime rate set forth in the Wall Street Journal in effect on the date such payment was required to be made. Notwithstanding anything to the contrary in this Agreement, (1) except for the right to seek monetary damages for Fraud (in each case, solely as it relates to (x) the representations and warranties expressly made in Article III, (y) certificates delivered pursuant hereto, or (z) filings submitted to Governmental Entities pursuant hereto (or documents submitted to such Governmental Entities in connection with such filings)) or willful breach occurring prior to the valid termination of this Agreement, and without limiting Parent’s or Merger Sub’s, right to specific performance in accordance with Section 9.12, (A) the Termination Fee (and any other amounts expressly required by this Section 8.2, if any) shall be the sole and exclusive monetary remedy available to Parent and Merger Sub in connection with this Agreement and the Transactions in any circumstance in which the Termination Fee becomes due and payable and is paid by the Company in accordance with this Agreement, and (B) upon Parent’s receipt of the full Termination Fee (and any other amounts required by this Section 8.2(c)) pursuant to this Section 8.2 in circumstances in which the Termination Fee is payable, none of the Company, any
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Company Subsidiary or any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions, except for Fraud (in each case, solely as it relates to (x) the representations and warranties expressly made in Article III, (y) certificates delivered pursuant hereto, or (z) filings submitted to Governmental Entities pursuant hereto (or documents submitted to such Governmental Entities in connection with such filings)) or willful breach (each as defined in Section 8.2(a)), and (2) except for the right to seek monetary damages for Fraud (in each case, solely as it relates to (x) the representations and warranties expressly made in Article IV, (y) certificates delivered pursuant hereto, or (z) filings submitted to Governmental Entities pursuant hereto (or documents submitted to such Governmental Entities in connection with such filings)) or willful breach occurring prior to the valid termination of this Agreement, and without limiting the Company’s right to specific performance in accordance with Section 9.12, (A) the Regulatory Termination Fee (and any other amounts expressly required by this Section 8.2, if any) shall be the sole and exclusive monetary remedy available to the Company in connection with this Agreement and the Transactions in any circumstance in which the Regulatory Termination Fee becomes due and payable and is paid by Parent in accordance with this Agreement and (B) upon the Company’s receipt of the full Regulatory Termination Fee (and any other amounts required by this Section 8.2(c)) pursuant to this Section 8.2 in circumstances in which the Regulatory Termination Fee is payable, none of Parent, any Parent Subsidiary or any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions, except for Fraud (in each case, solely as it relates to (x) the representations and warranties expressly made in Article IV, (y) certificates delivered pursuant hereto, or (z) filings submitted to Governmental Entities pursuant hereto (or documents submitted to such Governmental Entities in connection with such filings)) or willful breach (each as defined in Section 8.2(a)). For the avoidance of doubt, Parent or the Company, as applicable, may seek specific performance to cause the other Party to consummate the Transactions in accordance with Section 9.12 and the payment of the Termination Fee or Regulatory Termination Fee, as applicable, pursuant to this Section 8.2(c), but in no event shall Parent or the Company, as applicable, be entitled to both (i) specific performance to cause the Company to consummate the Transactions in accordance with Section 9.12 and (ii) the payment of the Termination Fee or Regulatory Termination Fee, as applicable, pursuant to this Section 8.2(c).
Article IX
MISCELLANEOUS
Section 9.1. Amendment and Modification; Waiver.
(a) Subject to applicable Law and except as otherwise provided in this Agreement, this Agreement may be amended, modified and supplemented by written agreement of each of the Parties.
(b) At any time and from time to time prior to the Effective Time, either the Company, on the one hand, or Parent and Merger Sub, on the other hand, may, to the extent legally allowed and except as otherwise set forth herein, (i) extend the time for the performance of any of
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the obligations or other acts of the other Parties, as applicable, (ii) waive any inaccuracies in the representations and warranties made by the other Parties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for their respective benefit contained herein. Any agreement on the part of Parent, Merger Sub or the Company to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of Parent or the Company, as applicable. No failure or delay by the Company, Parent or Merger Sub in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.
Section 9.2. NonSurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Effective Time.
Section 9.3. Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such costs and expenses; provided, however, that Parent shall pay all filing fees under the HSR Act and any other applicable Regulatory Law relating to the Transactions.
Section 9.4. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), by electronic mail (notice deemed given upon transmission so long as there is no return error message or other notification of non-delivery received by the sender; provided that, electronic mail received after 6:00 p.m., Pacific Time, shall be deemed received on the next day) or sent by a nationally recognized overnight courier service or express delivery service (notice deemed given upon receipt of proof of delivery), to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
if to Parent or Merger Sub, to:
Salesforce, Inc.
Salesforce Tower
415 Mission Street, 3rd Fl
San Francisco, California
94105
Email: [***]
Attention: Chief Legal Officer
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
| Email: | ajnussbaum@wlrk.com |
| mlu@wlrk.com |
| Attention: | Andrew J. Nussbaum |
| Meng Lu |
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if to the Company, to:
Braze, Inc.
63 Madison Building
28 East 28th Street, Floor 12
New York, New York 10016
Email: [***]
Attention: General Counsel
with copies to:
Davis Polk & Wardwell LLP
900 Middlefield Road
Redwood City, CA 94063
| Email: | paul.scrivano@davispolk.com |
| cheryl.chan@davispolk.com |
| Attention: | Paul S. Scrivano |
| Cheryl Chan |
Section 9.5. Interpretation. When a reference is made in this Agreement to sections, such reference shall be to a section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “affiliates” shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The word “extent” and the phrase “to the extent” when used in this Agreement shall mean the degree to which a subject or other things extends, and such word or phrase shall not merely mean “if.” The term “or” is not exclusive, and shall be interpreted as “and/or.” The phrases “the date of this Agreement,” “the date hereof,” “of even date herewith” and terms of similar import, shall be deemed to refer to the date set forth in the preamble to this Agreement. The phrase “made available,” when used in reference to anything made available to Parent or its Representatives shall be deemed to mean uploaded to and/or made available to Parent and its Representatives no less than one (1) Business Day prior to the date hereof in the online data room hosted on behalf of the Company under the name “Project Banff” (which, for the avoidance of doubt, includes the materials provided in any folder of such data room, including the “clean room” and other folders to which a limited subset of Parent employees and Parent’s Representatives have access). The table of contents and headings set forth in this Agreement or any schedule delivered pursuant to this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or such schedule or any term or provision hereof or thereof. All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated or the context otherwise requires. A reference to any specific Law or to any provision of any Law, whether or not followed by the phrase “as amended,” includes any amendment to, and any modification, re-enactment or successor thereof, any legislative provision substituted therefor and all rules, regulations and statutory instruments issued thereunder or pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as a specific date, references to any specific Law will be deemed to refer to such legislation or provision (and all rules, regulations and statutory instruments issued thereunder or pursuant thereto) as of such date. If any period expires on a day that is not a Business Day or event or condition is required by the terms of this
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Agreement to occur or be fulfilled on a day that is not a Business Day, such period shall expire or such event or condition shall occur or be fulfilled, as the case may be, on the next succeeding Business Day. Any action required to be taken “within” a specified time period following the occurrence of an event shall be required to be taken no later than 5:00 P.M. U.S. Pacific Time on the last day of such time period, which shall be calculated starting with the day immediately following the date of the event. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
Section 9.6. Counterparts. This Agreement may be executed manually or by other electronic transmission by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Parties. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .pdf or DocuSign format shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
Section 9.7. Entire Agreement; ThirdParty Beneficiaries.
(a) This Agreement, the Voting Agreement, the Clean Room Agreement, the Joint Defense Agreement and the Confidentiality Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all other prior agreements (except that the Confidentiality Agreement shall be deemed amended hereby so that until the termination of this Agreement in accordance with Section 8.1, Parent and Merger Sub shall be permitted to take the actions contemplated by this Agreement) and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof and thereof. The Company Disclosure Letter and the Parent Disclosure Letter referred to herein shall not be deemed part of this Agreement for purposes of any provision of the DGCL but shall have the effects provided in this Agreement and in the last sentence of the second paragraph of each of the Company Disclosure Letter and the Parent Disclosure Letter.
(b) Nothing in this Agreement (including the Company Disclosure Letter and the Parent Disclosure Letter) or in the Confidentiality Agreement, express or implied, is intended to confer upon any Person other than the Parties any rights or remedies hereunder or thereunder, except (i) as provided in Section 6.4, and (ii) if the Effective Time occurs, the right of the Company Stockholders under Section 2.1(a) and holders of Company Equity Awards under Section 2.3 to receive the Per Share Merger Consideration (if applicable) pursuant to the terms thereof. The Company shall be entitled, on behalf of the Company Stockholders and holders of Company Equity Awards (each of which are third party beneficiaries of this Agreement to the extent required for this provision to be enforceable), to pursue specific performance as set forth in Section 9.12 or, if specific performance is not sought or granted as a remedy, claims for damages in accordance with this Agreement (which, to the extent proven and awarded by a court of competent jurisdiction, and pursuant to Section 261 of the DGCL, may include the benefit of the bargain lost by the Company Stockholders and holders of Company Equity Awards, it being understood and agreed that any such damages award shall take account of the Regulatory Termination Fee if paid in accordance with this Agreement) in the event of a breach hereof by Parent or Merger Sub of this Agreement that gives rise to any such claim, in each case, pursuant to and in accordance
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with Section 8.2, it being agreed that the rights granted pursuant to this sentence shall be enforceable only by the Company, on behalf of and as representative of and agent for the Company Stockholders and holders of Company Equity Awards, and in no event shall any Company Stockholder or holder of Company Equity Awards be entitled to enforce any of such rights, or any of Parent’s or Merger Sub’s obligations, under this Agreement in the event of any such breach, but rather the Company shall have the sole and exclusive right to do so as agent for such holders.
Section 9.8. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Merger is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Merger is fulfilled to the extent possible.
Section 9.9. Governing Law; Jurisdiction.
(a) This Agreement and any disputes relating to or arising out of this Agreement and the transactions contemplated hereby (whether based in contract, tort or otherwise) shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the Law of any other state.
(b) Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement and the rights and obligations hereunder or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding, except in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (iii) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts; and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each Party to this Agreement irrevocably consents to service of process inside or outside the territorial jurisdiction of the courts referred to in this Section 9.9(b) in the manner provided for notices in Section 9.4. Nothing in this
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Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law.
