Common use of Noncompetition; Non-solicitation Clause in Contracts

Noncompetition; Non-solicitation. (a) During the period commencing on the Closing Date and ending on the five (5) year anniversary of the Closing Date (the “Restricted Period”), Seller shall not, and shall cause its Subsidiaries not to, provide ECR Services to ECR Clients for ECR Projects (a “Competing Activity”); provided, that notwithstanding the foregoing neither Seller nor any of its Subsidiaries shall be precluded or otherwise restricted from: (i) providing ECR Services on ECR Projects as necessary to (A) avoid breach of any Contract to which Seller or any of its Subsidiaries is a party as of the Closing, or (B) transition personnel of Seller or any of its Subsidiaries to non-ECR Projects, in each case, for up to one (1) year following the Closing Date or for such longer periods as may permitted by the Transition Services Agreement; (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all or any portion of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects). (b) For the avoidance of doubt, in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment by Buyer to Seller), and on the same terms agreed, by Seller or any of its Subsidiaries therefor (in each case as reflected in the definitive documentation signed by the parties to effect such Seller Acquisition, excluding for the avoidance of doubt any restrictive covenants or similar terms personal to the seller of such Person, assets or business). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open for a period of sixty (60) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16. (c) Subject to Section 5.16(b), in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of such time), then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing that the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following the closing of such Seller Acquisition (but in any event within eighteen (18) months of the closing of such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestiture).

Appears in 2 contracts

Samples: Stock and Asset Purchase Agreement (Jacobs Engineering Group Inc /De/), Stock and Asset Purchase Agreement (Jacobs Engineering Group Inc /De/)

