Confidentiality; Non-Compete; Non-Solicitation. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Shares purchased by Buyer (including, without limitation, the goodwill inherent in each of the Group Companies as of the Closing Date), upon the Closing of the transactions contemplated by this Agreement, the Selling Shareholders hereby agree as follows: (a) As an owner of the Shares, and/or an employee of the Company or a Company Subsidiary, each Selling Shareholder has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the Group Companies. Each Selling Shareholder agrees that unless such Selling Shareholder first secures the written consent of an authorized representative of the Buyer, such Selling Shareholder shall not use for his or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary for him to carry out his duties or except to the extent such use or disclosure is required by law or order of any governmental authority (in which event such Selling Shareholder shall, to the extent practicable, inform the Company and the Buyer in advance of any such required disclosure, shall cooperate with the Company and Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Selling Shareholder shall use reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. (b) Each Selling Shareholder further agrees that, at any time requested, such Selling Shareholder shall promptly deliver to the Company and Buyer all Confidential Information and other Intellectual Property of the Group Companies in such Selling Shareholder’s possession and control and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and magnetic media, and all other materials containing or embodying any such Intellectual Property. If the Company or Buyer requests, the Selling Shareholder shall promptly provide written confirmation that such Selling Shareholder has returned all such materials. (c) Each Selling Shareholder agrees that each Group Company have received from third parties their confidential or proprietary information subject to a duty on each Group Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Selling Shareholder agrees that he/she it owes each Group Company and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Selling Shareholder future work for any Group Company consistent with the Group Company’s agreement with such third party) or to use it for the benefit of anyone other than for any Group Company or such third party (consistent with the Group Company’s agreement with such third party) without the express authorization of the Company or the Company Subsidiaries. (d) Each of the Major Stockholders, Key Employee Stockholders, Senior Key Employee Stockholders, and Management Key Employee Stockholders , such parties as listed on Schedule 4.3(d) (including any Affiliates thereof, even if not listed) (collectively, the “Key Stockholders”), acknowledges that he/she or it shall become familiar with Confidential Information concerning the Group Companies and that his/her or its services or relationship with the Group Companies have been and shall be of special, unique and extraordinary value to the Group Companies. For each Key Stockholder, for the applicable period from the Closing Date as listed on Schedule 4.3(d) for such Key Stockholder (the “Non-Compete Period”), such Key Stockholder shall not, and shall not authorize any of its respective Affiliates to, directly or indirectly (whether as an owner, partner, operator, manager, employee, officer, director, consultant, advisor, representative, agent or independent contractor of any Person or otherwise), to (i) engage in any business or accept employment with any Company Competitor (as defined below); or (ii) provide any Competitive Services or Competitive Products (each as defined below) whether directly or indirectly and whether on his own or on behalf of any Company Competitor (as defined below) to any third party; provided that the foregoing restriction shall not apply to ownership of less than 3% of the outstanding stock of any publicly-traded corporation. “Company Competitor” shall mean any company whose principal business, or any business unit, division or subsidiary of a company whose principal business, is a business which competes with the Business as it is conducted by a Group Company on the Closing Date. Each Key Stockholder agrees that this covenant is reasonable with respect to its duration, geographical area and scope.
Appears in 2 contracts
Samples: Share Purchase Agreement, Share Purchase Agreement (Virtusa Corp)
Confidentiality; Non-Compete; Non-Solicitation. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Shares purchased by Buyer (includinghereunder, without limitation, the goodwill inherent in each of the Group Companies Company and Seller Stockholder as of the Closing Date)applicable, upon the Closing of the transactions contemplated by this Agreement, the Selling Shareholders hereby agree agrees as follows:
(a) As an owner of the Shares, and/or an employee of the Company or a Company Subsidiary, each Selling Shareholder The Seller Stockholder has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) Information of the Group CompaniesCompany and its Affiliates and its related entities (each of the foregoing, an “Agora Entity,” and collectively, the “Agora Group”). Each Selling Shareholder agrees The Company and the Seller Stockholder agree that unless such Selling Shareholder Party first secures the written consent of an authorized representative of the Buyer, following the Closing such Selling Shareholder Party shall not use, and shall cause its Affiliates not to use, and shall use reasonable efforts to cause its agents, representatives, employees and officers not to use, for his his, her or itself or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary other than (i) on behalf of and for him to carry out his duties the benefit of Buyer or except (ii) to the extent such use or disclosure is required by law or order of any governmental authority Governmental Entity (in which event such Selling Shareholder shall, to the extent practicable, inform the Company and the Seller Stockholder, as applicable, shall inform Buyer in advance of any such required disclosure, shall cooperate with the Company and Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Selling Shareholder The Company and Seller Stockholder shall use reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.