Section 9.10. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 9.10.
Section 9.11. Assignment. This Agreement shall not be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties. Subject to the preceding sentence, but without relieving any Party of any obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
Section 9.12. Enforcement; Remedies.
(a) Except as otherwise expressly provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.
(b) The Parties agree that irreparable injury, for which monetary damages (even if available) would not be an adequate remedy, will occur in the event that any of the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate the Merger or the other Transactions) is not performed in accordance with its specific terms or is otherwise breached. Accordingly, it is agreed that each Party shall be entitled to an injunction or injunctions to prevent or remedy any breaches or threatened breaches of this Agreement by any other Party, a decree or order of specific performance specifically enforcing the terms and provisions of this Agreement and any further equitable relief, in each case in accordance with Section 9.9, this being in addition to any other remedy to which such Party is entitled under the terms of this Agreement at law or in equity.
(c) The Parties’ rights in this Section 9.12 are an integral part of the Transactions and each Party hereby waives any objections to any remedy referred to in this Section 9.12 (including any objection on the basis that there is an adequate remedy at Law or that an award of such remedy is not an appropriate remedy for any reason at Law or equity). For the avoidance of doubt, each Party agrees that there is not an adequate remedy at Law for a breach of this Agreement by any Party. In the event any Party seeks any remedy referred to in this
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Section 9.12, such Party shall not be required to obtain, furnish, post or provide any bond or other security in connection with or as a condition to obtaining any such remedy.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.
| SALESFORCE, INC. | ||
| By: | /s/ John Somorjai | |
| Name: | John Somorjai | |
| Title: | President, Corporate Development and Investments | |
| BANFF ACQUISITION SUB INC. | ||
| By: | /s/ John Somorjai | |
| Name: | John Somorjai | |
| Title: | Vice President | |
[Signature Page to Agreement and Plan of Merger]
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.
| BRAZE, INC. | ||
| By: | /s/ William Magnuson | |
| Name: | William Magnuson | |
| Title: | Chief Executive Officer | |
[Signature Page to Agreement and Plan of Merger]
Annex A
Certain Definitions
For the purposes of this Agreement, the term:
“Acceptable Confidentiality Agreement” means a confidentiality agreement entered into after the date hereof that contains terms that (i) are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement (it being understood that such confidentiality agreement need not contain a “standstill” or similar provision) and (ii) do not in any way restrict the Company or its Representatives from complying with its disclosure obligations under this Agreement.
“Acquisition Proposal” means any offer, proposal or indication of interest from a Person (other than a proposal or offer by Parent or any Parent Subsidiary) at any time relating to any transaction or series of related transactions (other than the Transactions) involving: (a) any acquisition or purchase by any person, directly or indirectly, of more than fifteen percent (15%) of any class of outstanding voting or equity securities of the Company (whether by voting power or number of shares), or any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person beneficially owning more than fifteen percent (15%) of any class of outstanding voting or equity securities of the Company (whether by voting power or number of shares); (b) any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving the Company and a person pursuant to which the Company Stockholders immediately preceding such transaction hold less than eighty five percent (85%) of the equity interests in the surviving, resulting or ultimate parent entity of such transaction (whether by voting power or number of shares); or (c) any sale, lease, exchange, transfer or other disposition to a person of more than fifteen percent (15%) of the consolidated assets of the Company and the Company Subsidiaries (measured by the fair market value thereof).
“Actual Performance” means the actual level of performance, as determined by the Compensation and Leadership Development Committee of the Company Board of Directors, as of the latest practicable date prior to the Effective Time, which shall be done in the ordinary course of business.
“AI System” means any system or Software that: (a) consists of, incorporates, is based on, or uses artificial intelligence (including as implemented through any neural network, large language model, machine learning, natural language processing or supervised, semi-supervised, unsupervised or reinforcement learning algorithms or other technologies now existing or that may exist in the future) or (b) is otherwise designed to or can operate with varying levels of autonomy and that may exhibit adaptiveness after deployment and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.
“Anti-Corruption Law” means any Law related to combating bribery and corruption, including legislation implementing the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions or the U.N. Convention Against Corruption
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including, the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and the U.K. Bribery Act 2010.
“Assumed Company Restricted Shares” means the shares of Class A Common Stock held by the individuals listed on Section 2.3(i)(A) of the Company Disclosure Letter that are subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code) as of immediately prior to the Effective Time.
“Business Days” means any day, other than a Saturday, Sunday and any day which is a legal holiday under the Laws of the State of California or the State of New York or is a day on which banking institutions located in such states are authorized or required by applicable Law or other governmental action to close.
“Cashout Company Restricted Shares” means the shares of Class A Common Stock held by the individuals listed on Section 2.3(i)(B) of the Company Disclosure Letter that are subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code) as of immediately prior to the Effective Time.
“Clean Room Agreement” means the Clean Room Agreement, dated as of August 28, 2026, between Parent and the Company.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Bylaws” means the Amended and Restated Bylaws of the Company as in effect on the date hereof.
“Company Charter” means the Amended and Restated Certificate of Incorporation of the Company as in effect on the date hereof.
“Company Equity Awards” means the Company Options, the Company RSUs, the Company PSUs and the Company Restricted Shares.
“Company Equity Plans” means (i) the Company’s 2021 Equity Incentive Plan and (ii) the Company’s Amended and Restated 2011 Equity Incentive Plan.
“Company ESPP” means the Company’s 2021 Employee Stock Purchase Plan.
“Company Governing Documents” means the Company Bylaws and the Company Charter.
“Company Intellectual Property” means all Intellectual Property owned by (or claimed to be owned by), or filed in the name of the Company or any Company Subsidiary.
“Company Material Adverse Effect” means any Effect that, individually or in the aggregate, has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, financial condition, or operations of the Company and the Company Subsidiaries, taken as a whole; provided, however, that no Effects to the extent resulting or arising from the following shall be deemed to constitute a Company Material Adverse Effect or shall be taken into account when determining whether a Company Material Adverse Effect exists
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or has occurred: (a) any changes in United States, regional, global or international economic conditions, including any changes affecting financial, credit, foreign exchange or capital market conditions; (b) any changes in conditions generally affecting the cross-channel customer messaging software industry; (c) any changes in political, geopolitical regulatory or legislative conditions in the United States or any other country or region of the world; (d) any changes after the date hereof in GAAP or the authoritative interpretation thereof; (e) any changes after the date hereof in applicable Law or the authoritative interpretation thereof; (f) any failure by the Company to meet any internal or published projections, estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from this definition of a “Company Material Adverse Effect” may be taken into account in determining whether there has been a Company Material Adverse Effect); (g) any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters epidemics, pandemics, or similar force majeure events, including any material worsening of such conditions threatened or existing as of the date hereof, or any action taken by any Governmental Entity in response to any of the foregoing; (h) the execution and delivery of this Agreement, the identity of Parent or any Parent Subsidiary, the pendency or consummation of this Agreement, the Merger and the other Transactions, including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives, or the public announcement of this Agreement or the Transactions, including the initiation or settlement of any litigation arising out of or relating to this Agreement or the Transactions commenced by or involving (1) any Governmental Entity in connection with this Agreement or the Transactions or (2) any current or former stockholder of the Company (on their own or on behalf of the Company), to the extent relating to this Agreement or the Transactions, the identity of Parent or any Parent Subsidiary, the pendency or consummation of this Agreement, the Merger and the other Transactions, or the public announcement of this Agreement and the Transactions, as applicable (provided that this clause (h) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery or public announcement of this Agreement, the pendency or consummation of this Agreement, the Merger and the other Transactions); and (i) any action or failure to take any action which action or failure to act is requested in writing by Parent or otherwise expressly required to be taken by this Agreement (other than pursuant to Section 5.1(a)); provided that with respect to the exceptions set forth in clauses (a), (b), (c), (d), (e) and (g), if such Effect has had, or would reasonably be expected to have, a disproportionate adverse effect on the Company or any Company Subsidiary relative to other companies operating in the cross-channel customer messaging software industry, then only the incremental disproportionate adverse effect of such Effect that would reasonably be expected to occur shall be taken into account for the purpose of determining whether a Company Material Adverse Effect exists or has occurred.
“Company Option” means each option to purchase Class A Common Stock granted under any Company Equity Plan that is outstanding and unexercised immediately prior to the Effective Time.
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“Company Products” means any and all products and services, including Software as a service (SaaS) and any professional or consulting services, that are or have been in the three (3) years prior to the date of this Agreement marketed, offered, sold, licensed, made available or distributed by the Company or any Company Subsidiary.
“Company PSU” means each restricted stock unit award relating to shares of Class A Common Stock granted under any Company Equity Plan that is outstanding immediately prior to the Effective Time and subject to performance-based and service-based vesting requirements.
“Company Restricted Shares” means the Assumed Company Restricted Shares and the Cashout Company Restricted Shares.
“Company RSU” means each restricted stock unit award relating to shares of Class A Common Stock granted under any Company Equity Plan that is outstanding immediately prior to the Effective Time and subject solely to service-based vesting requirements.
“Company Subsidiaries” means the Subsidiaries of the Company.
“Company Systems” means the computer systems and other information technology, including any Software, servers, networks, workstations, hubs, circuits, switches, cloud storage and computing platforms and mobile devices, in each case, that are used or held for use, by the Company or any of its Subsidiaries for use in the conduct of its business.
“Confidentiality Agreement” means the Confidentiality Agreement, dated June 8, 2026, between Parent and the Company, as may be amended.
“Contract” means any legally binding written or oral agreement, contract, subcontract, settlement agreement, lease, sublease, instrument, permit, concession, franchise, binding understanding, note, option, bond, mortgage, indenture, trust document, loan or credit agreement, license, sublicense, insurance policy or other commitment or undertaking of any nature.
“Controlled Group Liability” means any and all liabilities (i) under Title IV of ERISA; (ii) under Section 302 of ERISA; (iii) under Sections 412 and 4971 of the Code; (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code; and (v) under corresponding or similar provisions of foreign laws or regulations, other than such liabilities that arise solely out of, or relate solely to, plans directly sponsored by the Company and the Company Subsidiaries.
“Conversion Ratio” means the quotient (rounded to the 4th decimal place) obtained by dividing (i) the Per Share Merger Consideration by (ii) the Parent Trading Price.
