CERTAIN INFORMATION INDICATED WITH [****] IN THIS DOCUMENT HAS BEEN OMITTED FROM THIS EXHIBIT AS NOT MATERIAL EQUITY PURCHASE AGREEMENT BY AND AMONG PDF SOLUTIONS, INC.,
Exhibit No. 2.1
CERTAIN INFORMATION INDICATED WITH [****] IN THIS DOCUMENT HAS BEEN OMITTED FROM THIS EXHIBIT AS NOT MATERIAL
BY AND AMONG
PDF SOLUTIONS, INC.,
SECUREWISE LLC
AND
TELIT IOT SOLUTIONS INC
DATED AS OF FEBRUARY 19, 2025
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- iii -
- iv -
Exhibits
Exhibit A Accounting Rules
Exhibit B Reference Closing Statement
Exhibit C Allocation Methodology
Schedules
Schedule ASeller Disclosure Schedule
Schedule BTransfer Form
Schedule CTSA
Schedule D Contracts to be Novated
Schedule EShared Contracts to be Separated
Schedule FContracts to be Assigned
Schedule G Form of Seller IP Assignment Agreement
THIS EQUITY PURCHASE AGREEMENT is entered into as of February 19, 2025 (this “Agreement”), by and among PDF Solutions, Inc., a Delaware corporation (“Purchaser”), located at ▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ – ▇▇▇, SecureWise LLC, a Delaware limited liability company (the “Target”), located at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ at Imperial Center, ▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ – ▇▇▇, and Telit IOT Solutions Inc., a Delaware corporation (“Seller”), located at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ at Imperial Center, ▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ - ▇▇▇. Purchaser, the Target and Seller shall each be referred to in this Agreement as a “Party”, and collectively as the “Parties”. Capitalized terms that are used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to such terms in Section 12.1.
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and outstanding membership interests (the “Membership Interests”) of the Target, which constitute all of the issued and outstanding Equity Securities of the Target; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Membership Interests, upon the terms and subject to the conditions set forth herein
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
any Estimated Indebtedness and (e) minus the amount of any Estimated Transaction Expenses (such resulting amount pursuant to Sections 1.2(a)-(e), the “Estimated Purchase Price” and, as such amount may be adjusted pursuant to the provisions of Section 1.4, the “Purchase Price”).
Except as set forth on the disclosure schedule delivered by Seller to Purchaser on the date hereof concurrently with entry into this Agreement (the “Seller Disclosure Schedule”) and
attached to this Agreement as Schedule A, each of Seller and Target hereby represents and warrants to Purchaser as follows:
Target or (ii) against the Target or against the Seller or any Seller Affiliate that would be material to the Business or the assets used or held for use in the Business.
liabilities of the Target, including contingent and other liabilities, and (ii) the amount that will be required to pay the probable liabilities of the Target on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) the Target will not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged, and (c) the Target will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of the foregoing, “not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due. The Transaction is not being made by Purchaser with the intent to hinder, delay or defraud any present or future creditors of Seller or the Target.
Except as set forth in Section 3.13 of the Seller Disclosure Schedule:
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS Article 3 OR Article 4 (EACH AS MODIFIED BY THE SELLER DISCLOSURE SCHEDULE), THE TARGET CLOSING CERTIFICATE and any other transaction agreement, NONE OF SELLER, the target OR ANY OTHER PERSON on behalf of Seller or the target MAKES, OR HAS BEEN AUTHORIZED BY SELLER, the target OR their AFFILIATES TO MAKE, ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE TARGET, THE MEMBERSHIP INTERESTS OR THE TRANSACTION, AND EACH OF SELLER AND THE TARGET DISCLAIMS ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY SELLER, ANY AFFILIATE OF SELLER, THE TARGET, ANY AFFILIATE OF THE TARGET OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES, AGENTS OR REPRESENTATIVES AND IF MADE, SUCH REPRESENTATION OR WARRANTY MAY NOT BE RELIED UPON BY PURCHASER OR ANY OF ITS AFFILIATES AND REPRESENTATIVES AS HAVING BEEN AUTHORIZED BY SELLER OR ANY OF ITS AFFILIATES. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS Article 3 OR Article 4 (AS MODIFIED BY THE SELLER DISCLOSURE SCHEDULE), THE TARGET CLOSING CERTIFICATE AND ANY OTHER TRANSACTION AGREEMENT, EACH OF SELLER AND THE TARGET HEREBY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, OPINION, PROJECTION, FORECAST, STATEMENT, MEMORANDUM, PRESENTATION, ADVICE OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO PURCHASER, ITS AFFILIATES OR ANY OF THEIR REPRESENTATIVES (INCLUDING ANY OPINION, PROJECTION, FORECAST, STATEMENT, MEMORANDUM, PRESENTATION, ADVICE OR INFORMATION THAT MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER, ITS AFFILIATES OR ANY OF THEIR REPRESENTATIVES, BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE OF THE TARGET OR ANY OF ITS AFFILIATES, INCLUDING, ANY INFORMATION MADE AVAILABLE IN ANY ELECTRONIC DATA ROOM HOSTED BY SELLER IN CONNECTION WITH THE TRANSACTION). Each of seller and target represents and warrants that it has not been induced by and has not relied upon any representations, warranties or statements, whether express or implied, made by Purchaser (or its Affiliates, officers, directors, employees, agents or representatives) that are not expressly set forth in Article 5 hereof, the purchaser Closing Certificate or in any other Transaction Agreement, whether or not any such representations, warranties or statements were made in writing or orally.