(b) Each Selling Shareholder of the Company and Seller Stockholder further agrees that, at any time requested, such Selling Shareholder Party shall promptly deliver to the Company and Buyer all Confidential Information and other Intellectual Property (to the extent such Intellectual Property relates to the Purchased Assets) of the Agora Group Companies in such Selling Shareholder’s his, her or its possession and control and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and optical, magnetic or digital media, and all other materials containing or embodying any such Confidential Information and/or Intellectual Property. If the Company or Buyer requests, the Selling Shareholder Company and Seller Stockholder, as applicable, shall promptly provide written confirmation that such Selling Shareholder Party has returned all such materials.
(c) Each Selling Shareholder agrees of the Company and Seller Stockholder agree that each Group the Company and its Affiliates have received from third parties their confidential or proprietary information of such third party that may be subject to a duty on each Group the Company’s and Affiliates’ part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Selling Shareholder agrees The Company and Seller Stockholder agree that he/, she or it owes each Group Company Buyer and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence to the extent such information relates to the Purchased Assets, and each agrees not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Selling Shareholder Party’s future work for any Group Company Buyer consistent with the Group Company’s agreement with such third party) or to use it for the benefit of anyone other than for any Group Company Buyer or such third party (consistent with the Group Company’s agreement with such third party) without the express authorization of the Company or the Company SubsidiariesBuyer.
(d) Each For a period of the Major Stockholders, Key Employee Stockholders, Senior Key Employee Stockholders, and Management Key Employee Stockholders , such parties as listed on Schedule 4.3(dthree (3) (including any Affiliates thereof, even if not listed) (collectively, the “Key Stockholders”), acknowledges that he/she or it shall become familiar with Confidential Information concerning the Group Companies and that his/her or its services or relationship with the Group Companies have been and shall be of special, unique and extraordinary value to the Group Companies. For each Key Stockholder, for the applicable period years from the Closing Date as listed on Schedule 4.3(d) for such Key Stockholder (the “Non-Compete Period”), such Key neither the Company nor the Selling Stockholder shall notshall, and neither shall not authorize any of its respective Affiliates to, directly or indirectly (whether as an owner, partner, operator, manager, employee, officer, director, consultant, advisor, representative, agent or independent contractor of any Person or otherwise), to ) (i) engage in any business or accept employment with any Buyer Competitor or Company Competitor (as defined below); or (ii) provide any Competitive Services or Competitive Products (each as defined below) whether directly or indirectly and whether on its or his own or on behalf of any Buyer Competitor or Company Competitor (as defined below) to any third party; provided that the foregoing restriction shall not apply to ownership of less than 3% of the outstanding stock of any publicly-traded corporation. “Company Buyer Competitor” shall mean any company Person whose principal business, or any business unit, division or subsidiary of a company Person whose principal business, is the provision of global engineering and/or information technology services using an off-shore model where at least a majority of the company’s (or in the case of a business which competes unit, division or subsidiary, majority of its employees, as the case may be) employees are located in non-U.S. locations (i.e., India, Sri Lanka, China etc.) and “Company Competitor” shall mean any business that provides products or services the same as or substantially similar to or competitive with the Business as it is conducted by a Group Company on within the Closing DateTerritory. Each Key of the Company and Seller Stockholder agrees that this covenant is reasonable with respect to its duration, geographical area and scope.
