FR EA

Contract analysis

Clause-by-clause risk read on any document of the firm. Pick a contract, or open any document from a matter.

Contract analysis / standstill-settlement-agreement-v2-redline.docx
standstill-settlement-agreement-v2-redline.docx
1038-00006 · 46 clauses
High · 4 Medium · 9 Standard · 5
Section 1.1 Defined Terms. High
⚑ Non-compete / exclusivity restraint
Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement. "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with such Person. F
Section 1.2 Rules of Construction.
Section 1.2 Rules of Construction. Unless the context otherwise requires, the following rules of construction shall apply to this Agreement: (a) The headings of the Articles, Sections, and subsections of this Agreement are for convenience of reference only and shall not affect the interpretation or construction of this Agreement. (b) The words "include," "includes," and "including" shall be deemed to be followed by t
ARTICLE II
ARTICLE II STANDSTILL AND CESSATION OF HOSTILITIES
Section 2.1 Standstill Obligations.
Section 2.1 Standstill Obligations. From and after the Effective Date through the later of: (a) the date on which all Modified Restrictive Covenant Obligations have expired in accordance with their terms, or (b) the expiration of the Monitor Period, the Parties agree to maintain the standstill as set forth herein and shall refrain from initiating, prosecuting, or maintaining any new proceedings, actions, claims, coun
Section 2.2 Withdrawal and Dismissal of Claims.
Section 2.2 Withdrawal and Dismissal of Claims. Within five (5) business days of entry of the Consent Order by the Court, CRH shall file a Stipulation for Dismissal with Prejudice of all claims asserted in the Litigation; provided, however, that such dismissal shall be contingent upon full compliance by the Individual Defendants and Verdana with the terms and conditions of this Agreement and the Consent Order during
Section 2.3 Dissolution of TRO.
Section 2.3 Dissolution of TRO. Concurrently with the filing of the Consent Order pursuant to Article X, CRH shall file a motion with the Court to dissolve the TRO entered on March 7, 2025. Upon entry of the Consent Order, the Modified Restrictive Covenant Obligations incorporated therein shall supersede and replace the injunctive provisions of the TRO. The Parties shall cooperate in the preparation and filing of any
Section 2.4 Release of Injunction Bond. Standard
⚑ Commercial term
Section 2.4 Release of Injunction Bond. Upon entry of the Consent Order and dissolution of the TRO, CRH shall all papers and take all steps necessary to request the discharge and exoneration of the injunction bond posted in connection with the TRO (Bond No. BSC-2025-TRO-04419, in the principal amount of $2,500,000, issued by Broadview Surety Corp.), including the filing of any motion or application with the Court req
Section 2.5 Retained Jurisdiction.
Section 2.5 Retained Jurisdiction. The Parties hereby consent to the Court of Chancery retaining jurisdiction over the Parties and the subject matter of this Agreement for purposes of enforcing the terms of the Consent Order, including, without limitation, the Modified Restrictive Covenant Obligations, the Data Destruction Protocol, the Compliance Monitor framework set forth in Article VII, and any other obligations
ARTICLE III
ARTICLE III MODIFIED RESTRICTIVE COVENANT OBLIGATIONS
Section 3.1 Modified Non-Competition Obligations. High
⚑ Non-compete / exclusivity restraint
Section 3.1 Modified Non-Competition Obligations. (a) Rathore Non-Compete. Rathore acknowledges and agrees that she shall be subject to a non-competition restriction commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on February 6, 2026 (the "Rathore Non-Compete Period"), a period of twelve (12) months. During the Rathore Non-Compete Period, Rathore shall not, directly or in
Section 3.2 Modified Non-Solicitation Obligations (Employees). Medium
⚑ Liability cap to check against exposure
Section 3.2 Modified Non-Solicitation Obligations (Employees). Each Individual Defendant acknowledges and agrees that, for a period of eighteen (18) months commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on August 6, 2026, he or she shall not, directly or indirectly, solicit, recruit, encourage, induce, or attempt to solicit, recruit, encourage, or induce any employee of
Section 3.3 Modified Non-Solicitation Obligations (Vendors).