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Noncompetition; Non-solicitation. (a) During the period commencing on the Closing Date and ending on the five (5) year anniversary of the Closing Date (the “Restricted Period”), Seller Parent and the Sellers shall not, and shall cause its the Non-Business Subsidiaries not to, provide ECR Services directly or indirectly, engage in any business or activities, or establish any new businesses, in competition with the Restricted Business as conducted immediately prior to ECR Clients for ECR Projects Closing in the geographic areas in which the Restricted Business sells products and services immediately prior to Closing including Europe, North America, China and Turkey (each, a “Competing Activity”)) or assist others from engaging in Competing Activity; provided, that notwithstanding the foregoing neither Seller nor shall not prohibit Parent, the Sellers or any of its the Non-Business Subsidiaries shall be precluded or otherwise restricted from: (i) providing ECR Services the acquisition of all or any portion of the equity interests of any Person engaged in a Competing Activity but only where such Competing Activity represents less than twenty percent (20%) of the revenues of such person (based on ECR Projects its latest annual financial statements); provided, that if the Competing Activity accounts for more than five percent (5%) of the revenues of such Person (based on its latest annual financial statements), Parent, the Sellers or any Non-Business Subsidiary, as necessary applicable, shall be required to use commercially reasonable efforts to cease such Competing Activity or divest such Person of that portion of the business that constitutes a Competing Activity within twelve (12) months after the consummation of the acquisition to the extent required to be in compliance with this Section 5.13(a)(i); (ii) the acquisition, holding of investments or direct or indirect ownership of any voting stock, capital stock or other equity interest of any Person engaged in a Competing Activity, so long as such ownership interest represents not more than five percent (5%) of the aggregate voting power or outstanding capital stock or other equity interests of such Person; or (iii) owning, engaging in, conducting or operating any of the Retained Businesses. (b) Each investment or acquisition made by Parent, the Sellers or any Non-Business Subsidiary that is subject to the provisions of this Section 5.13 must be permissible hereunder at the time of such investment; provided, however, that any such investment which was permissible when made cannot thereafter be the basis of a claim of violation of this Section 5.13. (c) For a period of two (2) years from and after the Closing Date, Parent and the Sellers shall not, and shall cause the Non-Business Subsidiaries not to, directly or indirectly (unless previously authorized in an advance writing from Buyer): (i) request, induce or attempt to influence any Business Employee to terminate his or her employment with or service to Buyer or any Business Entity; or (ii) hire or employ, or solicit the employment of, or make or extend any offer of employment to, any management-level Business Employee who is then employed by Buyer or the Business Entities. The restrictions of this clause (ii) of this Section 5.13(c) shall cease to apply to a management-level Business Employee nine (9) months after the later of (A) avoid breach the date of termination of his or her employment with Buyer or any Contract to Business Entity and (B) the last date on which Seller such Business Employee receives severance or other termination payments from Buyer or any Business Entity. Nothing in clause (ii) of this Section 5.13(c) shall restrict or prevent Parent or any of its Subsidiaries is from making generalized searches for employees by the use of advertisements in the media of any form (including trade media) or by engaging search firms that are not instructed to solicit the Business Employees or, in either case, hiring any Business Employee who responds to such generalized searches or search firm solicitations. (d) For a party period of two (2) years from and after the Closing Date, Buyer shall not, and shall cause the Business Entities not to, directly or indirectly (unless previously authorized in an advance writing from the Parent or the Sellers, as the case may be): (i) request, induce or attempt to influence any employee of Parent, the Closing, or (B) transition personnel of Seller Sellers or any of its Subsidiaries Non-Business Subsidiary to nonterminate his or her employment with or service to Parent, the Sellers or any Non-ECR Projects, in each case, for up to one (1) year following the Closing Date or for such longer periods as may permitted by the Transition Services Agreement;Business Subsidiary; or (ii) providing ECR Services using its Retained Assets hire or employ, or solicit the employment of, or make or extend any offer of employment to, any management-level employee of Parent, the Sellers or any Non-Business Subsidiary, or any other employee of Parent, the