Appears in 1 contract
Confidentiality; Non-Compete; Non-Solicitation. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Shares purchased by Buyer (including, without limitationhereunder, the goodwill inherent in each of the Group Companies Company and Seller Member, as of the Closing Date)applicable, upon the Closing of the transactions contemplated by this Agreement, the Selling Shareholders hereby agree agrees as follows:
(a) As an owner of the Shares, and/or an employee of the Company or a Company Subsidiary, each Selling Shareholder Seller Member has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) Information of the Group CompaniesCompany and its Subsidiaries and related entities (each of the foregoing, an “OSB Entity,” and collectively, the “OSB Group”). Each Selling Shareholder agrees The Company and Seller Member agree that unless such Selling Shareholder Party first secures the written consent of an authorized representative of the Buyer, such Selling Shareholder Party shall not use (and shall cause its respective agents, representatives, Affiliates, employees, officers and directors not to use) for his his, her or itself or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary other than (i) on behalf of and for him to carry out his duties the benefit of Buyer or except (ii) to the extent such use or disclosure is required by law or order of any governmental authority Governmental Entity (in which event such Selling Shareholder shall, to the extent practicable, inform the Company and the Seller Member, as applicable, shall inform Buyer in advance of any such required disclosure, shall cooperate with the Company and Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosuredisclosure at Buyer’s expense, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Selling Shareholder The Company and Seller Member shall use reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.
(b) Each Selling Shareholder The Company and Seller Member further agrees that, at any time requested, such Selling Shareholder Party shall promptly deliver to the Company and Buyer all Confidential Information and other Intellectual Property (to the extent such Intellectual Property relates to the Purchased Assets) of the OSB Group Companies in such Selling Shareholder’s his, her or its possession and control and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and optical, magnetic or digital media, and all other materials containing or embodying any such Confidential Information and/or Intellectual Property. If the Company or Buyer requests, the Selling Shareholder Company and Seller Member, as applicable, shall promptly provide written confirmation that such Selling Shareholder Party has returned all such materials. Notwithstanding the foregoing, the Seller Member and the Company may maintain copies of those items set forth in Section 1.1(a)(viii) but only for the purposes stated thereunder. .
(c) Each Selling Shareholder agrees The Company and Seller Member agree that each Group the Company and its Subsidiaries have received from third parties their confidential or proprietary information of such third party that may be subject to a duty on each Group the Company’s and its Subsidiaries’ part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Selling Shareholder agrees The Company and Seller Member agree that he/, she or it owes each Group Company Buyer and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence to the extent such information relates to the Purchased Assets and agrees not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Selling Shareholder Party’s future work for any Group Company Buyer consistent with the Group Company’s agreement with such third party) or to use it for the benefit of anyone other than for any Group Company Buyer or such third party (consistent with the Group Company’s agreement with such third party) without the express authorization of the Company or the Company SubsidiariesBuyer.
(d) Each of The Company and the Major Stockholders, Key Employee Stockholders, Senior Key Employee Stockholders, and Management Key Employee Stockholders , such parties as listed on Schedule 4.3(d) (including any Affiliates thereof, even if not listed) (collectively, the “Key Stockholders”), acknowledges Seller Member each acknowledge that he/she it or it he shall become familiar with Confidential Information concerning the OSB Group Companies and that his/her or its his services or relationship with the Group Companies have been and shall be of special, unique and extraordinary value to the Group CompaniesOSB Group. For each Key Stockholder, for the applicable a period of two (2) years from the Closing Date as listed on Schedule 4.3(d) for such Key Stockholder (the “Non-Compete Period”), such Key Stockholder shall notneither the Company nor the Selling Member shall, and neither shall not authorize any of its respective Affiliates to, directly or indirectly (whether as an owner, partner, operator, manager, employee, officer, director, consultant, advisor, representative, agent or independent contractor of any Person or otherwise)) to, to (i) engage in any business or accept employment with any Buyer Competitor or Company Competitor (as defined below); or (ii) provide any Competitive Services or Competitive Products (each as defined below) whether directly or indirectly and whether on his own or on behalf of any Buyer Competitor or Company Competitor (as defined below) to any third party; provided that the foregoing restriction shall not apply to ownership of less than 3% of the outstanding stock of any publicly-traded corporation. “Company Buyer Competitor” shall mean any company Person whose principal business, or any business unit, division or subsidiary of a company Person whose principal business, is the providing of global engineering and/or information technology services using an off-shore model where at least a majority of the company’s (or in the case of a business which competes with unit, division or subsidiary, majority of its employees, as the Business as it is conducted by a Group case may be) employees are located in non-U.S. locations (i.e., India, Sri Lanka, China etc.) to the extent that Seller Member was employed in such business unit, division or subsidiary of such Buyer Competitor and “Company on Competitor” shall mean any business that provides IT consulting, implementation, or business consulting services or products, including without limitation, services related to SAP products and services in the Closing Datebanking, financial service and insurance industries. Each Key Stockholder of the Company and Seller Member agrees that this covenant is reasonable with respect to its duration, geographical area and scope.