Seller hereby represents and warrants to Purchaser as follows:
EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE TARGET, THE SHARES OR THE TRANSACTION, AND SELLER DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY SELLER, ANY AFFILIATE OF SELLER, THE TARGET, ANY AFFILIATE OF THE TARGET OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES, AGENTS OR REPRESENTATIVES AND IF MADE, SUCH REPRESENTATION OR WARRANTY MAY NOT BE RELIED UPON BY PURCHASER OR ANY OF ITS AFFILIATES AND REPRESENTATIVES AS HAVING BEEN AUTHORIZED BY SELLER OR ANY OF ITS AFFILIATES. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN Article 3 OR THIS Article 4 (AS MODIFIED BY THE SELLER DISCLOSURE SCHEDULE), THE TARGET CLOSING CERTIFICATE AND ANY OTHER TRANSACTION AGREEMENT, SELLER HEREBY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, OPINION, PROJECTION, FORECAST, STATEMENT, MEMORANDUM, PRESENTATION, ADVICE OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO PURCHASER, ITS AFFILIATES OR ANY OF THEIR REPRESENTATIVES (INCLUDING ANY OPINION, PROJECTION, FORECAST, STATEMENT, MEMORANDUM, PRESENTATION, ADVICE OR INFORMATION THAT MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER, ITS AFFILIATES OR ANY OF THEIR REPRESENTATIVES, BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE OF THE TARGET OR ANY OF ITS AFFILIATES, INCLUDING, ANY INFORMATION MADE AVAILABLE IN ANY ELECTRONIC DATA ROOM HOSTED BY SELLER IN CONNECTION WITH THE TRANSACTION).
Purchaser hereby represents and warrants to Seller as follows:
delivery of the Transaction Agreements to which it is or will be a party and the consummation of the Transaction has been duly authorized by the requisite corporate, limited liability company, limited partnership or other similar action on the part of Purchaser. Each of the Transaction Agreements to which it is or will be a party, has been or will be at or prior to the Closing, duly and validly executed and delivered by ▇▇▇▇▇▇▇▇▇ and (assuming the due authorization, execution and delivery by the other parties thereto) each of the Transaction Agreements, when so executed and delivered, will constitute, the legal, valid and binding obligations of Purchaser, enforceable against it in accordance with its terms, subject to applicable Equitable Principles.
banker or financial advisor for Purchaser or its Affiliates and no Person is entitled to any fee or commission or like payment from Purchaser or its Affiliates in connection with the Transaction.
under the antitrust applicable Laws of any other applicable jurisdiction) and any notifications to, or as the case may be, any consultations with labor or trade unions or other employee representative body and (ii) obtain all approvals, consents, registrations, waiting period expirations or terminations, Permits, authorizations and other confirmations from any Governmental Authority or other Person necessary, proper or advisable to consummate the Transaction; provided that neither the Target nor Seller shall be obligated to pay any fees, costs or consideration to any Person from whom any such approval, consent, registration, Permit, authorization or other confirmation is requested. For the avoidance of doubt, the obtaining of any such approval, consent, registration, Permit, authorization or other confirmation is not a condition to Closing unless expressly set forth in Article 8.
contemplated by the Debt Commitment Letter. Such assistance shall include, but not be limited to, the following:
Notwithstanding the foregoing, prior to the Closing Date, neither Seller nor the Target nor any of their respective Subsidiaries, Affiliates or representatives:
Notwithstanding the foregoing, Purchaser may amend or replace the Debt Commitment Letter to add lenders, lead arrangers, bookrunners, syndication agents or similar entities that have not executed the Debt Commitment Letter as of the date hereof.