Section 3.3 Modified Non-Solicitation Obligations (Vendors). Each Individual Defendant acknowledges and agrees that, for a period of twelve (12) months commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on February 6, 2026, he or she shall not, directly or indirectly, solicit, induce, encourage, or attempt to solicit, induce, or encourage any of CRH's Top 50 Vendors (as iden
Section 3.4 Continuing Confidentiality Obligations. Medium
⚑ Confidentiality undertaking
Section 3.4 Continuing Confidentiality Obligations. The perpetual confidentiality obligations contained in each Individual Defendant's Employment Agreement shall remain in full force and effect and are not modified, limited, or otherwise affected by this Agreement. Each Individual Defendant hereby reaffirms and acknowledges his or her continuing obligations under such confidentiality provisions, including, without li
Section 3.5 Verdana Acknowledgment and Compliance.
Section 3.5 Verdana Acknowledgment and Compliance. Verdana acknowledges the Modified Restrictive Covenant Obligations applicable to each Individual Defendant as set forth in this Article III and agrees to take steps to ensure compliance by each Individual Defendant during his or her employment with Verdana, including, without limitation: (a) implementing and maintaining organizational separation measures (commonly re
Section 3.6 Detailed Terms.
Section 3.6 Detailed Terms. The detailed terms of the Modified Restrictive Covenant Obligations, including specific definitions of the Restricted Categories, the geographic scope, the applicable time periods, and the activities that are permitted and prohibited during the restricted periods, are set forth in Exhibit A attached hereto and incorporated herein by reference. In the event of any inconsistency between the
Section 4.1 Settlement Payment.
Section 4.1 Settlement Payment. Verdana shall pay to CRH the sum of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (the "Settlement Payment") in immediately available funds, by wire transfer to a bank account designated by CRH in accordance with Section 4.7, within thirty (30) calendar days of the Effective Date. The Settlement Payment represents a negotiated lump-sum payment in full and final resolu
Section 4.2 Litigation Cost Reimbursement. Standard
⚑ Commercial term
Section 4.2 Litigation Cost Reimbursement. In addition to the Settlement Payment, Verdana shall reimburse CRH in the amount of Four Hundred Twenty-Five Thousand Dollars ($425,000) toward CRH's litigation costs and expenses incurred in connection with the Litigation (the "Cost Reimbursement"), payable within thirty (30) calendar days of the Effective Date by wire transfer to the same account designated by CRH under Se
Section 4.3 Equity Forfeitures — Rathore.
Section 4.3 Equity Forfeitures — Rathore. (a) Rathore agrees to forfeit, effective as of the Effective Date, one hundred percent (100%) of her unvested CRH RSU awards, valued at approximately One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250). Such unvested RSUs represent twenty-five percent (25%) of the aggregate RSU grant of Seven Hundred Twenty-Five Thousand Dollars ($725,000) made to Rathore on
Section 4.4 Equity Forfeitures — Other Individual Defendants. Standard
⚑ Commercial term
Section 4.4 Equity Forfeitures — Other Individual Defendants. (a) Each of Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson agrees to forfeit, effective as of the Effective Date, unvested CRH Equity Awards on a pro rata basis, with the aggregate forfeitures of all seven Individual Defendants totaling approximately Four Hundred Eighty-Seven Thousand Dollars ($487,000). The individual forfeiture a
Section 4.5 Total Economic Value.
Section 4.5 Total Economic Value. The Parties acknowledge that the the following components:
Section 4.6 No Additional Fees or Costs. Standard
⚑ Commercial term
Section 4.6 No Additional Fees or Costs. Except as expressly provided in Section 4.2 (Cost Reimbursement), Article VII (regarding Compliance Monitor costs), and Article V (regarding the Verdana Forensic Audit), each Party shall bear its own attorneys' fees, costs, and expenses incurred in connection with the Litigation, the mediation before the Honorable Philip Ashford (Ret.), the negotiation, preparation, and execut
Section 4.7 Wire Transfer Instructions.
Section 4.7 Wire Transfer Instructions. CRH shall provide Verdana with complete and accurate wire transfer instructions for the designated receiving account within five (5) business days of the Effective Date. Verdana shall have no obligation to make any payment under this Article IV until it has received such wire transfer instructions in writing from CRH or its counsel, Calderwood & Harkness LLP.
