At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary or desirable, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the merger, and notwithstanding the termination of the waiting period under the HSR Act, any state could take such action under its antitrust laws as it deems necessary or desirable. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of Sumo Logic or Parent. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.
Subject to the terms of the merger agreement, each of Parent and Merger Sub (and their respective controlled affiliates, if applicable) agreed to, if and to the extent necessary to obtain clearance of the merger pursuant to the HSR Act and any other antitrust laws or specified foreign direct investment laws applicable to the merger, promptly take any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals, and waivers under antitrust laws or specified foreign direct investment laws (that may be required by any governmental authority, so as to enable to parties to consummate the merger as soon as reasonably practicable); including (1) offering, negotiating, committing to or effecting, by settlement, consent decree, hold separate order, stipulation, or otherwise (a) the sale, divestiture, license, or other disposition, of any and all of the capital stock or other equity or voting interests, assets (whether tangible or intangible), rights, properties, products or business of Parent and Merger Sub and their respective controlled affiliates, if applicable, on the one hand, and Sumo Logic on the other hand; (b) the termination, modification, or assignment of existing relationships, joint ventures, contracts, or obligations of Parent and Merger Sub, and their respective controlled affiliates, if applicable, on the one hand, or Sumo Logic and its controlled affiliates on the other hand; (c) committing to behavioral or other operational conditions and any other modifications of, or restrictions on the businesses, assets, priorities, product lines, equity interest, or other activities of Parent and Merger Sub and their respective subsidiaries, if applicable, on the one hand, and Sumo Logic and its controlled affiliates on the other hand; and (2) contesting, defending, and appealing any pending or threatened legal proceeding challenging the merger agreement or the consummation of the merger and to have vacated, lifted, reversed, or overturned any order, whether temporary, preliminary, or permanent, that prohibits, prevents, or restricts the consummation of the merger.
One or more governmental bodies may impose a condition, restriction, qualification, requirement, or limitation when it grants the necessary approvals and consents to the merger. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained, and there may be a substantial period of time between the approval by Sumo Logic’s stockholders and the completion of the merger.
Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be obtained in a timely manner, obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the merger not being satisfied.
The transactions contemplated by the merger agreement, including the payment of consideration due to Sumo Logic’s stockholders, holders of Sumo Logic warrants, and the holders of other equity-based interests under the merger agreement, will be funded with the proceeds of committed equity financing and Sumo Logic’s cash on hand at the closing, as further described below.
Pursuant to the equity commitment letter, the Guarantors have committed to capitalize Parent on the closing on the terms and subject to the conditions set forth in the equity commitment letter.
In connection with entering into the merger agreement, on February 9, 2023, following approval thereof by the Sumo Logic Board, Sumo Logic’s directors, solely in their capacities as stockholders of Sumo Logic (which we refer to as the “voting agreement stockholders”), entered into the voting agreements with Parent and Sumo Logic. The voting agreements cover approximately [•] percent of the number of shares of Sumo Logic’s common stock issued and outstanding as of the record date.