Sellers or any Non-Business Subsidiary to whom Buyer is introduced, of whom Buyer has become aware, or with whom Buyer has otherwise contacted, as a result of the preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby. The restrictions of clause (ii) of this Section 5.13(d) shall cease to apply to a management-level employee of Parent, the Sellers or any Non-Business Subsidiary nine (9) months after the later of (A) the date of termination of his or her employment with the Parent, the Sellers or any Non-Business Subsidiary and (B) the last date on which such as individual receives severance or other termination payments from Parent, the Specialized Manufacturing BusinessSellers or any Non-Business Subsidiary. Nothing in clause (ii) of this Section 5.13(d) shall restrict or prevent Buyer or any of the Business Entities from making generalized searches for employees by the use of advertisements in the media of any form (including trade media) or as may be expressly permitted pursuant by engaging search firms that are not instructed to solicit any Transaction Document; (iii) subject to employee of Parent, the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all Sellers or any portion of Non-Business Subsidiary or, in either case, hiring any Person (whether such employee who responds to such generalized searches or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects)search firm solicitations. (be) For The Parties mutually agree this Section 5.13 is reasonable and necessary to protect and preserve Buyer’s and Parent’s legitimate business interests and the avoidance value of doubtthe Business, the Business Entities and the Retained Businesses, and to prevent any unfair advantage conferred on any Party and their respective successors. (f) Notwithstanding any other provision of this Agreement, it is understood and agreed that the remedy of indemnity payments pursuant to Article IX and other remedies at law would be inadequate in the event (i) Seller or case of any breach of its Subsidiaries undertakes a Seller Acquisition during the Restricted Periodcovenants contained in Section 5.13. It is accordingly agreed that Buyer and the Business Entities, on one hand, and (ii) the PersonParent, assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment by Buyer to Seller), and on the same terms agreedother hand, by Seller or any of its Subsidiaries therefor (in each case as reflected in the definitive documentation signed by the parties to effect such Seller Acquisition, excluding for the avoidance of doubt any restrictive covenants or similar terms personal to the seller of such Person, assets or business). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open for a period of sixty (60) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain equitable relief, including an injunction or injunctions to prevent breaches of Section 5.13 and operate to enforce specifically the performance of the terms and provisions of Section 5.13), without proof of actual damages (and the Parties hereby waive any requirement for the securing or posting of any bond in connection with such Personremedy), assets this being in addition to any other remedy to which the Parties are entitled at law or business in its sole discretion and equity. The Parties further agree not to assert that such a remedy, including a remedy of specific performance, is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for any such retention breach. (g) If (i) a Regulatory Approval in a particular jurisdiction is conditional upon or otherwise subject to the modification of any provision of this Section 5.13 as provided in the decision of the Governmental Authority in question, then such provision shall be automatically considered as modified as provided or required in such decision without the need for any intervention by the Parties or formal modification of the Agreement by the Parties or (ii) any Governmental Authority declares that any term or provision of this Section 5.13 is invalid or unenforceable, then, in either case: (a) the Governmental Authority making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the decision of the Governmental Authority may be appealed. Any modification under subparagraphs (i) or (ii) of this Section 5.13(g) shall apply only with respect to the operation of such provision in the particular jurisdiction in which such determination is made and shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16. (c) Subject to Section 5.16(b), in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of modify such time), then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing that the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following the closing of such Seller Acquisition (but in any event within eighteen (18) months of the closing of such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries provision or any other Person other than provision or the initial notice enforcement of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified Agreement in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestiture)jurisdiction.