Appears in 1 contract
Confidentiality; Non-Compete; Non-Solicitation. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Shares purchased by Buyer (including, without limitationhereunder, the goodwill inherent in Company and each of the Group Companies Seller Member or Major Seller Member, as of the Closing Date)applicable, upon the Closing of the transactions contemplated by this Agreement, the Selling Shareholders hereby agree agrees as follows:
(a) As an owner of the Shares, and/or an employee of the Company or a Company Subsidiary, each Selling Shareholder Each Seller Member has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) Information of the Group CompaniesCompany and its Subsidiaries and related entities (each of the foregoing, an “ALAS Entity,” and collectively, the “ALAS Group”). Each Selling Shareholder agrees The Company and each Seller Member agree that unless such Selling Shareholder Party first secures the written consent of an authorized representative of the Buyer, such Selling Shareholder Party shall not use (and shall cause its respective agents, representatives, Affiliates, employees, officers and directors not to use) for his his, her or itself or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary other than (i) on behalf of and for him to carry out his duties the benefit of Buyer or except its Affiliates or (ii) to the extent such use or disclosure is required by law Legal Requirement or order of any governmental authority Governmental Entity (in which event such Selling Shareholder shall, to the extent practicable, inform the Company and the each Seller Member, as applicable, shall inform Buyer in advance of any such required disclosure, shall cooperate with the Company and Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Selling Shareholder The Company and each Seller Member shall use reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.
(b) Each Selling Shareholder The Company and each Seller Member further agrees agree that, at any time requested, such Selling Shareholder Party shall promptly deliver to the Company and Buyer all Confidential Information and other Intellectual Property (to the extent such Intellectual Property is included in the Purchased Assets) of the ALAS Group Companies in such Selling Shareholder’s his, her or its possession and control and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and optical, magnetic or digital media, and all other materials containing or embodying any such Confidential Information and/or Intellectual Property. If the Company or Buyer requests, the Selling Shareholder Company and each Seller Member, as applicable, shall promptly provide written confirmation that such Selling Shareholder Party has returned all such materials.
(c) Each Selling Shareholder agrees The Company and each Seller Member agree that each Group the Company and its Subsidiaries have received from third parties their confidential or proprietary information of such third party that may be subject to a duty on each Group the Company’s and its Subsidiaries’ part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Selling Shareholder The Company and each Seller Member agrees that he/, she or it owes each Group Company Buyer and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence to the extent such information relates to the Purchased Assets and agrees not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Selling Shareholder Party’s future work for any Group Company Buyer consistent with the Group Company’s agreement with such third party) or to use it for the benefit of anyone other than for any Group Company Buyer or such third party (consistent with the Group Company’s agreement with such third party) without the express authorization of the Company or the Company SubsidiariesBuyer.
(d) Each During the period beginning on the date hereof and ending on the three (3) year anniversary of the Major Stockholders, Key Employee Stockholders, Senior Key Employee Stockholders, and Management Key Employee Stockholders , such parties as listed on Schedule 4.3(d) (including any Affiliates thereof, even if not listed) (collectively, the “Key Stockholders”), acknowledges that he/she or it shall become familiar with Confidential Information concerning the Group Companies and that his/her or its services or relationship with the Group Companies have been and shall be of special, unique and extraordinary value to the Group Companies. For each Key Stockholder, for the applicable period from the Closing Date as listed on Schedule 4.3(d) for such Key Stockholder (the “Non-Compete compete Period”), such Key Stockholder neither the Company nor any Major Seller Member shall not, and shall not authorize any of its respective Affiliates to, (directly or indirectly (whether as an ownerindirectly) take any steps toward or preparations in respect of, partnereither for itself or himself, operator, manager, employee, officer, director, consultant, advisor, representative, agent or independent contractor on behalf of any other Person or otherwise(other than on behalf of Buyer and its Affiliates), to (i) own, manage, control, participate in, consult with, render services for or in any other manner engage in any business or accept employment with any Company Competitor anywhere in the United States, the United Kingdom, Netherlands, France, Canada, Switzerland, Germany, India or Sri Lanka (collectively, the “Restricted Countries”). For purposes of this Section 4.5, the term “participate” includes any direct or indirect interest in any enterprise, whether as defined below)an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; or (ii) provide any Competitive Services or Competitive Products (each as defined below) whether directly or indirectly and whether on his own or on behalf of any Company Competitor (as defined below) to any third party; provided provided, however, that the foregoing restriction activities shall not apply to include passive ownership of less than 3% two percent (2%) of the outstanding stock of any a publicly-held corporation whose stock is traded corporationon a national securities exchange or in the over-the-counter market. “The Company Competitor” shall mean any company whose principal business, or any business unit, division or subsidiary of a company whose principal business, is a business which competes with the Business as it is conducted by a Group Company on the Closing Date. Each Key Stockholder and each Major Seller Member agrees that this covenant is reasonable with respect to its duration, geographical area and scope.