“Effect” means any change, effect, development, circumstance, condition, state of facts, event or occurrence.
“Environmental Law” means any and all applicable Law which (a) regulate or relate to the protection or clean-up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources, or, solely to the extent
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pertaining to exposure to Hazardous Substances, the health and safety of persons or property, including protection of the health and safety of employees or (b) impose liability or responsibility with respect to any of the foregoing, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“GDPR” means Regulation (EU) 2016/679 (General Data Protection Regulation) of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data as currently in effect and as may be amended from time to time.
“Governmental Entity” means (a) any supranational, national, federal, state, county, municipal, local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or administrative functions of or pertaining to government, (b) any public international governmental organization or (c) any agency, division, bureau, department, or other political subdivision of any government, entity or organization described in the foregoing clause (a) or (b) of this definition (including patent and trademark offices and self-regulatory organizations).
“Hazardous Substances” means any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, chemical compound, pollutant, hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, due to its deleterious or toxic characteristics, including any quantity of petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, lead paint, polychlorinated biphenyls (or PCBs), dioxins, dibenzofurans, heavy metals, radon gas, mold, mold spores, and mycotoxins.
“High-Risk AI Systems” means AI Systems that are “high risk” (or are similarly categorized) under applicable Law (including the European Union Artificial Intelligence Act).
“HSR Act” means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“Import Restrictions” means all applicable U.S. and foreign import Laws, except to the extent inconsistent with U.S. Law, including Title 19 Chapter 1 of the Code of Federal Regulations.
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“Indebtedness” means, with respect to any Person, (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all Indebtedness of others secured by any Lien on owned or acquired property of such Person, whether or not the Indebtedness secured thereby has been assumed; (d) all guarantees (or any other arrangement having the economic effect of a guarantee) by such Person of Indebtedness of others; (e) all finance and capital lease obligations and all synthetic lease obligations of such Person; (f) all obligations, contingent or otherwise, of such Person as an account party in respect of financial guaranties, bankers’ acceptances, letters of credit, letters of guaranty, surety bonds and other similar instruments, in each case, to the extent drawn; (g) all securitization transactions; (h) all obligations representing the deferred and unpaid purchase price of property (other than trade payables, accounts payable and other current liabilities, in each case that are not overdue and are incurred in the ordinary course of business consistent with past practice); or (i) net cash payment obligations of such Person under swaps, options, hedging agreements or arrangements and other derivative agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination).
“Information Privacy and Security Laws” means (a) any Law, rule, regulation or directive and all binding guidance issued by any Governmental Entity thereunder applicable to the Company or to any Company Subsidiary and (b) to the extent the Company has agreed to comply with the same, any binding applicable self-regulatory guidelines, in each case, relating to: (i) the privacy, protection, or security of Protected Information, including as relevant to the collection, storage, retention, processing, transfer, disclosure, sharing, disposal and destruction of Protected Information or (ii) requirements for websites and mobile applications, online behavioral advertising, tracking technologies, call or electronic monitoring or recording, or any outbound calling and text messaging, telemarketing, or email marketing. Without limiting the foregoing, “Information Privacy and Security Laws” includes, to the extent applicable to Company and Company Subsidiary, the Federal Trade Commission Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, the Children’s Online Privacy Protection Act, the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Reporting Act, the Health Insurance Portability and Accountability Act of 1996, as amended and supplemented by the Health Information Technology for Economic and Clinical Health Act of the American Recovery and Reinvestment Act of 2009 (together, “HIPAA”), the Gramm-Leach-Bliley Act, state privacy and data security laws, state social security number protection laws, state data breach notification laws, state consumer protection laws, the GDPR (and any European Union member states’ laws and regulations implementing the GDPR), the Canadian Personal Information Protection and Electronic Documents Act, India’s Information Technology Act, Japan’s Act on the Protection of Personal Information, Hong Kong’s Personal Data (Privacy) Ordinance, and Australia’s Privacy Amendment (Private Sector) Act 2000, as amended by the Privacy Amendment (Enhancing Privacy Protection) Act 2012, the Saudi Arabia Personal Data Protection Law, and other applicable data protection laws of the jurisdictions in which the Company or the Company Subsidiaries operate or which are applicable to their respective businesses.
“Intellectual Property” means all technology and intellectual property or other proprietary rights, whether statutory, common law or otherwise, in any jurisdiction throughout the world,
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including all: (a) inventions, invention disclosures, discoveries, improvements, patents and patent applications; (b) trademarks, service marks, trade dress, logos, slogans, brand names, trade names, Internet domain names and corporate names (whether or not registered), social media handles and other identifiers and indicia of origin, and all applications and registrations in connection therewith; (c) all works of authorship and copyrights (whether or not published), and all applications and registrations in connection therewith, including audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, mask works, and sound recordings; (d) Software and intellectual property rights in Software; (e) mask works and industrial designs, and all applications and registrations in connection therewith; (f) trade secrets and other intellectual property rights in confidential and proprietary information (including inventions, ideas, research and development information, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, schematics, specifications, research records, test information, financial, marketing and business data, customer and supplier lists, algorithms and information, pricing and cost information, business and marketing plans and proposals, and databases and compilations, including any and all data and collections of data); (g) renewals, extensions, combinations, statutory invention registrations, provisionals, continuations, continuations-in-part, reexaminations, divisions or reissues of any of the foregoing; and (h) rights of attribution and integrity and other moral rights of an author.
“In-the-Money Company Option” means each Company Option with a per share exercise price that is less than the amount of the Per Share Merger Consideration.
“IRS” means the U.S. Internal Revenue Service.
“Joint Defense Agreement” means the Joint Defense Agreement, dated as of September 19, 2026, between Davis Polk & Wardwell LLP and Wachtell, Lipton, Rosen & Katz, on behalf of the Company and Parent, respectively.
“Knowledge” will be deemed to be, as the case may be, the actual knowledge of (a) the individuals set forth on Section 1.1(a) of the Parent Disclosure Letter with respect to Parent or Merger Sub or (b) the individuals set forth on Section 1.1(a) of the Company Disclosure Letter with respect to the Company, in each case after reasonable inquiry of those employees of such Party and its Subsidiaries who would reasonably be expected to have actual knowledge of the matter in question.
“Law” means any law (including common law), statute, requirement, code, rule, regulation, order, ordinance, judgment or decree or other pronouncement of any Governmental Entity.
“Lien” means any lien, pledge, hypothecation, mortgage, deed of trust, security interest, conditional or installment sale agreement, encumbrance, covenant, charge, claim, option, right of first refusal, easement, right of way, encroachment, occupancy right, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, or any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset), whether voluntarily incurred or arising by operation of Law.
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“Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 3(37) of ERISA or any plan that has two (2) or more contributing sponsors at least two (2) of whom are not under common control within the meaning of Section 4063 of ERISA.
“Nasdaq” means The Nasdaq Stock Market LLC.
“National Security Laws” means the National Industrial Security Program Operating Manual (“NISPOM”), 32 C.F.R. Part 117, and any supplements, amendments, or revised editions thereof.
“Net Share” means, with respect to a Company Option, the quotient obtained by dividing (a) the product of (i) the excess, if any, of the Per Share Merger Consideration over the per share exercise price of such Company Option, multiplied by (ii) the number of shares of Class A Common Stock subject to such Company Option immediately prior to the Effective Time, by (b) the Per Share Merger Consideration.
“NYSE” means the New York Stock Exchange.
“Open Source License” means any license that is approved by the Open Source Initiative and listed at http://www.opensource.org/licenses or the Free Software Foundation and listed at https://www.gnu.org/licenses/license-list.en.html, and any similar license for “free,” “publicly available” or “open source” software, including the Affero General Public License, Server Side Public License (SSPL), GNU General Public License, the Lesser GNU General Public License, the Apache License, the BSD License, Mozilla Public License (MPL), the MIT License or any other license that otherwise requires, as a condition of use, modification, distribution, or making available of the Software or other technology licensed thereunder, that other Software or other technology incorporated into, derived from, distributed, or made available with, such Software or other technology (a) be, in the case of Software, disclosed or distributed in Source Code form, (b) be licensed for purposes of preparing derivative works, (c) be licensed under terms that allow Company Products or portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled, or (d) be redistributed at no or de minimis charge.
“Ordinary Course License” means standard non-exclusive licenses contained in: (a) customer subscription, terms of use or terms of service, license or other service or similar agreements, in each case, with respect to Company Products; (b) confidentiality and invention assignment agreements entered into in the ordinary course of business consistent with past practice; (c) end-user license agreements granted to the Company or Company Subsidiaries for their use of Software or information technology services on standard terms that are generally commercially available; or (d) agreements based on a form used by the Company or Company Subsidiary that has been made available to Parent (other than stand-alone licenses, covenants not to assert, releases, agreements not to enforce or prosecute, or other immunities or similar rights with respect to patents or trademarks), including each form of (i) distributor, reseller, or sales representatives agreement, (ii) agreement with employees and independent contractors, and (iii) vendor, professional services, outsourced development, consulting, support or maintenance agreement, in each case of the foregoing clauses (a) through (d), that are granted in the ordinary course of business consistent with past practice.
A-8
“Parent Common Stock” means shares of common stock, par value $0.001 per share, of Parent.
“Parent Material Adverse Effect” means any Effect that prevents, materially impairs or materially delays, or has a material adverse effect on, the ability of Parent or Merger Sub to consummate the Transactions by the Outside Date.
“Parent Subsidiaries” means the Subsidiaries of Parent.
“Parent Trading Price” means the volume weighted average closing sale price of one (1) share of Parent Common Stock as reported on NYSE for the twenty (20) consecutive trading days ending on the trading day immediately preceding the Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“PCI DSS” means the Payment Card Industry Data Security Standard, issued by the Payment Card Industry Security Standards Council, as may be revised from time to time.