Appears in 2 contracts

Samples: Purchase and Sale Agreement (Aleris Corp), Purchase and Sale Agreement (Signature Group Holdings, Inc.)

Noncompetition; Non-solicitation. (a) During The Vendor agrees that during the three (3) year period commencing beginning on the Closing Date and ending on the five (5) year anniversary date of the Closing Date (the “Restricted "Noncompetition Period”), Seller shall ") the Vendor will not, and shall cause its Subsidiaries will not to, provide ECR Services to ECR Clients for ECR Projects (a “Competing Activity”); provided, that notwithstanding the foregoing neither Seller nor permit any of its Subsidiaries shall be precluded directors, officers, employees or otherwise restricted from: agents to, directly or indirectly through any of its Affiliates, (i) providing ECR Services on ECR Projects as necessary to (A) avoid breach engage or participate in any business in the Line of any Contract to which Seller or any of its Subsidiaries is a party as of Business, anywhere in the ClosingTerritory, or (B) transition personnel take any action to invest in, own, manage, operate, control or participate in any Person engaging in any business that competes within the Line of Seller Business anywhere in the Territory, if that Person’s revenues attributable to the Line of Business amount to more than 10% of such entity’s total annual revenues; provided that if such revenue threshold is exceeded the Vendor shall have twelve months from the date of completion of the corresponding transaction to divest that portion of the entity engaged in the Line of Business, or (ii) (A) solicit, sell, call upon, advise, do or attempt to do business with or otherwise contact in regard to diverting business away from the Business, any customer or supplier of the Business as of the Closing Date, or (B) solicit, encourage or induce any customer or supplier of the Business to terminate or materially and adversely alter its relationship with Subco, the Purchaser or the Business. The Vendor shall not be in violation of this Section 1(a) solely as a result of (x) Vendor and its Affiliates, as applicable, fulfilling its obligations under the Other Transaction Documents, or (y) an investment in stock or other securities of any publicly held entity if the Vendor or any of its Subsidiaries Affiliates does not, directly or indirectly, hold in the aggregate more than a total of three (3%) of all such shares of stock or other securities issued and outstanding. For purposes hereof, “Line of Business” means [Redacted – Commercially Sensitive]. (b) During the period which any of Other Transaction Documents are in effect and for two (2) years thereafter, the Vendor will not permit any of its directors, officers, employees or agents to, directly or indirectly through any of its Affiliates, whether on the Vendor’s own behalf or on behalf of any other Person, (i) solicit, induce, persuade, entice or endeavor to non-ECR Projectssolicit, induce, persuade or entice an Employee or any current (meaning at date of this Agreement) member of management of Purchaser or any of its Affiliates to leave employment or cease performing services for Subco, the Business, or the Purchaser following the Closing, (ii) hire or retain the services of, or attempt to hire or retain the services of, an Employee or any current member of management of Purchaser or any of its Affiliates, (iii) assist in the hiring or attempted hiring of an Employee or any member of management of Purchaser or any of its Affiliates by any Person, other than, in each case, for up to one (1) year following the Closing Date or for such longer periods as may permitted by the Transition Services Agreement; (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all Employee or any portion current member of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects). (b) For the avoidance management of doubt, in the event (i) Seller Purchaser or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and Affiliates who (iiA) the Person, assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver responds to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily advertising placed in a Competing Activity newspaper, trade journal, through a website or via other media of general circulation or an executive search firm acting on the Vendor’s behalf whose effort were not directed at the same multiple Employees or any current member of earnings paid (increased by the cash tax liability management of Seller and its Subsidiaries resulting from such sale and any associated payment by Buyer to Seller), and on the same terms agreed, by Seller Purchaser or any of its Subsidiaries therefor Affiliates, (in each case as reflected in B) who has terminated his/her employment with, or has been terminated by, Subco or the definitive documentation signed by Purchaser, or (C) who initiates contact with the parties to effect such Seller Acquisition, excluding for Vendor with no encouragement or inducement on the avoidance of doubt any restrictive covenants or similar terms personal to the seller of such Person, assets or business). Seller shall include with such offer copies part of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open for a period of sixty (60) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16Vendor. (c) Subject to Section 5.16(b)As used in this Agreement, in the event (i) Seller "Person" shall mean any natural person, firm, partnership, association, corporation, company, trust, business trust, or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of other such time), then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing that the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following the closing of such Seller Acquisition (but in any event within eighteen (18) months of the closing of such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestiture).entity

