15.   Commitments and Contingencies

Contingencies

Litigation

From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. The Company records liabilities for contingencies including legal costs when it is probable that a liability has been incurred and when the amount can be reasonably estimated. Legal costs are expensed as incurred. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material effect on the Company’s business, financial condition, results of operations or cash flows.

As of the date hereof, two complaints have been filed by purported Company stockholders related to the Merger (the “Complaints”). As of the date hereof, none of the defendants named in the Complaints has been served. The Complaints assert claims for, among other things, purported disclosure deficiencies in the Definitive Proxy Statement on Schedule 14A (as further described herein). The Complaints seek, among other relief, (i) injunctive relief preventing the closing of the Merger until defendants issue purportedly complete disclosures regarding the Merger, (ii) rescission of the Merger and/or actual and punitive damages in the event the Merger is consummated, (iii) attorneys’ and experts’ fees and expenses, and (iv) such other and further relief that the court may find just and proper. If any additional complaints are filed, the Company and/or Parent will not necessarily disclose such complaints. The Company does not believe it is necessary to record a litigation accrual at this time, as a loss is not determined to be probable.

Pending Merger

The Merger Agreement contains certain customary termination rights for the Company, on the one hand, and Parent, on the other hand, including that, subject to certain limitations, the Company or Parent may terminate the Merger Agreement if (i) the Merger is not consummated by 11:59 p.m. (New York City Time), on May 6, 2027 (the “Initial Termination Date”), which Initial Termination (x) will be automatically extended until 11:59 p.m. (New York City Time) on August 6, 2027 if certain of the conditions to the Merger have been satisfied as of the Initial Termination Date and (y) may be extended by Parent on one occasion if the marketing period has commenced but has not been completed on the third Business day immediately prior to the then-scheduled termination date; and (ii) any order prohibiting the Merger has become final and non-appealable; or (iii) the approval by the Company’s stockholders is not obtained at the special meeting of the Company’s stockholders. Subject to certain specified limitations and requirements set forth in the Merger Agreement, Parent may terminate the Merger Agreement if the Board issues an Adverse Recommendation Change, and the Company may terminate the Merger Agreement if, prior to the receipt of the approval of the Company’s stockholders, the Board authorizes the Company to enter into a definitive agreement providing for a Superior Proposal (as defined in the Merger Agreement) and the Company enters into such definitive agreement, or if Parent fails to consummate the Merger when required to do so under the Merger Agreement. The Company and Parent may also terminate the Merger Agreement by mutual written consent or for any material, uncured breach by the other party. Upon termination of the Merger Agreement under certain specified circumstances, the Company will be required to pay to Parent a termination fee of $60.0 million and under certain other circumstances, Parent will be required to pay the Company a termination fee of $144.0 million.