“Permitted Liens” means any Lien (i) for Taxes or governmental assessments, charges or claims of payment not yet due or that is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (ii) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Lien arising by operation of Law in the ordinary course of business for amounts not yet delinquent or that are being contested in good faith by appropriate proceedings; (iii) is specifically disclosed on the most recent consolidated balance sheet of the Company or the notes thereto included in the Company SEC Documents as of the date hereof as securing indebtedness or liabilities reflected in the most recent consolidated balance sheet of the Company or the notes thereto included in the Company SEC Documents as of the date hereof; (iv) which is a statutory, contractual or common law Lien to secure landlords, lessors or renters under leases or rental agreements; (v) which encumbers or is imposed on the underlying fee interest in real property subject to a real property lease; (vi) that arises as a result of a non-exclusive license or other non-exclusive grant of rights under Intellectual Property in the ordinary course of business consistent with past practice; (vii) that arises from pledges or deposits to secure obligations pursuant to workers’ compensation Laws, unemployment insurance, social security, retirement and similar Laws or similar legislation or to secure public or statutory obligations, in each case in the ordinary course of business consistent with past practice; (viii) for a matter (1) of record, defect, imperfection, irregularity in title, charge, encumbrance, easement, covenant, condition, restriction, easement, right of way, zoning, building, entitlement or other similar restriction or other Lien, (2) that would be shown by a current, accurate survey or a physical inspection of real property, in each case, that do not adversely affect in any material respect the current use or value of the applicable property owned, leased, used or held for use by the Company or any Company Subsidiary; and (ix) is a pledge or deposit to secure performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature that, in each case, is not material and is incurred in the ordinary course of business consistent with past practice.
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“Person” means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity or organization.
“Personal Data” means any and all information that can reasonably be associated with an individual natural person or household, including information that identifies or could be used to identify, alone or in combination with other information, an individual natural person or household, including name, physical address, telephone number, email address, financial account number, passwords or PINs, device identifier or unique identification number, government-issued identifier (including Social Security number and driver’s license number), medical, health or insurance information, gender, date of birth, educational or employment information, religious or political views or affiliations and marital or other status (to the extent any of these data elements can reasonably be associated with an individual natural person or household or is linked to any such data element that can reasonably be associated with an individual natural person or household). Personal Data also includes any information not listed above if such information is defined as “personal data,” “personally identifiable information,” “individually identifiable health information,” “protected health information” or “personal information” under any applicable Law and is regulated by such Law.
“Privacy Statements” means, collectively, all of the Company’s and the Company Subsidiaries’ (a) internal privacy policies and notices, and (b) publicly posted privacy policies and notices (including if posted on the Company’s or the Company Subsidiaries’ products and services), in each case regarding the collection, use, disclosure, transfer, storage, maintenance, retention, deletion, disposal, modification or processing of Protected Information.
“Proceedings” means all legal, civil, criminal, administrative, regulatory, arbitral, mediatory, enforcement, civil penalty, alternative dispute resolution, examination, debarment, seizure or other actions, suits, charges, complaints, subpoenas, prosecutions, assessments, claims, hearings, arbitrations, litigations, mediations, audits, inquiries, investigations, examinations or other similar proceedings, in each case, by or before any Governmental Entity.
“Protected Information” means (a) Personal Data, (b) any information that is governed, regulated or protected by one or more Information Privacy and Security Laws, (c) any information that is covered by the PCI DSS, (d) any proprietary or confidential information and (e) any information, the use or other processing of which is covered by Contract.
“Regulatory Laws” means any applicable supranational, national, federal, state, county, local or foreign antitrust, competition, trade regulation, or foreign investment Laws that are designed or intended to prohibit, restrict or regulate (a) actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including the HSR Act, the Sherman Act, the Clayton Act and the Federal Trade Commission Act, in each case, as amended, and other similar antitrust, competition or trade regulation laws of any jurisdiction other than the United States (collectively, “Antitrust Laws”) or (b) investments by entities that are deemed a foreign entity for purposes of any applicable law or regulation.
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“Representatives” means, when used with respect to any Person, the directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers and other agents, advisors and representatives of such Person and its Subsidiaries.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Software” means any and all (a) computer programs, including any and all software, firmware, and middleware, including all software implementations of algorithms, application programming interfaces (APIs), software development kits (SDKs), connectors, models, embeddings, vector databases and methodologies, whether in Source Code, object code or other form; (b) data, databases, datasets and other compilations or collections of data or information, whether machine readable or otherwise; (c) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and (d) all user documentation, including user manuals and training materials, relating to any of the foregoing.
“Source Code” means Software code, in form other than object code or machine readable form, including related programmer comments and annotations, help text, data and data structures, instructions and procedural, object-oriented and other code, which may be printed out or displayed in human readable form.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other organization, whether incorporated or unincorporated, of which (a) at least a majority of the outstanding shares of capital stock, or other equity interests, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation, limited liability company, partnership or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, or (b) with respect to a partnership, such Person or any other Subsidiary of such Person is a general partner or managing member of such partnership.
“Superior Proposal” means a bona fide, unsolicited written Acquisition Proposal (with references in the definition thereof to fifteen percent (15%) and eighty-five percent (85%) being deemed to be replaced with references to eighty percent (80%) and twenty percent (20%), respectively) that was made by a third party, which the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors to be more favorable to the Company Stockholders from a financial point of view than the Merger, taking into account all relevant factors (including all the terms and conditions of such proposal or offer (including the transaction consideration, conditionality, timing, certainty of financing and/or regulatory approvals and likelihood of consummation) and this Agreement (and, if applicable, any changes to the terms of this Agreement proposed by Parent pursuant to Section 5.2)).
“Takeover Statute” means any “business combination,” “control share acquisition,” “fair price,” “moratorium” or other takeover or anti-takeover statute or similar Law.
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“Tax” or “Taxes” means any and all U.S. federal, state, local and non-U.S. taxes of any kind imposed by any Governmental Entity, including income, franchise, windfall or other profits, gross receipts, property, sales, use, net worth, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, excise, withholding, ad valorem, stamp, transfer, value added, occupation, environmental, customs duty, disability, real property, personal property, registration, alternative or add on minimum, or estimated tax, including any interest, penalty, additions to tax and any additional amounts imposed with respect thereto, whether disputed or not.
“Tax Return” means any report, return, claim for refund, estimated Tax filing, information return or similar filing filed or required to be filed with any Governmental Entity with respect to Taxes, including any schedule or attachment thereto, and including any amendments or supplements thereof.
“Training Data” means any data, datasets or databases processed or otherwise used to develop, train, fine-tune, evaluate, validate, test or improve an AI System.
“Treasury Regulations” means the U.S. Treasury regulations promulgated under the Code.
Terms Defined Elsewhere. The following terms are defined elsewhere in this Agreement, as indicated below:
| 401(k) Termination Date | Section 6.7(c) |
| Acquisition Proposal | Section 8.2(b)(ii) |
| Adjusted RSU | Section 2.3(d) |
| Agreement | Preamble |
| Antitrust Laws | Definition of Regulatory Laws |
| Base Amount | Section 6.4(c) |
| BIS | Section 3.9(g) |
| Book-Entry Share | Section 2.1(a)(i) |
| Burdensome Condition | Section 6.2(a) |
| Cancelled Shares | Section 2.1(a)(ii) |
| Certificate | Section 2.1(a)(i) |
| Certificate of Merger | Section 1.4 |
| Change of Recommendation | Section 5.2(a) |
| Class A Common Stock | Section 2.1(a)(i) |
| Closing | Section 1.3 |
| Closing Date | Section 1.3 |
| Company | Preamble |
| Company Acquisition Agreement | Section 5.2(a) |
| Company Benefit Plan | Section 3.10(a) |
| Company Board of Directors | Recitals |
| Company Board Recommendation | Recitals |
| Company Capitalization Date | Section 3.2(a) |
| Company Disclosure Letter | Article III |
| Company Lease | Section 3.16(b) |
| Company Permits | Section 3.9(b) |
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| Company Preferred Stock | Section 3.2(a) |
| Company Registered Intellectual Property | Section 3.14(a) |
| Company SEC Documents | Section 3.5(a) |
| Company Stockholder Approval | Section 3.3(b) |
| Company Stockholders | Recitals |
| Company Stockholders Meeting | Section 5.3(b) |
| Company Support Parties | Recitals |
| Continuing Employees | Section 6.7(a) |
| Converted Shares | Section 2.1(a)(ii) |
| Current ESPP Offering Periods | Section 2.3(g) |
| DGCL | Recitals |
| Dissenting Shares | Section 2.1(b) |
| DOJ | Section 6.2(b) |
| Effective Time | Section 1.4 |
| Enforceability Limitations | Section 3.3(d) |
| FCPA | Definition of Anti-Corruption Law |
| Fraud | Section 8.2(a) |
| FTC | Section 6.2(b) |
| GAAP | Section 3.5(b) |
| HIPAA | Definition of Information Privacy and Security Laws |
| Indemnified Parties | Section 6.4(a) |
| Intervening Event | Section 5.2(d) |
| IP Contracts | Section 3.14(h) |
| Leased Real Property | Section 3.16(b) |
| Material Contract | Section 3.17(a) |
| Material Customer | Section 3.19(a) |
| Material Customer Agreement | Section 3.19(a) |
| Material Reseller | Section 3.19(c) |
| Material Reseller Agreement | Section 3.19(c) |
| Material Supplier | Section 3.19(b) |
| Material Supplier Agreement | Section 3.19(b) |
| Merger | Recitals |
| Merger Sub | Preamble |
| Minority Investment Entities | Section 3.2(f) |
| New Plans | Section 6.7(b) |
| NISPOM | Definition of National Security Laws |
| Notice Period | Section 8.2(b)(i) |
| OFAC | Section 3.9(e) |
| Old Plans | Section 6.7(b) |
| Outside Date | Section 8.1(d) |
| Parent | Preamble |
| Parent Disclosure Letter | Article IV |
| Parent Notice | Section 8.2(b)(i) |
| Parties. | Preamble |
| Party | Preamble |
| Paying Agent | Section 2.2(a) |
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| Payment Fund | Section 2.2(a) |
| Payoff Letter | Section 6.14 |
| Per Share Merger Consideration | Section 2.1(a)(i) |
| person | Section 5.2(a) |
| Proxy Statement | Section 5.3(a) |
| Qatalyst Partners | Section 3.22 |
| Regulatory Termination Fee | Section 8.2(b)(i) |
| Restricted Parties | Section 3.9(f) |
| Sarbanes-Oxley Act | Section 3.5(a) |
| Specified Indebtedness | Section 6.14 |
| Specified Indebtedness Termination | Section 6.14 |
| Surviving Corporation | Section 1.1 |
| Surviving Corporation Stock | Section 2.1(a)(ii) |
| Termination Fee | Section 8.2(b)(ii) |
| Transactions | Recitals |
| Voting Agreement | Recitals |
| WARN Act | Section 3.11(b) |
| willful breach | Section 8.2(a) |
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Annex B
Form of Voting and Support Agreement
B-1
Exhibit 99.1
VOTING AND SUPPORT AGREEMENT
This VOTING AND SUPPORT AGREEMENT is entered into as of October 19, 2026 (this “Agreement”), by and among Salesforce, Inc., a Delaware corporation (“Parent”), and each of the persons set forth on Schedule A hereto (each, a “Stockholder” and collectively, the “Stockholders”). Parent and the Stockholders are each sometimes referred to herein as a “Party” and collectively as the “Parties.”