Appears in 1 contract

Samples: Noncompetition, Nonsolicitation and Confidentiality Agreement (Profound Medical Corp.)

Noncompetition; Non-solicitation. (a) During Subject to the provisions of Section 6.3(b), as a part of the inducement to Buyer to enter into this Agreement, each of Seller and Xx. Xxxxxxxxxx (each, a “Restricted Party” and together the “Restricted Parties”) hereby agrees that for a period commencing on the Closing Date of four (4) years from and ending on the five (5) year anniversary of after the Closing Date (the “Restricted Period”), Seller the Restricted Party shall not, and shall cause its Subsidiaries each Restricted Affiliate not to, provide ECR Services to ECR Clients for ECR Projects (without the prior written consent of Buyer, directly or indirectly, serve as an officer, director, or partner or member of, or be employed by or serve as a “Competing Activity”); providedconsultant with, that notwithstanding the foregoing neither Seller nor any of its Subsidiaries shall be precluded or have an equity or equity-like interest in, or otherwise restricted from: own, manage, operate or control, directly or indirectly, any business, firm, entity or other Person which is engaged anywhere in the world in providing consulting and/or engineering services to customers in the United States related to the conversion of motor vehicle engines to alternative fuels or in any other business that the Company was engaged in at any time during the twelve (i12) providing ECR Services on ECR Projects as necessary to (A) avoid breach of any Contract to which Seller or any of its Subsidiaries is a party as of the Closing, or (B) transition personnel of Seller or any of its Subsidiaries to non-ECR Projects, in each case, for up to one (1) year following months preceding the Closing Date or for which the Company has or had under design, development or consideration during such longer periods as may permitted by the Transition Services Agreement; twelve (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) 12)-month period; provided, however, Restricted Parties shall not be prohibited from engaging in activities involving high performance racing applications with 85% or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all or any portion of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects)greater ethanol engines. (b) For the avoidance of doubt, in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during During the Restricted Period, each Restricted Party shall not, directly or indirectly, and shall cause each Restricted Affiliate not to (i) induce or attempt to induce any employee of the Company on the Closing Date who is hired by Buyer or any Buyer Affiliate to leave the employ of Buyer or such Buyer Affiliate, or in any way interfere with the relationship between any such employee and the Buyer or such Buyer Affiliate, (ii) hire directly or through an entity any Person who was an employee of the Company on the Closing Date (except, in the case of clauses (i) and (ii) the Personof this Section 6.3(b), assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment employee who was involuntarily discharged by Buyer to Seller), and on the same terms agreed, by Seller or any of its Subsidiaries therefor (in each case as reflected in Buyer Affiliate on or after the definitive documentation signed by the parties to effect such Seller Acquisition, excluding Closing Date for any reason other than for the avoidance violation of doubt any non-competition, non-disclosure or other restrictive covenants with Buyer or similar terms personal to the seller of such Person, assets or businessa Buyer Affiliate). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open for a period of sixty (60) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16. (c) Subject During the Restricted Period, the Restricted Party agrees that it will not, and it will cause the Restricted Affiliates not to, induce or attempt to induce any customer or supplier of the Company on the Closing Date to cease doing business with the Company and/or Buyer, or in any way interfere with the relationship between any such customer or supplier and the Company and/or Buyer. (d) Each of the Restricted Parties agrees not to disclose any Confidential Information to any Person or use any Confidential Information in any manner; provided, however, it shall not be a breach of this subsection (d) for a Restricted Party to provide a copy of this Section 5.16(b6.3 and of the definitions of the terms referred to in this Section 6.3 to such Restricted Party’s attorneys, accountants, financial advisors or prospective employers. (e) Each Restricted Party acknowledges that any breach of the provisions of this Section 6.3 by any Restricted Party will result in irreparable injury to Buyer and the Company (following the consummation of the Contemplated Transactions), and that Buyer’s remedies at law would be inadequate and insufficient. Accordingly, in the event (i) Seller of any such breach of any of the provisions of this Section 6.3, Buyer shall be entitled to preliminary and/or permanent injunctive relief, in addition to all such other legal and equitable remedies as may be available to Buyer therefor. In the event any of the provisions of this Section 6.3 are determined by a court of competent jurisdiction to be contrary to any applicable law, or for any reason to be unenforceable or invalid as written, the parties acknowledge that such court, if permitted by applicable law, shall modify any of such provisions so as to permit enforcement thereof as so modified. If a Restricted Party is finally determined by any court of competent jurisdiction to have violated any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of such time)obligations under this Section 6.3, then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing time period hereunder shall be extended with respect to that Restricted Party by the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following equal to that period beginning when the closing of activities constituting such Seller Acquisition (but in any event within eighteen (18) months of violation commenced and ending when the closing of activities constituting such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestiture)violation terminated.