expense) may participate in (but not control the conduct of) the defense of such Claim in a manner that would not result in the loss of any attorney-client privilege, attorney work product privilege or any other legal privilege. If Purchaser so proceeds with the defense of any such Claim, Seller shall make available to Purchaser any documents and materials in such Person’s possession or control that may be reasonably necessary to the defense of such Claim. Purchaser will Seller written notice of Purchaser’s intention to settle any such Claim at least ten days prior to the settlement of any such Claim. Other than the settlement of a Claim with respect to which Losses do not exceed the Cap, (a) Purchaser shall not settle any Claim without the consent of Seller (which shall not be unreasonably withheld, conditioned or delayed) and (b) no settlement without the consent of Seller shall be dispositive of whether such Claim represented an indemnifiable matter hereunder in the first place or determinative of the existence or amount of Losses relating to such matter for which Purchaser shall be entitled to indemnification hereunder; provided, for the avoidance of doubt, that in the event that Seller has consented to any such settlement, Seller shall have no power or authority to object to such Claim and the payment of Losses in respect thereof.
documents and perform such other actions as Purchaser may reasonably require to more effectively (a) vest in Purchaser all of Seller’s right, interest and title in and to the Membership Interests or (b) transfer to the Target any asset owned by Seller or any of its Affiliates (excluding (i) the Excluded Assets, (ii) any Seller Provided Services and (iii) any Intellectual Property Rights) that would be required to be transferred to the Target prior to the Closing in order to make the representation and warranty set forth in Section 3.8(c) true and correct in all respects. In the event that, on or after the Closing, a Party receives payments or funds due or belonging to another Party pursuant to the terms of this Agreement or any of the Transaction Agreements, then the Party receiving such payments or funds shall promptly forward or cause to be promptly forwarded such payments or funds to the proper Party (with appropriate endorsements, as applicable), and will account to such other Party for all such receipts. Without limiting the generality of the foregoing and notwithstanding anything to the contrary in this Agreement, from and after Closing, promptly upon request from Purchaser (email being sufficient), Seller will, and will cause its Affiliates to, at the sole cost and expense of Seller, execute and deliver such instruments, certificates, agreements and other documents and take and perform all actions necessary, appropriate or required to irrevocably and completely terminate any Related Party Arrangement (other than the Contract set forth on Section 10.2(e) of the Seller Disclosure Schedule) without any further liability or obligation to Purchaser or any of its Affiliates (including the Target).
provisions of this Agreement (except where a provision therein expressly provides that it is intended to take precedence over this Agreement) this Agreement shall control.
To Seller, to:
Telit IOT Solutions Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.,
Irvine, CA 92618
Attention: [*****]; [*****]
E-mail: [*****]; [*****]
With a copy (which shall not constitute notice) to:
▇▇▇▇▇ Lovells International LLP
Atlantic House
Holborn Viaduct, London, EC1A 2FG
Attention:▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to Purchaser, or after the Closing, the Target, to:
PDF Solutions, Inc.
▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Santa Clara, CA 95050
Attention: General Counsel
Email: [*****]
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Email:▇▇▇▇.▇▇▇▇▇▇▇@▇▇.▇▇▇; ▇▇▇▇.▇▇▇▇▇▇▇@▇▇.▇▇▇; ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇.▇▇▇
or any covenants, conditions or provisions contained herein, as a third party beneficiary or otherwise.
their respective successors, predecessors or assigns (or any successors, predecessors or assigns of the foregoing) (collectively, the “Non-Party Affiliates”), shall have any liability (whether in Law or in equity, whether in contract or in tort or otherwise) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach (other than with respect to Fraud or as expressly set forth in the Non-disclosure Agreement, or any other Transaction Agreement), including any alleged non-disclosure or misrepresentations made by any such Person or as a result of the use or reliance on any information, documents or materials made available by such Person. Without limiting the foregoing, to the maximum extent permitted by Law, except to the extent otherwise expressly set forth in the Non-disclosure Agreement, or any other Transaction Agreement or in the case of Fraud, each Contracting Party hereby waives and releases any and all rights, claims, demands, or causes of action that may otherwise be available, whether at Law, in equity, in contract, in tort or otherwise, to avoid or disregard the entity form of a Contracting Party or otherwise impose liability of a Contracting Party on any Non-Party Affiliate, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise, in each case arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach (other than as expressly set forth in the Non-disclosure Agreement, or any other Transaction Agreement). Notwithstanding anything to the contrary contained herein or otherwise, after the Closing, no party may seek to rescind this Agreement or any of the transactions contemplated hereby.