(e) During the Non-compete Period, neither the Company nor any Major Seller Member shall (directly or indirectly) take any steps toward or preparations in respect of, either for itself or himself, or on behalf of any other Person (other than on behalf of Buyer or its Affiliates) (i) induce or attempt to induce any Person who, as of the date hereof, is an employee of Buyer, or, pursuant to the terms of an Employment Agreement, becomes an employee of Buyer, to leave the employ of Buyer, (ii) hire or employ any Person who was an employee of Buyer at any time during the six month period immediately prior to the date hereof, (iii) call on, divert, take away, solicit, or provide any services to any Company Customer, Prospective Customer, supplier, licensee, licensor or other business relation of the ALAS Group or Buyer, in each case as of the date hereof, with respect to products and/or services that have been provided by the ALAS Group or Buyer, are currently being provided by the ALAS Group or Buyer or which the ALAS Group or Buyer is currently in the process of developing (in each case, other than on behalf of Buyer or its Affiliates), or (iv) induce or attempt to induce any customer, client, supplier, licensee, licensor or other business relation of the ALAS Group or Buyer, in each case as of the date hereof, to cease doing business with Buyer.
(f) The Company and each Major Seller Member acknowledge that it or he has had access to Confidential Information concerning the Purchased Assets. The Company and each Major Seller Member further acknowledge that the scope of the business of the ALAS Group relating to the Purchased Assets extends throughout the Restricted Countries (such that is not practical to limit the restrictions contained in this Section 4.5 to a specified geographic area within the Restricted Countries) and, that the Company and each Major Seller Member has had direct or indirect knowledge and/or oversight (and, in the case of an employee of the ALAS Group, responsibilities and duties with respect to) the businesses of the ALAS Group, including that relating to the Purchased Assets, and its and their current and prospective employees, vendors, customers, clients and other business relations, and that, accordingly, the restrictions contained in this Section 4.5 are reasonable in all respects and necessary to protect the goodwill and Confidential Information relating to the Purchased Assets and that, without such protection, the customer and client relationships and competitive advantages relating to the Purchased Assets would be materially adversely affected. It is specifically recognized by the Company and each Major Seller Member that its or his services to the ALAS Group relating to the Purchased Assets are special, unique, and of extraordinary value, that Buyer has a protectable interest in prohibiting the Company and each Major Seller Member as provided in this Section 4.5, that, in the case of an employee of the Company, each such Major Seller Member was responsible for the creation and preservation of the ALAS Group goodwill relating to the Purchased Assets, that money damages are insufficient to protect such interest, and that such prohibitions would be necessary and appropriate without regard to payments being made to the Company and each Major Seller Member hereunder. Each Major Seller Member further acknowledges that the restrictions contained in this Section 4.5 do not impose an undue hardship on him and, since he has general business skills which may be used in industries other than that in which each ALAS Entity conducts its business and do not deprive such Major Seller Member of his livelihood.
