Item 1.01 Entry into a Material Definitive Agreement
On
The Purchase Agreement includes customary representations and warranties, as well as certain covenants, including, among other things, that: (i) Sellers will operate the Business in the ordinary course of business consistent with past practice, (ii) the retention by Purchaser of certain employees of the Business, (iii) the Purchaser shall reimburse the Sellers for sales commissions paid to ongoing employees of the Sellers for new bookings related to the Business, (iv) the Sellers shall use commercially reasonable efforts to seek and obtain all approvals, consents, waivers or other authorizations that may be necessary in connection with the transfer of the Business, (v) the Sellers shall use commercially reasonable efforts to enter into a standalone contract or otherwise bifurcate any contracts of the Business that will overlap with the ongoing business of the Sellers, (vi) the Sellers will abide by certain exclusivity and non-competition covenants and (vi) the Sellers will abide by a non-solicitation covenant. The Asset Purchase is anticipated to close in the first quarter of calendar year 2022.
The consummation of the transactions contemplated by the Purchase Agreement (the "Closing") is subject to customary conditions, including, among other things, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other closing conditions, such as the accuracy of representations and warranties, material performance of covenants, and no occurrence of a material adverse effect. The Purchase Agreement contains indemnification rights for each of the Sellers and the Purchaser subject to customary deductibles, caps, and other limitations.
The Company's board of directors has approved the Asset Purchase. The Purchaser's board of directors has similarly approved the Asset Purchase.
The Purchase Agreement contemplates the execution of certain ancillary agreements between Sellers and the Purchaser (or their respective affiliates), including (i) a Transition Services Agreement, pursuant to which the Sellers are required to provide certain services to the Purchaser related to the operations of the Business for a limited transition period, including data export services, customer support and ticketing, sales support, order management and provisions systems, network management and monitoring, facilities management and monitoring, power monitoring and reporting, information technology systems services, assist with audit compliance, billing and collection, general accounting, management and payment of accounts payable, and payroll and benefits services, and (ii) a Long-Term Services Agreement, pursuant to which the Sellers are required to provide certain services to the Purchaser related to the operations of the Business until the expiration of the Lease (as defined below), including services related to the fire service room in premises governed by the Lease, maintenance of the power generator and corresponding switch distribution equipment, and providing perimeter security services. In connection with the Asset Purchase, CONE will enter into a lease agreement (the "Lease") for two of the properties related to the Business, for periods of seven and eight years, respectively, in each case subject to extensions.
The above description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which will be attached as an exhibit to a future filing of the Company.
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Cautionary Statement Regarding Forward-Looking Statements
The information included herein, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions.
You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.
The following factors, among others, could cause actual results and future
events to differ materially from those set forth or contemplated in the
forward-looking statements: (i) the Asset Purchase may not be completed in a
timely manner or at all, including the risk that any required regulatory
approvals are not obtained, are delayed or are subject to unanticipated
conditions that could adversely affect the Company or the expected benefits of
the Asset Purchase; (ii) the failure to realize the anticipated benefits of the
Asset Purchase; (iii) the possibility that any or all of the various conditions
to the consummation of the Asset Purchase may not be satisfied or waived,
including the failure to receive any required regulatory approvals from any
applicable governmental entities (or any conditions, limitations or restrictions
placed on such approvals); (iv) the effect of the announcement or pendency of
the Asset Purchase on the Company's ability to retain and hire key personnel,
its ability to maintain relationships with its customers, suppliers and others
with whom it does business, or its operating results and business generally;
(v) risks related to the Asset Purchase diverting management's attention from
the Company's ongoing business operations; (vi) risks related to the Company's
proposed merger with
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While forward-looking statements reflect the Company's good faith beliefs, they
are not guarantees of future performance. For a further discussion of these and
other factors that could impact the Company's future results, performance or
transactions, see Part I, Item 1A. "Risk Factors" of the Company's Annual Report
on Form 10-K for the year ended
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