Appears in 1 contract

Samples: Equity Purchase Agreement

Noncompetition; Non-solicitation. (a) During In consideration of the payments described in Section 1.2 of this Agreement, Sellers agree that, during the period commencing on the Closing Date and ending on the five earlier of (5i) year the third (3rd) anniversary of the Closing Date and (ii) the “Restricted Period”consummation of a Parent Change of Control, neither Sellers nor any of their Subsidiaries shall, directly or indirectly, (A) establish or enter into, advise, consult with or become an owner in part of, any Person that engages in any business, or in any way engage in any business (either as principal or as a shareholder, owner, partner, joint venturer, consultant, advisor or representative of any Person), that competes with the Purchased Business, or (B) solicit any Person that is a customer of or vendor to the Company or the Company Subsidiary (other than through general advertising) in a manner that is reasonably likely to cause such Person to reduce its business transactions with the Company or the Company Subsidiary or otherwise adversely interfere with the conduct of the Purchased Business. It is understood and agreed that the passive ownership of not more than five percent (5%) of the stock or other equity interests of a public company shall not constitute a violation of this Section 5.18(a). (b) Each Seller shall notagrees that, during the period commencing on the date of this Agreement and shall cause its Subsidiaries not toending on the first (1st) anniversary of the Closing Date, provide ECR Services to ECR Clients for ECR Projects (a “Competing Activity”); provided, that notwithstanding the foregoing neither Seller it nor any of its Subsidiaries shall be precluded or otherwise restricted from: employ (iexcept as a Company Employee) providing ECR Services on ECR Projects as necessary to (A) avoid breach of any Contract to which Seller or any of its Subsidiaries person who is a party as an employee of the ClosingCompany, the Company Subsidiary or (B) transition personnel of Seller or any of its Subsidiaries to non-ECR Projectsthe Purchased Business, in each case, for up to one (1) year following the Closing Date or for unless such longer periods as may permitted by the Transition Services Agreement; (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all or any portion of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects). (b) For the avoidance of doubt, in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment by Buyer to Seller), and on the same terms agreed, by Seller or any of its Subsidiaries therefor (in each case as reflected in the definitive documentation signed by the parties to effect such Seller Acquisition, excluding for the avoidance of doubt any restrictive covenants or similar terms personal to the seller of such Person, assets or business). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open person's employment has been terminated for a period of sixty at least six (606) days from Buyer’s receipt thereofmonths. If Buyer fails to accept such offer and execute definitive documentation consistent therewithIn addition, within such sixty (60) day periodeach Seller agrees that, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16. (c) Subject to Section 5.16(b), in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, period commencing on the date of this Agreement and ending on the second (ii2nd) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of such time), then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing that the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following the closing of such Seller Acquisition (but in any event within eighteen (18) months anniversary of the closing of such Seller Acquisition)Closing Date, Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer it nor any of its Subsidiaries shall have solicit for employment any claim whatsoever against Sellerperson who is an employee of the Company, any the Company Subsidiary or the Purchased Business, unless such person's employment has been terminated for a period of its Subsidiaries at least six (6) months; provided, however, that non-directed newspaper or any of their respective Representativesinternet help wanted advertisements shall not be considered solicitations under this Section 5.18(b). Notwithstanding the foregoing, arising out of or relating to any such divestiture (other than this Section 5.18(b) shall not apply with respect to the express obligations set forth Company Employees listed on Exhibit E. (c) Sellers expressly acknowledge and agree that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area. If, at the time of enforcement of any provision of this Section 5.18, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under the circumstances then existing, Purchaser and pursuant Sellers hereby agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Sellers also hereby agree that money damages would not be an adequate remedy for any breach of this Section 5.18. Therefore, in the event of a writtenbreach or threatened breach of this Section 5.18, definitivePurchaser or its successors or assigns may, executed in addition to other rights and binding agreementremedies existing in their favor, if any, executed by obtain from any court of competent jurisdiction specific performance or injunctive or other equitable relief in order to enforce or prevent any violations of the Parties in connection with such divestitureprovisions hereof (without posting a bond or other security).