(g) If, at the time of enforcement of this Agreement, a court or arbitrator’s award holds that the restrictions stated in this Section 4.5 are unreasonable under circumstances then existing, the Parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The Parties hereto agree that money damages would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.5 that is continuing, Buyer, its successors and permitted assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof. In addition, in the event of a breach or violation by the Company or any Major Seller Member of this Section 4.5, the Non-compete Period with respect to such Party shall be tolled until such breach or violation has been duly cured. In the event an arbitrator or a court of competent jurisdiction determines that the Company or a Seller Member has breached any provision of this Section 4.5, in addition to all other rights and remedies, Buyer shall be entitled to recover from such Party attorneys’ fees associated with establishing such breach. The Company and each Seller Member agrees that the restrictions contained in this Section 4.5 are reasonable.
(h) The Company and each Seller Member acknowledge, represent and warrant that: (i) sufficient consideration has been given to such Party by Buyer with respect to the transactions contemplated by this Agreement; (ii) he, she or it has consulted with independent legal counsel regarding his, her or its rights and obligations under this Section 4.5, (iii) that he, she or it fully understands the terms and conditions contained herein, and (iv) that the agreements in this Section 4.5 are reasonable and necessary for the protection of Buyer and are an essential inducement to Buyer to enter into this Agreement.
(i) Notwithstanding anything to the contrary contained herein, any Major Seller Member (the “Requesting Member”) may request at any time a limited waiver (each, a “Limited Waiver”) from Buyer of the restrictions set forth in Section 4.5(d) and Section 4.5(e) of this Agreement with respect to such Requesting Member (each, a “Waiver Request”). Any Waiver Request must be delivered to Buyer in accordance with the notice provisions set forth in Section 8.6 of this Agreement and must specify, in reasonable detail, any and all information that such Requesting Member deems, in good faith, to be necessary or desirable in connection with a full and complete evaluation of such Waiver Request by Buyer. Buyer may request any additional information that Buyer deems, in good faith, necessary or desirable in connection with its evaluation of the Waiver Request (the “Additional Information”). Buyer shall make a final determination as to the Waiver Request without unreasonable delay and, in any event, within thirty (30) days of Buyer’s receipt of the Waiver Request (the “Evaluation Period”); provided, however, if Buyer requests any Additional Information, Buyer shall make a final determination as to such Waiver Request on or before the later of (A) ten (10) Business Days from Buyer’s receipt of all Additional Information and (B) the expiration of the Evaluation Period. In the event Buyer grants all or any portion of the Waiver Request, Buyer shall send a Limited Waiver providing the parameters under which such Limited Waiver will be granted, including without limitation, any restrictions or limitations thereon that Buyer deems, in its sole and absolute discretion, necessary or desirable. Such Limited Waiver shall become effective upon the execution and delivery thereof by Buyer and the receipt by Buyer of an acknowledgment and acceptance from the Requesting Member. Buyer and the Requesting Member shall each act reasonably in connection with any Waiver Request submitted and evaluated in accordance with this Section 4.5(i). For the avoidance of doubt and notwithstanding anything to the contrary contained herein, determinations with respect to any Waiver Request shall be made in Buyer’s sole and absolute discretion. Nothing herein shall be deemed to limit, amend or otherwise modify any of the restrictions contained in, or provisions of, Section 4.5(d) and Section 4.5(e) of this Agreement.
Appears in 1 contract
Confidentiality; Non-Compete; Non-Solicitation. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Shares purchased by Buyer (including, without limitationhereunder, the goodwill inherent in Company and each of the Group Companies as of the Closing Date), upon the Closing of the transactions contemplated by this Agreement, the Selling Shareholders hereby Shareholder agree as follows:follows (except that no Shareholder shall be liable for any breach of this Section 4.5 by any other Shareholder):
(a) As an owner of Each Shareholder and the Shares, and/or an employee Company acknowledge and agree that the Purchased Assets include Confidential Information of the Company or a Company Subsidiary, and each Selling Shareholder has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) Information of the Group CompaniesCompany. Each Selling The Company and each Shareholder agrees that agree that, unless such Selling Shareholder Party first secures the written consent of an authorized representative of the Buyer, such Selling Shareholder Party shall not use (and shall cause its respective agents, representatives, Affiliates, employees, officers and directors not to use) for his itself or anyone else, and shall not disclose to others, any Purchased Assets which constitute Confidential Information, except as may be necessary other than (i) on behalf of and for him to carry out his duties the benefit of Buyer or except its Affiliates or (ii) to the extent such use or disclosure is required by law Legal Requirement or order of any governmental authority Governmental Entity (in which event such Selling Shareholder the Company and each Shareholder, as applicable, shall, to the extent practicablepermitted by applicable Legal Requirements, inform the Company and the Buyer in advance of any such required disclosure, shall shall, at Buyer’s sole expense, cooperate with the Company and Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Selling The Company and each Shareholder shall use reasonable care to safeguard any Purchased Assets which constitute Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.