W I T N E S S E T H:
WHEREAS, Parent, Braze, Inc., a Delaware corporation (the “Company”), and Banff Acquisition Sub Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“Merger Sub”), are entering into an Agreement and Plan of Merger dated as of the date hereof (as it may be amended or supplemented from time to time, the “Merger Agreement”), pursuant to which, among other things, at the Effective Time under the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company being the surviving corporation in the Merger (the “Surviving Corporation”) upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, as of the date hereof, each Stockholder is the record and beneficial owner of such number of shares of each class of capital stock of the Company as set forth opposite such Stockholder’s name on Schedule A hereto (the “Existing Shares”);
WHEREAS, the board of directors of the Company (the “Board”) has (i) unanimously adopted the Merger Agreement and approved the transactions contemplated thereby, including the Merger, and (ii) the Board has taken all action necessary to render inapplicable to the Merger Agreement and transactions contemplated thereby (including, for the avoidance of doubt, this Agreement) Section 203 of the DGCL and any similar provisions in the Company Governing Documents or any other Takeover Statute; and
WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement and incur the obligations set forth therein, and as an inducement and in consideration for Parent and Merger Sub to enter into the Merger Agreement, the Stockholders have agreed to enter into this Agreement concurrently with the execution and delivery of the Merger Agreement, pursuant to which, among other things, each Stockholder is agreeing, subject to the terms of this Agreement, to vote all of such Stockholder’s Shares in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:
Article I
GENERAL
1.1 Definitions. For the purposes of and under this Agreement, the following capitalized terms shall have the respective meanings below. Capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement.
(a) “beneficial ownership” by a Person of any securities includes ownership by any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power, which includes the power to vote, or to direct the voting of, such security, and/or (ii) investment power, which includes the power to dispose, or to direct the disposition, of such security, and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 under the Exchange Act and the rules and regulations of the SEC thereunder; provided that for purposes of determining beneficial ownership, a Person shall be deemed to be the beneficial owner of any securities that may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including the passage of time in excess of sixty (60) days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing). For purposes of this Agreement, a Person shall be deemed to beneficially own any securities beneficially owned by its Affiliates or any Group of which such Person or any such Affiliate is or becomes a member or is otherwise acting in concert. For the avoidance of doubt, beneficially own and beneficial ownership shall also include record ownership of securities. The terms “beneficially own,” “beneficially owned” and “beneficial owner” shall each have a correlative meaning.
(b) “Shares” means, with respect to each Stockholder, (1) such Stockholder’s Existing Shares and (2) any shares of Class A common stock, par value $0.0001 per share, of the Company (the “Class A Common Stock”) or other voting capital stock of the Company and any securities convertible into or exercisable or exchangeable for shares of Class A Common Stock or other voting capital stock of the Company, in each case that such Stockholder, directly or indirectly, has or acquires beneficial ownership of on or after the date hereof.
Article II
AGREEMENT TO VOTE
2.1 Agreement to Vote.
(a) Each Stockholder hereby irrevocably and unconditionally agrees that during the period beginning on the date hereof and ending on the Termination Date, it shall, at any meeting of the stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting, including the Company Stockholders Meeting), however called (the date of the taking of any such action being an applicable “Determination Date”), in each case to the fullest extent that such Stockholder’s Shares are entitled to vote thereon, appear at such meeting or otherwise cause such Stockholder’s Shares to be counted as present thereat for purposes of establishing a quorum; and
| (i) | vote, or cause to be voted at such meeting, in person or by proxy, all of such Stockholder’s Shares: |
| (A) | in favor of the approval and adoption of (1) the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and (2) any related proposal in furtherance thereof, including in favor of any proposal to adjourn or postpone to a later date any meeting of the stockholders of the Company at which any of the foregoing matters are submitted for consideration and vote of the stockholders of the Company if there are not sufficient votes for approval of such matters on the date on which the meeting is held; and |
| (B) | against (1) any Acquisition Proposal or any related action or proposal in furtherance thereof; (2) any action or agreement that is in opposition to the Merger or that would reasonably be expected to result in a breach of any covenant, representation or warranty of the Company or any of its Subsidiaries contained in the Merger Agreement, or of the Stockholder contained in this Agreement; and (3) any other action that would reasonably be expected to impede, interfere with, delay, postpone, frustrate the purposes of, or adversely affect the transactions contemplated by the Merger Agreement, including the Merger, or this Agreement or the performance by the Company of its obligations under the Merger Agreement. |
(b) The obligations of each Stockholder in this Section 2.1 shall apply whether or not the Merger or any action above is recommended by the Board (or any committee thereof).
(c) Any vote required to be cast pursuant to this Section 2.1 shall be cast or executed in accordance with the applicable procedures relating thereto so as to ensure that it is duly counted for purposes of recording the results of that vote. Any attempt by a Stockholder to vote, consent or express dissent with respect to (or otherwise to utilize the voting power of) such Stockholder’s Shares in contravention of this Section 2.1 shall be null and void ab initio. If a Stockholder is the beneficial owner, but not the holder of record, of any Shares, such Stockholder agrees to take all actions necessary to cause the holder of record and any nominees to vote all of such Shares in accordance with this Section 2.1. To the extent a Stockholder does not fully control the determinations of such stockholder entity, such Stockholder agrees to exercise all voting or other rights it has in such entity to carry out the intent and purposes of the support and voting obligations in this Section 2.1 or otherwise set forth in this Agreement. For the avoidance of doubt, the foregoing commitments apply to any Shares held by any trust, limited partnership or other entity holding Shares over which the applicable Stockholder exercises direct or indirect voting control.
(d) Nothing in this Agreement shall obligate any Stockholder to exercise any option or any other right to acquire any shares of Class A Common Stock.
Article III
ADDITIONAL AGREEMENTS
3.1 Waiver of Appraisal Rights and Certain Other Actions; Litigation. To the fullest extent permitted by Law, each Stockholder hereby irrevocably and unconditionally waives, and agrees not to exercise, any rights of appraisal (including under Section 262 of the DGCL), any dissenters’ rights and any similar rights relating to the Merger that such Stockholder may have, directly or indirectly, by virtue of the ownership of any Shares, or may acquire in connection with the Merger. Each Stockholder further agrees not to commence, join in, facilitate, assist or knowingly encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, Merger Sub or the Company or any of their respective affiliates and each of their successors, directors, managers or officers relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the transactions contemplated hereby or thereby, including any claim (a) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of this Agreement or the Merger Agreement (including any claim seeking to enjoy or delay the closing of the Merger) or (b) alleging a breach of any duty of the Board or any Stockholder in connection with this Agreement, the Merger Agreement or the transactions contemplated hereby or thereby, and hereby irrevocably waives any claim or rights whatsoever with respect to any of the foregoing.
3.2 No Inconsistent Arrangements; No Transfer.
(a) Each Stockholder represents, covenants and agrees that, except for this Agreement, such Stockholder (i) has not entered into, and shall not enter into at any time prior to the Termination Date, any voting agreement, voting trust or similar arrangement or understanding with respect to such Stockholder’s Shares, (ii) has not granted, and shall not grant at any time prior to the Termination Date, a proxy, consent or power of attorney with respect to such Stockholder’s Shares, (iii) has not taken, and shall not take at any time while this Agreement remains in effect, any action that would, or would reasonably be expected to, (A) make any representation or warranty of such Stockholder contained herein untrue or incorrect, (B) violate or conflict with such Stockholder’s covenants and obligations under this Agreement, (C) otherwise have the effect of preventing, impairing or materially delaying such Stockholder from performing any of its obligations under this Agreement or (D) have the effect of preventing, impairing or materially delaying the Merger or the other transactions contemplated by the Merger Agreement or the performance by the Company of its obligations under the Merger Agreement.
(b) Except as provided hereunder, from and after the date hereof and until the Termination Date, each Stockholder shall not, directly or indirectly: (i) create or permit to exist any Encumbrances, other than Permitted Encumbrances, on such Stockholder’s Shares; (ii) transfer, sell, short sell, assign, tender, exchange, encumber, gift, hedge, distribute, pledge or otherwise dispose of (by merger, by testamentary disposition, by operation of Law or otherwise), or grant a proxy with respect to, such Stockholder’s Shares, beneficial ownership thereof or any other interest therein, or enter into any derivative arrangement (collectively, “Transfer”) with respect to such Stockholder’s Shares, or any right or interest therein (or offer to do or consent to any of the foregoing); (iii) enter into or acquire any Contract with respect to such Stockholder’s Shares or any legal or beneficial interest therein, including any
derivative contract, any futures or forward contract to deliver such Stockholder’s Shares or any other hedging or other derivative, swap, “put-call,” margin, securities lending or other transaction that has or reasonably would be expected to have the effect of changing, limiting, arbitraging or reallocating the economic benefits and risks of ownership of such Stockholder’s Shares; (iv) grant or permit the grant of any proxy, power-of-attorney or other authorization or consent in or with respect to such Stockholder’s Shares; or (v) deposit or permit the deposit of such Stockholder’s Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Stockholder’s Shares. Any action taken in violation of the immediately preceding sentence shall be null and void ab initio. Notwithstanding the foregoing, each Stockholder may Transfer such Stockholder’s Shares (A) in connection with the payment of the exercise price and/or the satisfaction of any tax withholding obligations arising from the exercise, vesting and/or settlement of any Company Option, Company RSU or Company PSU, (B) pursuant to a Rule 10b5-1 trading plan in effect as of the date hereof, or (C) if such Stockholder is the Chief Executive Officer of the Company as of the date hereof, (1) in sales or transfers of up to 210,530 Shares in the aggregate and (2) in transfers of up to 210,530 Shares in the aggregate to a charitable remainder trust (any such Transfer or any Transfer with Parent’s prior written consent, a “Permitted Transfer”), provided that any Transfer of Shares pursuant to clauses (A), (B) and (C), in the aggregate (taking into account all Transfers of Shares pursuant to this clause by any Stockholder from and after the date of this Agreement), will not, and would not reasonably be expected to, exceed one and one-half percent (1.5%) of the total voting power of the outstanding shares of Class A Common Stock as of immediately prior to the applicable Determination Date. If any involuntary Transfer of such Stockholder’s Shares in the Company shall occur (including, but not limited to, a sale by any Stockholder’s trustee in any bankruptcy, or a sale to a purchaser at any creditor’s or court sale), the transferee (including any transferees and subsequent transferees of the initial transferee) shall take and hold such Shares subject to all of the terms of this Agreement applicable to the initial Stockholder of such Shares.