Appears in 1 contract

Samples: Stock Sale Agreement (Lightbridge Inc)

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Noncompetition; Non-solicitation. (a) During Subject to the provisions of Section 6.3(b), as a part of the inducement to Buyer to enter into this Agreement, each of Seller and Mx. Xxxxxxxxxx (each, a “Restricted Party” and together the “Restricted Parties”) hereby agrees that for a period commencing on the Closing Date of four (4) years from and ending on the five (5) year anniversary of after the Closing Date (the “Restricted Period”), Seller the Restricted Party shall not, and shall cause its Subsidiaries each Restricted Affiliate not to, provide ECR Services to ECR Clients for ECR Projects (without the prior written consent of Buyer, directly or indirectly, serve as an officer, director, or partner or member of, or be employed by or serve as a “Competing Activity”); providedconsultant with, that notwithstanding the foregoing neither Seller nor any of its Subsidiaries shall be precluded or have an equity or equity-like interest in, or otherwise restricted from: own, manage, operate or control, directly or indirectly, any business, firm, entity or other Person which is engaged anywhere in the world in providing consulting and/or engineering services to customers in the United States related to the conversion of motor vehicle engines to alternative fuels or in any other business that the Company was engaged in at any time during the twelve (i12) providing ECR Services on ECR Projects as necessary to (A) avoid breach of any Contract to which Seller or any of its Subsidiaries is a party as of the Closing, or (B) transition personnel of Seller or any of its Subsidiaries to non-ECR Projects, in each case, for up to one (1) year following months preceding the Closing Date or for which the Company has or had under design, development or consideration during such longer periods as may permitted by the Transition Services Agreement; twelve (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) 12)-month period; provided, however, Restricted Parties shall not be prohibited from engaging in activities involving high performance racing applications with 85% or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all or any portion of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects)greater ethanol engines. (b) For the avoidance of doubt, in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during During the Restricted Period, each Restricted Party shall not, directly or indirectly, and shall cause each Restricted Affiliate not to (i) induce or attempt to induce any employee of the Company on the Closing Date who is hired by Buyer or any Buyer Affiliate to leave the employ of Buyer or such Buyer Affiliate, or in any way interfere with the relationship between any such employee and the Buyer or such Buyer Affiliate, (ii) hire directly or through an entity any Person who was an employee of the Company on the Closing Date (except, in the case of clauses (i) and (ii) the Personof this Section 6.3(b), assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment employee who was involuntarily discharged by Buyer to Seller), and on the same terms agreed, by Seller or any of its Subsidiaries therefor (in each case as reflected in Buyer Affiliate on or after the definitive documentation signed by the parties to effect such Seller Acquisition, excluding Closing Date for any reason other than for the avoidance violation of doubt any non-competition, non-disclosure or other restrictive covenants with Buyer or similar terms personal to the seller of such Person, assets or businessa Buyer Affiliate). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Seller’s offer. Such offer shall remain open for a period of sixty (60) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16. (c) Subject During the Restricted Period, the Restricted Party agrees that it will not, and it will cause the Restricted Affiliates not to, induce or attempt to induce any customer or supplier of the Company on the Closing Date to cease doing business with the Company and/or Buyer, or in any way interfere with the relationship between any such customer or supplier and the Company and/or Buyer. (d) Each of the Restricted Parties agrees not to disclose any Confidential Information to any Person or use any Confidential Information in any manner; provided, however, it shall not be a breach of this subsection (d) for a Restricted Party to provide a copy of this Section 5.16(b6.3 and of the definitions of the terms referred to in this Section 6.3 to such Restricted Party’s attorneys, accountants, financial advisors or prospective employers. (e) Each Restricted Party acknowledges that any breach of the provisions of this Section 6.3 by any Restricted Party will result in irreparable injury to Buyer and the Company (following the consummation of the Contemplated Transactions), and that Buyer’s remedies at law would be inadequate and insufficient. Accordingly, in the event (i) Seller of any such breach of any of the provisions of this Section 6.3, Buyer shall be entitled to preliminary and/or permanent injunctive relief, in addition to all such other legal and equitable remedies as may be available to Buyer therefor. In the event any of the provisions of this Section 6.3 are determined by a court of competent jurisdiction to be contrary to any applicable law, or for any reason to be unenforceable or invalid as written, the parties acknowledge that such court, if permitted by applicable law, shall modify any of such provisions so as to permit enforcement thereof as so modified. If a Restricted Party is finally determined by any court of competent jurisdiction to have violated any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period or (B) generated Competing Acquisition Revenues in excess of $400,000,000 (either alone or when combined with the Competing Acquisition Revenues applicable to the portion of any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of such time)obligations under this Section 6.3, then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing time period hereunder shall be extended with respect to that Restricted Party by the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following equal to that period beginning when the closing of activities constituting such Seller Acquisition (but in any event within eighteen (18) months of violation commenced and ending when the closing of activities constituting such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestiture)violation terminated.