(b) Each Selling The Company and each Shareholder further agrees agree that, at any time requested, such Selling Shareholder Party shall reasonably promptly deliver to the Company and Buyer or destroy, at such Party’s sole option, all Confidential Information and other Intellectual Property of the Group Companies all copies thereof in such Selling Shareholder’s its possession and control and all copies thereofcontrol, in whatever form or medium, including, without limitation, written records, optical and optical, magnetic or digital media, and all other materials to the extent containing or embodying any such Intellectual PropertyPurchased Assets which constitute Confidential Information. If the Company or Buyer requests, the Selling Shareholder Company and each Shareholder, as applicable, shall reasonably promptly provide written confirmation that such Selling Shareholder Party has returned all such materials.
(c) Each Selling Shareholder agrees that each Group Company have received from third parties their confidential In addition to, and without limitation of, any term or proprietary information subject to provision of any employment agreement between Buyer or its Affiliates and a duty on each Group Company’s part to maintain Shareholder, the confidentiality of such information and to use it only for certain limited purposes. Each Selling Shareholder agrees that he/she it owes each Group Company and such third parties a duty to hold all such confidential or proprietary information in each Shareholder agree that during the strictest confidence and not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Selling Shareholder future work for any Group Company consistent with the Group Company’s agreement with such third party) or to use it for the benefit of anyone other than for any Group Company or such third party (consistent with the Group Company’s agreement with such third party) without the express authorization of the Company or the Company Subsidiaries.
(d) Each of the Major Stockholders, Key Employee Stockholders, Senior Key Employee Stockholders, and Management Key Employee Stockholders , such parties as listed period beginning on Schedule 4.3(d) (including any Affiliates thereof, even if not listed) (collectively, the “Key Stockholders”), acknowledges that he/she or it shall become familiar with Confidential Information concerning the Group Companies and that his/her or its services or relationship with the Group Companies have been and shall be of special, unique and extraordinary value to the Group Companies. For each Key Stockholder, for the applicable period from the Closing Date as listed and ending on Schedule 4.3(d) for such Key Stockholder December 31, 2017 (the “Non-Compete compete Period”), such Key Stockholder neither the Company nor any Shareholder shall not, and shall not authorize any of its respective Affiliates to, (directly or indirectly (whether as an ownerindirectly), partnereither for itself, operator, manager, employee, officer, director, consultant, advisor, representative, agent or independent contractor on behalf of any other Person or otherwise(other than on behalf of Buyer and its Affiliates), to (i) own, manage, control, participate in, consult with, render services for or in any other manner engage in any business a Competing Business or accept employment with any Company Competitor which conducts a Competing Business in any country or jurisdiction, domestic or foreign, in which the Company or Buyer or its Affiliates conduct the Business as of the Closing Date (collectively, the “Restricted Countries”). For purposes of this Section 4.5, the term “participate” includes any direct or indirect interest in any enterprise, whether as defined below)an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; or (ii) provide any Competitive Services or Competitive Products (each as defined below) whether directly or indirectly and whether on his own or on behalf of any Company Competitor (as defined below) to any third party; provided provided, however, that the foregoing restriction activities shall not apply to include passive ownership of less than 3% two percent (2%) of the outstanding stock of any a publicly-held corporation whose stock is traded corporationon a national securities exchange or in the over-the-counter market. “The Company Competitor” shall mean any company whose principal business, or any business unit, division or subsidiary of a company whose principal business, is a business which competes with the Business as it is conducted by a Group Company on the Closing Date. Each Key Stockholder and each Shareholder agrees that each of the covenants of this Section 4.5 are independent covenants and each such covenant is reasonable with respect to its duration, geographical area and scope.