Section 4.8 Late Payment. Medium
⚑ Forum / governing law
Section 4.8 Late Payment. Any amount due under this Article IV that is not paid when due shall accrue interest from the due date until paid in full at a rate per annum equal to the prime rate as published in The Wall Street Journal on the date such payment was due, plus two percent (2%), calculated on the basis of a 365-day year and the actual number of days elapsed. The accrual of interest under this Section 4.8 sha
ARTICLE V
ARTICLE V DATA RETURN, DESTRUCTION, AND FORENSIC AUDIT
Section 5.1 Data Return and Destruction Obligation. Medium
⚑ Liability cap to check against exposure
Section 5.1 Data Return and Destruction Obligation. Within ten (10) business days of the Effective Date, each Individual Defendant shall return to CRH, or certify in writing the complete and permanent destruction of, all Exfiltrated Data and any other Confidential Information of CRH in such Individual Defendant's possession, custody, or control, whether in physical or electronic form, wherever located. Without limiti
Section 5.2 Certification of Destruction. High
⚑ Penalty / liquidated damages
Section 5.2 Certification of Destruction. Within the same ten (10)-business-day period specified in Section 5.1, each Individual Defendant shall deliver to CRH a sworn certification, executed under penalty of perjury, substantially in the form set forth in Exhibit B, attesting that: (i) all Exfiltrated Data and Confidential Information of CRH in such Individual Defendant's possession, custody, or control has been ret
Section 5.3 Verdana Forensic Audit. Medium
⚑ Liability cap to check against exposure
Section 5.3 Verdana Forensic Audit. (a) Verdana shall permit the Forensic Auditor, Pinnacle Forensics LLC (engagement lead: Dr. Rajiv Anand), to conduct an independent forensic audit of Verdana's information systems, network infrastructure, endpoint devices, cloud storage environments, email systems, collaboration platforms, and any other storage media to confirm that no Exfiltrated Data or CRH Confidential Informati
Section 5.4 Verdana's Independent Obligation. Medium
⚑ Confidentiality undertaking
Section 5.4 Verdana's Independent Obligation. Verdana represents and warrants that, as of the Effective Date, , distributed, incorporated, or relied upon any Exfiltrated Data or CRH Confidential Information in its operations, strategic planning, vendor negotiations, product development, merchandising decisions, or any other business activities or decisions. From and after the Effective Date, Verdana shall take steps
Section 5.5 Consequences of Non-Compliance.
Section 5.5 Consequences of Non-Compliance. Failure by any Individual Defendant or Verdana to comply with the data return and destruction obligations set forth in this Article V shall constitute a material breach of this Agreement. Upon any such breach, CRH shall be entitled, without prejudice to any other remedies available at law or in equity, to seek enforcement of the data return and destruction obligations throu
Section 5.6 Detailed Protocol. Medium
⚑ Confidentiality undertaking
Section 5.6 Detailed Protocol. The detailed Data Destruction Protocol, including the step-by-step procedures for the return or certified destruction of Exfiltrated Data and Confidential Information, the form of the sworn certification of destruction, the verification procedures to be conducted by the Forensic Auditor, and the mechanics of the Verdana Forensic Audit, is set forth in Exhibit B attached hereto and incor
Section 6.1 CRH Release of Individual Defendants. Medium
⚑ Confidentiality undertaking
Section 6.1 CRH Release of Individual Defendants. Effective upon the satisfaction of all of the following conditions: (a) receipt by CRH of the Settlement Payment and Cost Reimbursement in full; (b) effectuation of all equity forfeitures described in Sections 4.3 and 4.4, including execution of all necessary documentation and cooperation with Northland Trust Company; (c) completion of the Data Destruction Protocol, i
Section 6.2 CRH Release of Verdana.
Section 6.2 CRH Release of Verdana. Effective upon the satisfaction of the Release Conditions, CRH, on behalf of itself and its Affiliates, subsidiaries, officers, directors, employees, agents, successors, assigns, and representatives, hereby releases, acquits, and forever discharges Verdana and its Affiliates, subsidiaries, officers, directors, employees, agents, successors, assigns, and representatives from any and
Section 6.3 Individual Defendants' Release of CRH.
Section 6.3 Individual Defendants' Release of CRH. Effective upon the satisfaction of the Release Conditions, each Individual Defendant, on behalf of himself or herself and his or her respective heirs, executors, administrators, legal representatives, successors, and assigns, hereby releases, acquits, and forever discharges CRH and its Affiliates, subsidiaries, officers, directors, employees, agents, successors, assi
Section 6.4 Verdana Release of CRH.