Appears in 1 contract

Samples: Equity Purchase Agreement (Fuel Systems Solutions, Inc.)

Noncompetition; Non-solicitation. (a) During In consideration of the payments described in Section 1.2 of this Agreement, Sellers agree that, during the period commencing on the Closing Date and ending on the five earlier of (5i) year the third (3rd) anniversary of the Closing Date and (ii) the “Restricted Period”consummation of a Parent Change of Control, neither Sellers nor any of their Subsidiaries shall, directly or indirectly, (A) establish or enter into, advise, consult with or become an owner in part of, any Person that engages in any business, or in any way engage in any business (either as principal or as a shareholder, owner, partner, joint venturer, consultant, advisor or representative of any Person), that competes with the Purchased Business, or (B) solicit any Person that is a customer of or vendor to the Company or the Company Subsidiary (other than through general advertising) in a manner that is reasonably likely to cause such Person to reduce its business transactions with the Company or the Company Subsidiary or otherwise adversely interfere with the conduct of the Purchased Business. It is understood and agreed that the passive ownership of not more than five percent (5%) of the stock or other equity interests of a public company shall not constitute a violation of this Section 5.18(a). (b) Each Seller shall notagrees that, during the period commencing on the date of this Agreement and shall cause its Subsidiaries not toending on the first (1st) anniversary of the Closing Date, provide ECR Services to ECR Clients for ECR Projects (a “Competing Activity”); provided, that notwithstanding the foregoing neither Seller it nor any of its Subsidiaries shall be precluded solicit for employment or otherwise restricted from: employ (iexcept as a Company Employee) providing ECR Services on ECR Projects as necessary to (A) avoid breach of any Contract to which Seller or any of its Subsidiaries person who is a party as an employee of the ClosingCompany, the Company Subsidiary or (B) transition personnel of Seller or any of its Subsidiaries to non-ECR Projectsthe Purchased Business, in each case, for up to one (1) year following the Closing Date or for unless such longer periods as may permitted by the Transition Services Agreement; (ii) providing ECR Services using its Retained Assets (such as the Specialized Manufacturing Business) or as may be expressly permitted pursuant to any Transaction Document; (iii) subject to the provisions of Section 5.16(b) and Section 5.16(c), acquiring (whether by merger, consolidation, acquisition of stock or assets, license or otherwise) all or any portion of any Person (whether or not such Person is engaged in any Competing Activity, a “Seller Acquisition”) and continuing to operate such Person in the ordinary course; (iv) de minimis ECR Services for ECR Projects; or (v) providing non-ECR Services (whether to ECR Clients or otherwise) or participating in or working on non-ECR Projects (including, but not limited to, buildings, civil works, water projects, environmental projects, utility projects and data center projects). (b) For the avoidance of doubt, in the event (i) Seller or any of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets or business acquired pursuant thereto generated Competing Acquisition Revenues between $100,000,000 and $400,000,000, then within ninety (90) days following the closing of such Seller Acquisition, Seller shall deliver to Buyer a written offer to sell to Buyer the portion of such Person, assets or business engaged primarily in a Competing Activity at the same multiple of earnings paid (increased by the cash tax liability of Seller and its Subsidiaries resulting from such sale and any associated payment by Buyer to Seller), and on the same terms agreed, by Seller or any of its Subsidiaries therefor (in each case as reflected in the definitive documentation signed by the parties to effect such Seller Acquisition, excluding for the avoidance of doubt any restrictive covenants or similar terms personal to the seller of such Person, assets or business). Seller shall include with such offer copies of the definitive documentation signed by the parties to effect such Seller Acquisition sufficient to permit Buyer to confirm the price (including multiple of earnings) and other terms set forth in Sellerperson’s offer. Such offer shall remain open employment has been terminated for a period of sixty at least six (606) days from Buyer’s receipt thereof. If Buyer fails to accept such offer and execute definitive documentation consistent therewith, within such sixty (60) day period, then, subject to the terms of Section 5.16(c) Seller or its applicable Subsidiaries shall be entitled to retain and operate such Person, assets or business in its sole discretion and any such retention or operation shall not be deemed to violate, or be taken into account in assessing any breach of, this Section 5.16months. (c) Subject Sellers expressly acknowledge and agree that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area. If, at the time of enforcement of any provision of this Section 5.16(b)5.18, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under the circumstances then existing, Purchaser and Sellers hereby agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Sellers also hereby agree that money damages would not be an adequate remedy for any breach of this Section 5.18. Therefore, in the event (i) Seller of a breach or threatened breach of this Section 5.18, Purchaser or its successors or assigns may, in addition to other rights and remedies existing in their favor, obtain from any court of its Subsidiaries undertakes a Seller Acquisition during the Restricted Period, and (ii) the Person, assets competent jurisdiction specific performance or business acquired pursuant thereto either (A) generated Competing Acquisition Revenues which represented more than 20% of its aggregate revenues for the same prior year fiscal period injunctive or (B) generated Competing Acquisition Revenues other equitable relief in excess of $400,000,000 (either alone order to enforce or when combined with the Competing Acquisition Revenues applicable to the portion of prevent any prior Seller Acquisition retained by Seller or any of its Subsidiaries as of such time), then (1) Seller shall, promptly after the closing of such Seller Acquisition, notify Buyer in writing that the threshold set forth in clause (A) or (B) has been exceeded, and (2) within a reasonable period of time following the closing of such Seller Acquisition (but in any event within eighteen (18) months violations of the closing of such Seller Acquisition), Seller and its Subsidiaries shall divest the portion of such acquired Person, assets provisions hereof (without posting a bond or business engaged primarily in a Competing Activity (a “Threshold ECR Business”). In connection with Seller’s process to undertake such divestiture, Seller shall promptly notify Buyer in writing (provided that Seller shall have no obligation to notify Buyer in advance of notice to any other potential buyer) of such divestiture process and allow Buyer the same time to review the potential transaction and to make a proposal to acquire the Threshold ECR Business as other bidders in the process in connection therewith. The Parties acknowledge and agree that Seller and its Subsidiaries shall have the right, in their sole discretion, to reject any and all proposals made by Buyer or any of Buyer’s Subsidiaries with regard to any such divestiture, and to terminate discussions and negotiations with Buyer at any time. The Parties also agree that (I) Seller and its Subsidiaries shall be free to conduct any process with respect to such divestiture as Seller and its Subsidiaries in their sole discretion shall determine (including, without limitation, by negotiating with any prospective party and entering into a definitive written agreement without prior notice to Buyer, its Subsidiaries or any other Person other than the initial notice of the process required by this Section 5.16(c)), (II) any procedures relating to such divestiture (other than those specified in this Section 5.16(c)) may be changed at any time without notice to Buyer, its Subsidiaries or any other Person, and (III) neither Buyer nor any of its Subsidiaries shall have any claim whatsoever against Seller, any of its Subsidiaries or any of their respective Representatives, arising out of or relating to any such divestiture (other than with respect to the express obligations set forth herein and pursuant to a written, definitive, executed and binding agreement, if any, executed by the Parties in connection with such divestituresecurity).

Appears in 1 contract

Samples: Stock Sale Agreement (Infospace Inc)

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