(d) During the Non-compete Period, neither the Company nor any Shareholder shall (directly or indirectly), either for itself, or on behalf of any other Person (other than on behalf of Buyer or its Affiliates) (i) solicit, induce or attempt to induce any individual who, as of the date hereof, is an employee of the Company, or, pursuant to the terms hereof becomes an employee of Buyer or its Affiliates, to leave the employ of Buyer or its Affiliates, or (ii) solicit, hire or employ any individual who was an employee of the Company or Buyer or its Affiliates at any time during the six (6) month period immediately prior to the date hereof; provided, however, that the foregoing shall not prevent the Company or any Shareholder from (A) placing general advertisements or other general solicitations which are not specifically directed at such Persons or (B) from soliciting and/or hiring any Person whose employment with the Company or Buyer or its Affiliates has been terminated at least six (6) months prior to the date of such soliciting and/or hiring.
(e) Without limitation of Section 4.5(c), during the Non-compete Period, neither the Company nor any Shareholder shall (directly or indirectly), either for itself, or on behalf of any other Person, (i) divert, take away, solicit on behalf of a Company Competitor, or provide any services on behalf of a Company Competitor to any Company Customer, Prospective Customer, supplier, licensee or licensor of the Company or Buyer or its Affiliates, with respect to products and/or services that are currently being provided by the Company or Buyer or its Affiliates or which the Company is currently in the process of developing (in each case, other than on behalf of Buyer or its Affiliates), or (ii) induce or attempt to induce any customer, client, supplier, licensee, licensor or other business relation of the Company or Buyer or its Affiliates, to cease doing business with the Company or Buyer or its Affiliates.
(f) The Company and each Shareholder acknowledge that the scope of the Business relating to the Purchased Assets extends throughout the Restricted Countries (such that is not practical to limit the restrictions contained in this Section 4.5 to a specified geographic area within the Restricted Countries) and, that the Company and each Shareholder has had direct or indirect knowledge and/or oversight (and, in the case of an employee of the Company, responsibilities and duties with respect to) the Business, including that relating to the Purchased Assets, and its and their current and prospective employees, vendors, customers, clients and other business relations, and that, accordingly, the restrictions contained in this Section 4.5 are reasonable in all respects and necessary to protect the goodwill and Confidential Information included in the Purchased Assets and that, without such protection, the customer and client relationships and competitive advantages relating to the Purchased Assets would be materially adversely affected. It is specifically recognized by the Company and each Shareholder that his or her services to the Company relating to the Purchased Assets are special, unique, and of extraordinary value, that Buyer has a protectable interest in prohibiting the Company and each Shareholder as provided in this Section 4.5, that, each Shareholder was responsible for the creation and preservation of the Company goodwill relating to the Purchased Assets, that money damages are insufficient to protect such interest, and that such prohibitions are necessary and appropriate and are given in consideration of the payments being made to the Company hereunder as to which each Shareholder will directly benefit. Each Shareholder further acknowledges that the restrictions contained in this Section 4.5 do not impose an undue hardship on him or her and, since he or she has general business skills which may be used in industries other than that in which the Company conducts the Business and do not deprive such Shareholder of his or her livelihood.
(g) If, at the time of enforcement of this Agreement, a court or arbitrator’s award holds that the restrictions stated in this Section 4.5 are unreasonable under circumstances then existing, the Parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The Parties hereto agree that money damages may not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.5 that is continuing, Buyer, its successors and permitted assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof and may withhold any payments due the Company hereunder pending a final determination thereof. In addition, in the event of a breach or violation by the Company or any Shareholder of this Section 4.5, the Non-compete Period with respect to such Party shall be tolled until such breach or violation has been duly cured. In the event an arbitrator or a court of competent jurisdiction determines that the Company or a Shareholder has breached any provision of this Section 4.5, in addition to all other rights and remedies, Buyer shall be entitled to an equitable accounting of all earnings, profits and other benefits arising from any such breach, offset any damages or other award against any payments due to the Company hereunder, including any reasonable attorneys’ fees incurred in connection with such breach.
(h) The Company and each Shareholder acknowledge, represent and warrant that: (i) sufficient consideration has been given to such Party by Buyer with respect to the transactions contemplated by this Agreement; (ii) he or she has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.5, (iii) he or she fully understands the terms and conditions contained herein, and (iv) the agreements in this Section 4.5 are reasonable and necessary for the protection of Buyer and are an essential inducement to Buyer to enter into this Agreement.
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