Section 6.4 Verdana Release of CRH. Effective upon the satisfaction of the Release Conditions, Verdana, on behalf of itself and its Affiliates, subsidiaries, officers, directors, employees, agents, successors, assigns, and representatives, hereby releases, acquits, and forever discharges CRH and its Affiliates, subsidiaries, officers, directors, employees, agents, successors, assigns, and representatives from any and
Section 6.5 Reservation of Rights.
Section 6.5 Reservation of Rights. Notwithstanding the releases set forth in Sections 6.1 through 6.4, each Party expressly reserves all rights, remedies, and causes of action arising from or related to the enforcement of this Agreement, the Consent Order, and the Modified Restrictive Covenant Obligations. Nothing in this Article VI shall be construed to limit, impair, or waive any Party's right to seek enforcement o
Section 6.6 No Release of Greystone.
Section 6.6 No Release of Greystone. For the avoidance of doubt, this Agreement does not release or affect any claims that CRH may have, or may in the future assert, against Greystone Capital Partners, LP or Greystone Capital Fund VII, LP, whether arising from the facts alleged in the Litigation or otherwise; provided, however, that CRH agrees and covenants that it shall not initiate, pursue, or maintain any claim, a
ARTICLE VII
ARTICLE VII COMPLIANCE MONITOR
Section 7.1 Appointment of Compliance Monitor.
Section 7.1 Appointment of Compliance Monitor. The Parties agree to the appointment of Aldwyn Compliance Solutions LLC, a Delaware limited liability company, with offices at 1700 Market Street, Suite 2800, Philadelphia, PA 19103, as the independent compliance monitor for the duration of the Monitor Period (twelve (12) months commencing on the Effective Date and ending on the first anniversary of the Effective Date).
Section 7.2 Scope of Monitoring. High
⚑ Non-compete / exclusivity restraint
Section 7.2 Scope of Monitoring. The Compliance Monitor shall be responsible for verifying adherence by the Individual Defendants and Verdana to the following obligations: (a) the Modified Non-Compete Obligations set forth in Section 3.1, including verification that each Individual Defendant is not performing services, providing guidance, or having involvement in the Restricted Categories during the applicable restri
Section 7.3 Access and Cooperation. Medium
⚑ Confidentiality undertaking
Section 7.3 Access and Cooperation. (a) Each Individual Defendant and Verdana shall cooperate fully with the Compliance Monitor in connection with its monitoring activities, including, without limitation, providing: (i) access to organizational charts, reporting structures, and job descriptions for the Individual Defendants; (ii) access to internal communications, meeting schedules, and project assignments of the Ind
Section 7.4 Costs. Standard
⚑ Commercial term
Section 7.4 Costs. The estimated total cost of the Compliance Monitor for the twelve (12)-month Monitor Period is Three Hundred Sixty Thousand Dollars ($360,000). Such costs shall be allocated as follows: Verdana shall bear sixty percent (60%) of the total costs, in the amount of Two Hundred Sixteen Thousand Dollars ($216,000), and CRH shall bear forty percent (40%) of the total costs, in the amount of One Hundred Fo
Section 7.5 Reports and Findings.
Section 7.5 Reports and Findings. (a) The Compliance Monitor shall deliver quarterly written reports to counsel for each Party: Calderwood & Harkness LLP (on behalf of CRH); Whitfield, Nygaard & Doyle LLP (on behalf of the Individual Defendants); and Blackhall & Soren LLP (on behalf of Verdana). Each quarterly report shall summarize the Compliance Monitor's monitoring activities during the applicable period, its find
Section 7.6 Independence.
Section 7.6 Independence. The Compliance Monitor shall act independently and shall not serve as the agent, representative, advocate, or advisor of any Party. The Compliance Monitor shall exercise its professional judgment in carrying out its monitoring activities and shall not be subject to the direction or control of any Party with respect to its findings, conclusions, or recommendations. No Party shall attempt to i
Section 7.7 Termination of Monitor.
Section 7.7 Termination of Monitor. The Compliance Monitor's engagement shall terminate upon the expiration of the Monitor Period, unless: (a) a compliance violation has been identified by the Compliance Monitor in a Potential Violation Notice or quarterly report and remains unresolved at the expiration of the Monitor Period, in which case the Compliance Monitor's engagement shall continue until such violation has be
ARTICLE VIII
ARTICLE VIII MUTUAL NON-DISPARAGEMENT
Section 8.1 Non-Disparagement Obligations.
Section 8.1 Non-Disparagement Obligations. Each Party agrees that it shall not, and shall ca