3.3 Adjustments. In the event of any stock split (including a reverse stock split), stock dividend, merger, reorganization, recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of the Company affecting such Stockholder’s Shares, the terms of this Agreement shall apply to the resulting securities.
3.4 No Shop Obligations of the Stockholders.
(a) Subject to Section 5.14 and from the date hereof until the Termination Date, each Stockholder shall not, and shall cause its affiliates and its and their respective Representatives not to, directly or indirectly, (i) solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer which constitutes or would reasonably be expected to lead to an Acquisition Proposal, (ii) participate in any negotiations regarding, or furnish to any person any information relating to, the Company or any Company Subsidiary in connection with an actual or potential Acquisition Proposal, (iii) otherwise cooperate with or assist or participate in, or facilitate, any such inquiries, proposals, offers, discussions or negotiations, (iv) encourage or recommend any other holder of Class A Common Stock to not adopt the Merger Agreement or approve the transactions contemplated by the Merger Agreement, including the Merger, (v) support, recommend, endorse, authorize or approve, or propose to support, recommend, endorse, authorize or approve, any Acquisition Proposal or enter into any
Company Acquisition Agreement or (vi) resolve or agree to do any of the foregoing. Each Stockholder shall, and shall cause its affiliates and its and their respective Representatives to, immediately cease any and all solicitation, encouragement, discussion or negotiation with any Person or groups or provision of any information to any persons (other than Parent, its Subsidiaries, and their respective Representatives acting on their behalf) with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal. Notwithstanding the foregoing, each Stockholder, its affiliates and its and their respective Representatives may engage in such activities to the extent that the Company is permitted to engage in such activities pursuant to the terms of the Merger Agreement, but only if such Stockholder and its affiliates and its and their respective Representatives each comply with the terms of the Merger Agreement as if it were the Company.
(b) From and after the date hereof until the Effective Time, each Stockholder shall promptly (and in any event within twenty-four (24) hours) (i) notify Parent of (A) any Acquisition Proposal it receives in its capacity as a stockholder of the Company, (B) any proposals or inquiries it receives in its capacity as a stockholder of the Company that would reasonably be expected to lead to an Acquisition Proposal and (C) any inquiry or request it receives in its capacity as a stockholder of the Company for information relating to the Company or any Company Subsidiary by any person who has made or would reasonably be expected to make any Acquisition Proposal, (ii) if such Acquisition Proposal, request or inquiry is in writing, deliver to Parent a copy of such Acquisition Proposal, request or inquiry and any related draft agreements and other written materials setting forth the terms and conditions of such Acquisition Proposal, request or inquiry, and (iii) if such Acquisition Proposal, request or inquiry is oral, provide to Parent a reasonably detailed summary thereof. Such notice shall indicate the identity of the Person making such Acquisition Proposal, inquiry, proposal or request. Without limiting any Stockholder’s other obligations hereunder, each Stockholder shall keep Parent reasonably informed on a prompt and timely basis of the status and material details of any such Acquisition Proposal and with respect to any material change to the terms of any such Acquisition Proposal within twenty-four (24) hours of any such material change.
Article IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Stockholder. Each Stockholder hereby represents and warrants to Parent, as to such Stockholder with respect to his, her or its own account and with respect to its Shares, on a several basis, that:
(a) Authorization; Binding Agreement. If such Stockholder is not an individual, such Stockholder is duly organized and validly existing in good standing (where such concept is recognized) under the Laws of the jurisdiction in which it is incorporated or constituted and the consummation of the transactions contemplated hereby are within such Stockholder’s entity powers and have been duly authorized by all necessary entity actions on the part of such Stockholder, and such Stockholder has all requisite entity power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. If such Stockholder is an individual, such Stockholder has all requisite legal capacity, right and authority to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder. This Agreement has been duly and validly executed and delivered by such Stockholder and,
assuming the due authorization, execution and delivery by Parent constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to the Enforceability Limitations. If such Stockholder is an individual and is married, and such Stockholder’s Shares constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse and, assuming the due authorization, execution and delivery by Parent, constitutes a legal, valid and binding obligation of such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, subject to the Enforceability Limitations.
(b) Non-Contravention. Neither the execution and delivery of this Agreement by such Stockholder (and if applicable, such Stockholder’s spouse) nor the consummation of the transactions contemplated hereby nor compliance by such Stockholder (and if applicable, such Stockholder’s spouse) with any provisions herein will (a) violate, contravene or conflict with or result in any breach of any provision of the certificate of incorporation or bylaws (or other similar governing documents) of such Stockholder, (b) require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity on the part of such Stockholder (and if applicable, such Stockholder’s spouse), except for compliance with the applicable requirements of the Securities Act, the Exchange Act or any other United States or federal securities laws and the rules and regulations promulgated thereunder, (c) violate, conflict with, or result in a breach of any provisions of, or require any consent, waiver or approval or result in a default or loss of a benefit (or give rise to any right of termination, cancellation, modification or acceleration or any event that, with the giving of notice, the passage of time or otherwise, would constitute a default or give rise to any such right) under any of the terms, conditions or provisions of any Contract to which such Stockholder (and if applicable, such Stockholder’s spouse) is a party or by which such Stockholder (and if applicable, such Stockholder’s spouse) or such Stockholder’s Shares may be bound, (d) result (or, with the giving of notice, the passage of time or otherwise, would result) in the creation or imposition of any Lien (other than Permitted Liens) on any asset of such Stockholder (and if applicable, such Stockholder’s spouse) (other than one created by Parent or Merger Sub) or (e) violate any Law applicable to such Stockholder (and if applicable, such Stockholder’s spouse) or by which such Stockholder’s Shares are bound, except, in the case of each of clauses (c), (d) and (e), as would not reasonably be expected to prevent or materially delay or impair the consummation by such Stockholder of the transactions contemplated by this Agreement or otherwise materially impair such Stockholder’s ability to perform its obligations hereunder.
(c) Ownership of Shares; Total Shares. Such Stockholder is the record and beneficial owner of all of the Existing Shares and has good and marketable title to all of the Existing Shares free and clear of any Liens, claims, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances or restrictions whatsoever on title, transfer or exercise of any rights of a stockholder in respect of such Existing Shares (collectively, “Encumbrances”), except for any such Encumbrance that may be imposed pursuant to (i) this Agreement, (ii) any applicable restrictions on transfer under the Securities Act or any state securities law, (iii) the Company Governing Documents, and (iv) any applicable Company Equity Plan or agreements evidencing grants thereunder ((i) through (iv), collectively, “Permitted Encumbrances”).
(d) The Existing Shares listed on Schedule A opposite such Stockholder’s name constitute all of the shares of Class A Common Stock, Company Options, Company RSUs and Company PSUs, and any other securities of the Company beneficially owned by such Stockholder as of the date hereof.
(e) Voting Power. Such Stockholder has full voting power with respect to all of such Stockholder’s Shares (to the extent such Shares have voting rights), and full power of disposition with respect to such Shares to the extent they consist of vested shares of Class A Common Stock, full power to issue instructions with respect to the matters set forth herein and full power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Stockholder’s Shares.
(f) Absence of Other Voting Agreements. (i) None of such Stockholder’s Shares is or will be subject to any voting trust, proxy or other agreement, arrangement or restriction with respect to the voting of such Shares, in each case, that is inconsistent with this Agreement and (ii) none of such Stockholder’s Shares is subject to any pledge agreement pursuant to which such Stockholder does not retain sole and exclusive voting rights with respect to such Shares subject to such pledge agreement at least until the occurrence of an event of default under the related debt instrument.
(g) Absence of Litigation. With respect to such Stockholder, as of the date hereof, there is no Proceeding pending against (i) such Stockholder, or, to the knowledge of such Stockholder, threatened against such Stockholder or its affiliates or (ii) any of such Stockholder’s properties or assets (including any of such Stockholder’s Shares), in each case, that would reasonably be expected to restrict, prevent, materially delay or impair the performance by such Stockholder of its obligations under this Agreement.
(h) Reliance by Parent and Merger Sub. Such Stockholder understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties of such Stockholder contained herein. Such Stockholder understands and acknowledges that the Merger Agreement governs the terms of the Merger and the other transactions contemplated thereby.
4.2 Representations and Warranties of Parent. Parent hereby represents and warrants to each Stockholder as follows:
(a) Organization and Qualification. Parent is a duly organized and validly existing corporation in good standing under the Laws of the jurisdiction of its organization. All of the issued and outstanding capital stock of Merger Sub is owned directly or indirectly by Parent.
(b) Authority for this Agreement. Parent has all requisite entity power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent have been duly and validly authorized by all necessary entity action on the part of Parent, and no other entity proceedings on the part of Parent are necessary to authorize this Agreement. This Agreement has been duly and validly executed and delivered by Parent and, assuming the due
authorization, execution and delivery by each Stockholder, constitutes a legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to the Enforceability Limitations.
Article V
MISCELLANEOUS
5.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), by electronic mail (notice deemed given upon transmission so long as there is no return error message or other notification of non-delivery received by the sender; provided that electronic mail received after 6:00 p.m., Pacific Time, shall be deemed received on the next day) or sent by a nationally recognized overnight courier service or express delivery service (notice deemed given upon receipt of proof of delivery), to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
if to Parent or Merger
Sub, to:
Salesforce, Inc.
415 Mission Street, 3rd Fl
San Francisco, California 94105
Email: [***]
Attention: Chief Legal Officer
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
| Email: | ajnussbaum@wlrk.com |
| mlu@wlrk.com |
| Attention: | Andrew J. Nussbaum |
| Meng Lu |
if to a Stockholder, to such Stockholder’s address or email address set forth below:
William Magnuson
[****]
[****]
Email: [****]
Attention: William Magnuson
Scintillating Holdings LLC
[****]
[****]
Email: [****]
Attention: William Magnuson
Jonathan Hyman
[****]
[****]
Email: [****]
Attention: Jonathan Hyman
Hyman 2026 Charitable Remainder Trust
[****]
[****]
Email: [****]
Attention: Jonathan Hyman
Hyman 2021 GST Descendants Trust
[****]
[****]
Email: [****]
Attention: Kate Hyman
Hyman 2021 GST Family Trust
[****]
[****]
Email: [****]
Attention: Lauren Meyer
Neeraj Agrawal
c/o Battery Ventures One
[****]
[****]
Email: [****]
Attention: Neeraj Agrawal
with a copy to:
Davis Polk & Wardwell LLP
900 Middlefield Road
Redwood City, California 94063
| Email: | paul.scrivano@davispolk.com |
| cheryl.chan@davispolk.com |
| Attention: | Paul S. Scrivano |
| Cheryl Chan |
5.2 Termination. This Agreement shall terminate automatically with respect to a Stockholder and Parent, without any notice or other action by any Person, upon the earliest to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the Effective Time, (c) the entry without the prior written consent of such Stockholder into any amendment, waiver or modification to the Merger Agreement that results in a decrease in the Merger Consideration or changes the mix of Merger Consideration or (d) the delivery of written notice by Parent to such Stockholder of termination of this Agreement, and upon the occurrence of the earliest of such events this Agreement shall terminate and be of no further force (the date of termination, the “Termination Date”). Upon termination of this Agreement with respect to a Stockholder and Parent, neither such Stockholder nor Parent shall have any further obligations or liabilities under this Agreement; provided, however, that (i) nothing set forth in this Section 5.2 shall relieve any Party from liability for any breach of this Agreement prior to termination hereof or relieve or otherwise limit the liability of any Party for Fraud or any willful breach (as defined in the Merger Agreement) of this Agreement prior to termination hereof, and (ii) the provisions of this Article V shall survive any termination of this Agreement.
5.3 Amendments and Waivers.
(a) Subject to applicable Law and except as otherwise provided in this Agreement, this Agreement may be amended, modified and supplemented by written agreement of each of the Parties.
(b) At any time and from time to time prior to the Effective Time, each Party may, to the extent legally allowed and except as otherwise set forth herein, (i) extend the time for the performance of any of the obligations or other acts of the other Party, as applicable, (ii) waive any inaccuracies in the representations and warranties made by the other Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for their respective benefit contained herein. Any agreement on the part of Parent or any Stockholder to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of Parent or such Stockholder, as applicable. No failure or delay by Parent or a Stockholder in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.
5.4 Entire Agreement; Third-Party Beneficiaries. This Agreement and the other documents and certificates delivered pursuant hereto constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties any rights or remedies hereunder or thereunder.
5.5 Enforcement; Remedies. The Parties agree that irreparable damage would occur and that the Parent and Merger Sub would not have any adequate remedy at law in the event that any Stockholder did not perform any of the provisions of this Agreement in accordance with their specific terms or otherwise breached any such provisions. It is accordingly agreed that Parent and Merger Sub shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in addition to any other remedy to which they are entitled at law or in equity. Any and all remedies herein expressly conferred upon Parent and Merger Sub will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by Law or equity upon Parent or Merger Sub, and the exercise by Parent or Merger Sub of any one remedy will not preclude the exercise of any other remedy.
5.6 Governing Law; Jurisdiction.
(a) This Agreement and any disputes relating to or arising out of this Agreement and the transactions contemplated hereby (whether based in contract, tort or otherwise) shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the Law of any other state.
(b) Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement and the rights and obligations hereunder or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding, except in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (iii) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts; and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each Party to this Agreement irrevocably consents to service of process inside or outside the territorial jurisdiction of the courts referred to in this Section 5.6(b) in the manner provided for notices in Section 5.1. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law.
5.7 Waiver of Jury Trial.
(a) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVERS, (B) IT
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.7.
5.8 Assignment. This Agreement shall not be assigned by any Party (including by operation of law, by merger or otherwise) without the prior written consent of (a) Parent, in the case of an assignment by a Stockholder and (b) each Stockholder, in the case of an assignment by Parent; provided that Parent may assign any of its respective rights and obligations to any direct or indirect Subsidiary of Parent, but no such assignment shall relieve Parent of its obligations hereunder. Subject to the preceding sentence, but without relieving any Party of any obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
5.9 Descriptive Headings. The table of contents and headings set forth in this Agreement or any schedule delivered pursuant to this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or such schedule or any term or provision hereof or thereof.
5.10 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner.
5.11 Counterparts. This Agreement may be executed manually or by other electronic transmission by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Parties. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .pdf or DocuSign format shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
5.12 Interpretation. When a reference is made in this Agreement to sections, such reference shall be to a section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “affiliates” shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The word “extent” and the phrase “to the extent” when used in this Agreement shall mean the degree to which a subject or other things extends, and such word or phrase shall not merely mean “if.” The term “or” is not exclusive, and shall be interpreted as “and/or.” The phrases “the date of this Agreement,” “the date hereof,” “of even date herewith” and terms of similar import, shall be deemed to refer to the date set forth in the preamble to this Agreement. All references herein to a Subsidiary of a Party shall be deemed to include all direct and indirect Subsidiaries of such Party, unless otherwise indicated or the context otherwise requires. A reference to any specific Law or to any provision of any Law, whether or not followed by the phrase “as amended,” includes any amendment to, and any modification, re-enactment or successor thereof, any legislative provision substituted therefor and
all rules, regulations and statutory instruments issued thereunder or pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as a specific date, references to any specific Law will be deemed to refer to such legislation or provision (and all rules, regulations and statutory instruments issued thereunder or pursuant thereto) as of such date. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.
5.13 Publicity; Documentation and Information. Each Stockholder agrees that it shall not make any public announcement regarding this Agreement or the transactions contemplated hereby without the prior written consent of Parent, except as may be required by applicable Law (provided that reasonable notice of any such disclosure will be provided to Parent, and such Stockholder will consider in good faith the reasonable comments of Parent with respect to such disclosure and otherwise cooperate with Parent in obtaining confidential treatment with respect to such disclosure). Each Stockholder consents to and hereby authorizes Parent, Merger Sub and the Company to publish and disclose in all documents and schedules filed with the SEC or any other Governmental Entity or applicable securities exchange, and any press release or other disclosure document that Parent or Merger Sub reasonably determines to be necessary or advisable in connection with the Merger or any other transactions contemplated by the Merger Agreement or this Agreement, including, without limitation, any definitive proxy statement (and any amendments or supplements thereto), such Stockholder’s identity and ownership of such Stockholder’s Shares, the existence of this Agreement and the nature of such Stockholder’s commitments and obligations under this Agreement, and each Stockholder acknowledges that Parent, Merger Sub or the Company may, in Parent’s or the Company’s sole discretion, as applicable, file this Agreement or a form hereof with the SEC or any other Governmental Entity or securities exchange.
5.14 Capacity as Stockholder. Each Stockholder signs this Agreement in such Stockholder’s capacity as a stockholder of the Company, and not, if applicable, in such Stockholder’s capacity as a director, officer or employee of the Company. Notwithstanding anything herein to the contrary, nothing in this Agreement shall in any way restrict a director or officer of the Company in the taking of any actions (or the failure to take any actions) in his or her capacity as a director or officer of the Company, or in the exercise of his or her fiduciary duties in his or her capacity as a director or officer of the Company, or prevent, or be construed to create any obligation on the part of, any director or officer of the Company from taking any action in his or her capacity as such director or officer.
5.15 Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such costs or expenses.
5.16 Further Assurances. Each Stockholder will execute and deliver, or cause to be executed and delivered, all further documents and instruments and use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Law, to perform its obligations under this Agreement.
5.17 Stockholder Obligation Several and Not Joint. The obligations of each Stockholder hereunder shall be several and not joint, and no Stockholder shall be liable for any breach of the terms of this Agreement by any other Stockholder.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have executed or caused this Agreement to be executed in counterparts, all as of the day and year first above written.
| SALESFORCE, INC. | |||
| By: | /s/ John Somorjai | ||
| Name: | John Somorjai | ||
| Title: | President, Corporate Development and Investments | ||
[Signature Page to Voting and Support Agreement]
| STOCKHOLDER: | ||
| By: | /s/ William Magnuson | |
| Name: | William Magnuson | |
[Signature Page to Voting and Support Agreement]
| SCINTILLATING HOLDINGS LLC: | ||
| By: | /s/ William Magnuson | |
| Name: | William Magnuson | |
| Title: | Member | |
[Signature Page to Voting and Support Agreement]
| STOCKHOLDER: | ||
| By: | /s/ Jonathan Hyman | |
| Name: | Jonathan Hyman | |
[Signature Page to Voting and Support Agreement]
| HYMAN 2026 CHARITABLE REMAINDER TRUST: | ||
| By: | /s/ Jonathan Hyman | |
| Name: | Jonathan Hyman | |
| Title: | Trustee | |
[Signature Page to Voting and Support Agreement]
| HYMAN 2021 GST DESCENDANTS TRUST: | ||
| By: | /s/ Kate Hyman | |
| Name: | Kate Hyman | |
| Title: | Trustee | |
[Signature Page to Voting and Support Agreement]
| JONATHAN HYMAN 2021 GST FAMILY TRUST: | ||
| By: | /s/ Lauren Meyer | |
| Name: | Lauren Meyer | |
| Title: | Trustee | |
[Signature Page to Voting and Support Agreement]
| STOCKHOLDER: | ||
| By: | /s/ Neeraj Agrawal | |
| Name: | Neeraj Agrawal | |
[Signature Page to Voting and Support Agreement]
SCHEDULE
A
EXISTING SHARES
|
Name
of |
Number of Shares of Class A Common Stock |
Company |
Company |
Company | ||||
| William Magnuson | 4,258,551 | 1,251,658 | 585,809 | 125,944 | ||||
| Scintillating Holdings LLC | 470 | |||||||
| Jonathan Hyman | 946,035 | 325,213 | 187,184 | 38,412 | ||||
| Hyman 2026 Charitable Remainder Trust | 350,000 | |||||||
| Hyman 2021 GST Descendants Trust | 221,436 | |||||||
| Hyman 2021 GST Family Trust | 28,564 | |||||||
| Neeraj Agrawal | 194,769 | 7,753 |
A-1
Exhibit 99.2
Salesforce Signs Definitive Agreement to Acquire Braze
SAN FRANCISCO & NEW YORK (OCTOBER 20, 2026) — Salesforce (NYSE: CRM), the world’s #1 AI CRM, today announced it has entered into a definitive agreement to acquire Braze (NASDAQ: BRZE), a leading customer engagement platform, for approximately $5.66 billion in enterprise value. Under the terms of the agreement, holders of Braze Class A common stock will receive $47.50 in cash per share.
Braze helps marketers build deeper customer relationships by responding to customer behavior in real time, coordinating personalized experiences across mobile apps, websites, email, SMS, WhatsApp, and more. Its cloud-native, event-streaming architecture is optimized for high-volume, real-time B2C engagement, continuously updating customer profiles and adapting customer journeys while powering trillions of messages and journey actions each year. BrazeAI extends these capabilities with AI-powered optimization across content, offers, channels, and timing, helping marketers make each interaction more relevant.
“Every interaction is an opportunity to wow your customers,” said Patrick Stokes, President, Applications and Marketing, Salesforce. “Most of that wow comes from knowing your customer, and responding at just the right moment. Braze was built to turn live customer behavior into personalized engagement at scale. Bringing that capability together with Salesforce Marketing Cloud, CRM, and Data 360 will deliver that wow moment in every customer interaction.”
“Braze was built on the conviction that marketers and their creativity are a brand’s ultimate competitive advantage,” said Bill Magnuson, CEO and Co-Founder of Braze. “This past year we shipped at the fastest pace in our history, and BrazeAI is helping marketers get their best ideas live faster. Salesforce shares our commitment to marketers, and we’ll continue building as Braze and investing in the Braze community of customers and partners who built this company with us. Salesforce’s platform will help us innovate faster and together we’ll help marketers around the world build deeper, more lasting relationships with their customers.”
AI is raising the bar for marketers, who now need agentic solutions that can understand customers, make decisions, and act in real time. Salesforce is moving to lead that shift, through both organic innovation and acquisitions that meet the standards of our M&A framework: advancing customer success, fitting within our strategy, accelerating innovation, and creating long-term value.
Following the close of the transaction, Braze’s real-time engagement and AI decisioning capabilities are expected to complement all four layers of Salesforce’s architecture — Data 360, Customer 360, Agentforce, and SIForce. Within Customer 360, Braze is expected to strengthen Marketing Cloud’s cross-channel personalization, helping brands turn a deeper view of each customer into richer experiences, optimized in real time at the scale needed to reach hundreds of millions of people.
These capabilities would advance Salesforce’s vision for a more complete Customer 360 and expand how brands connect with customers across high-volume B2C experiences. Salesforce and Braze also share a commitment to an open, composable approach that gives customers flexibility across the data, tools, and partners they rely on.
Together, Salesforce and Braze would help businesses:
| ● | Act on customer behavior in real time. Braze’s event-streaming architecture turns live customer signals and data from cloud data warehouses and other platforms into personalized messages and coordinated journeys, helping marketers adapt engagement as customers browse, buy, and use products. |
| ● | Deliver richer experiences across channels. Braze’s deep mobile and app capabilities, including in-app messages, personalized content feeds, and live updates, work alongside email, web, and messaging channels to create more connected customer experiences. |
| ● | Make personalization more intelligent. Braze’s AI decisioning helps marketers optimize content, offers, channels, and timing. Bringing these capabilities together with Salesforce’s customer context and Agentforce would help businesses make engagement more relevant and connect marketing with the broader customer relationship across commerce, sales, and service. |
Braze serves approximately 2,770 customers, including Canva, Dairy Queen, Equinox, Instacart, Urban Outfitters, and Venmo. Led by co-founders Bill Magnuson and Jon Hyman, Braze would also bring deep expertise in mobile experiences, data engineering, and customer engagement to Salesforce Marketing Cloud.
Transaction Details
The transaction is expected to close in Salesforce’s fiscal year 2028, subject to customary closing conditions, including approval by Braze’s shareholders and receipt of required regulatory approvals. There is no anticipated change to Salesforce's FY27 guidance. Salesforce has not guided FY28 and there is no update to long-term targets at this time.
Advisors
J.P. Morgan Securities LLC is serving as exclusive financial advisor to Salesforce, and Wachtell, Lipton, Rosen & Katz and Covington & Burling LLP are serving as legal counsel to Salesforce.
Qatalyst Partners is serving as exclusive financial advisor to Braze, and Davis Polk & Wardwell LLP is serving as legal counsel to Braze.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to the proposed acquisition of Braze by Salesforce. Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” “will”, “commitments,” variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon Salesforce’s and Braze’s current plans, assumptions, beliefs, and expectations. Forward-looking statements are subject to the occurrence of many events outside of Salesforce’s and Braze’s control. Actual results and the timing of events may differ materially from those contemplated by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties.
These risks and uncertainties include, among other things, statements regarding the expected benefits to Salesforce, Braze and their respective customers from completing the transaction, plans for future investment and capital allocation, the expected financial performance of Salesforce following the expected completion of the transaction, and the expected completion of the transaction. Statements regarding future events are based on the parties’ current expectations, estimates and projections and are necessarily subject to associated risks related to, among other things, (i) the completion of the proposed transaction on the anticipated terms and timing, or at all, including the parties’ ability to obtain regulatory approvals and the requisite vote by Braze shareholders and satisfy other conditions to the completion of the transaction, (ii) the effect of the announcement or pendency of the proposed transaction on Braze’s business, operating results, ability to retain and hire key personnel, and relationships with customers, suppliers, competitors and others, (iii) risks that the proposed transaction may disrupt Braze’s current plans and business operations or divert management’s attention from ongoing business operations, (iv) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, (v) the risk that the merger agreement may be terminated in circumstances requiring Salesforce or Braze to pay a termination fee, (vi) the risk and outcome of any legal or regulatory proceedings related to the transaction, (vii) the potential effects on the accounting of the proposed transaction, (viii) legislative, regulatory and economic developments, (ix) general economic conditions, (x) restrictions during the pendency of the proposed transaction that may impact Braze’s ability to pursue certain business opportunities or strategic transactions, (xi) the retention of key personnel, (xii) the ability of Salesforce to successfully integrate Braze’s market opportunities, technology, personnel and operations and to achieve expected benefits, including the possibility that the expected benefits from the transaction will not be realized or will not be realized within the expected time period, (xiii) the possibility that competing offers may be made, (xiv) negative effects of the announcement or the consummation of the proposed acquisition on the market price of Salesforce’s common stock and/or operating results, (xv) significant transaction costs and expenses, and (xvi) unknown liabilities.
For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Salesforce’s and Braze’s respective periodic reports and other filings with the Securities and Exchange Commission (the “SEC”), including the risk factors identified in Salesforce’s and Braze’s most recent Annual Reports on Form 10-K, available at www.sec.gov. The forward-looking statements included in this press release are made only as of the date hereof. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. Neither Salesforce nor Braze undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Additional Information and Where to Find It
This press release is being made in respect of a proposed transaction involving Salesforce and Braze. In connection with the proposed transaction, Braze intends to file relevant materials with the SEC, including a preliminary proxy statement on Schedule 14A. The information in the preliminary proxy statement will not be complete and may be changed. Braze will deliver the definitive proxy statement to its shareholders as required by applicable law. This press release does not constitute a solicitation of any vote or approval and is not a substitute for any proxy statement or any other document that may be filed with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF BRAZE ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS THERETO, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by Braze (when they become available) may also be obtained free of charge from Braze’s investor relations website at investors.Braze.com.
Participants in the Solicitation
Braze and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Braze’s directors and executive officers is available in Braze’s proxy statement for the 2026 annual meeting of stockholders, which was filed with the SEC on May 18, 2026 (the “2026 Annual Meeting Proxy Statement”, which is available at sec.gov/Archives/edgar/data/1676238/000114036126021908/ny20068382x2_def14a.htm#tIRD), and in other documents filed by Braze with the SEC. Please refer to the sections captioned “Information Regarding Director Nominees and Current Directors,” “Information Regarding the Board of Directors and Corporate Governance,” “Executive Officers,” “Compensation Discussion and Analysis,” “Pay Versus Performance,” “Non-Employee Director Compensation” and “Security Ownership of Certain Beneficial Owners and Management” in the 2026 Annual Meeting Proxy Statement. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement relating to the proposed transaction and other relevant materials to be filed with the SEC in connection with the proposed transaction when they become available. Free copies of the proxy statement relating to the proposed transaction and such other materials may be obtained as described in the preceding paragraph.
No Offer or Solicitation
This press release is for informational purposes only and is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Salesforce
Salesforce helps organizations of any size become agentic enterprises - integrating humans, agents, apps, and data on a trusted, unified platform to unlock unprecedented growth and innovation. Visit www.salesforce.com for more information.
About Braze
Braze is the leading customer engagement platform that empowers brands to Be Absolutely Engaging™. Braze helps brands deliver great customer experiences that drive value both for consumers and for their businesses. Built on a foundation of composable intelligence, BrazeAI™ allows marketers to combine and activate AI agents, models, and features at every touchpoint throughout the Braze Customer Engagement Platform for smarter, faster, and more meaningful customer engagement. From cross-channel messaging and journey orchestration to AI-powered decisioning and optimization, Braze enables companies to turn action into interaction through autonomous, 1:1 personalized experiences. The company has been consistently recognized as a Leader in marketing technology by industry analysts and was named a G2 “Best of Marketing and Digital Advertising Software Product” in 2026. Braze was also named one of Built In’s 2026 Best Places to Work, one of America’s Greenest Companies for 2025 by Newsweek, and a 2025 Fortune Best Workplace in Technology™ by Great Place To Work®. The company is headquartered in New York with 15 offices across the Americas, EMEA, and APAC. Learn more at Braze.com.
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