or Target herein shall be deemed to be disclosed and incorporated in any other section of the Seller Disclosure Schedule corresponding to a representation and warranty of Seller or Target herein to the extent the relevance of such disclosure to such representation and warranty would be appropriate and readily apparent on its face to a person who has read such disclosure and such representation and warranty, whether or not such disclosure contains an express cross-reference. The Seller Disclosure Schedule and the information and disclosures contained therein are intended only to qualify the representations and warranties or covenants, as applicable, of Seller and Target contained in this Agreement. Nothing in the Seller Disclosure Schedule is intended to broaden the scope of any representation or warranty contained in this Agreement or create any covenant. Matters reflected in the Seller Disclosure Schedule are not necessarily limited to matters required by the Agreement to be reflected in the Seller Disclosure Schedule, respectively. Such additional matters are set forth for informational purposes and do not necessarily include other matters of a similar nature. References to any documents contained in the Seller Disclosure Schedule are not intended to summarize or describe such documents, but rather are for convenience only.
contract relating to the Debt Financing; (b) agrees not to bring, or support any Person in bringing, or permit any of its Affiliates to bring, or support any person in bringing, any legal proceeding against, or seek to recover monetary damages from, any Debt Financing Sources in any way arising out of or relating to this Agreement, the Debt Commitment Letter, or any contract entered into with respect the Debt Financing, or the performance of any services thereunder, whether in contract or in tort or otherwise, in any forum, other than the Federal court of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York; (c) agrees that any proceeding against any of the Debt Financing Sources in any way arising out of or relating to this Agreement, the Debt Commitment Letter, or any contract entered into with respect the Debt Financing, or the performance of any services thereunder, whether in contract or in tort or otherwise, shall be subject to the exclusive jurisdiction of, and shall be brought and heard and determined exclusively in, the Federal court of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and any appellate court thereof and irrevocably submits itself and its property with respect to any such legal proceeding to the exclusive jurisdiction of such court; (d) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of any such legal proceeding in the Federal court of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and any appellate court thereof; (e) agrees that any such legal proceeding shall be governed by the laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state); (f) agrees that service of process upon such party in any such legal proceeding shall be effective if notice is given in accordance with the notice provisions of this Agreement; (g) knowingly, intentionally and voluntarily waives (to the fullest extent permitted by law) trial by jury in any proceeding brought against the Debt Financing Sources in any way arising out of or relating to this Agreement, the Debt Commitment Letter or any other contract entered into with respect the Debt Financing or the performance of any services thereunder; (h) agrees that the Debt Financing Sources are express third-party beneficiaries of, and may enforce, this section and any of the provisions in this Agreement reflecting the agreements set forth in this section; (i) agrees that the Purchaser may without the prior written consent of any other Party hereto assign or transfer any or all of its rights and interests hereunder to any Debt Financing Source as collateral security in respect of the Debt Financing; and (j) agrees that the provisions in this section, the definitions used in this section (as used in such section) and any other provisions of this Agreement to the extent an amendment, waiver or modification thereof would adversely affect the substance of any of the foregoing as it affects the Debt Financing Sources, shall not be amended, waived or otherwise modified, in each case, in any way adverse to the Debt Financing Sources without the prior written consent of the Debt Financing Sources party to the Debt Commitment Letter.
“Accounting Rules” means the rules, principles, policies and practices set forth on Exhibit A.
“Acquisition Proposal” means any inquiry, proposal or offer from any Person (other than Purchaser and its Representatives) relating to (a) any merger, amalgamation, reorganization, consolidation, tender offer, self-tender, exchange offer, equity acquisition, asset acquisition, business combination, recapitalization or similar transaction (howsoever structured and whether direct or indirect) by any Person or “group” (as defined under Section 13(d) of the Securities Exchange Act) involving the Target, any sale of all or substantially all of the assets of the Target or other similar transaction involving the Target or the Business (excluding sales of inventory in the Ordinary Course of Business), (b) the acquisition (howsoever structured and whether direct or indirect) by any Person or “group” (as defined under Section 13(d) of the Securities Exchange Act) of the Equity Securities or voting power of the Target, or (c) any other transaction having a similar effect to those describes in clause (a) or clause (b).
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; provided that references to Affiliates of Purchaser shall mean only controlled Affiliates of Purchaser. The Target shall be deemed, for purposes of this Agreement, an Affiliate of Seller prior to the Closing, and an Affiliate of Purchaser from and after the Closing.
“Anti-Corruption Laws” means (i) all Laws implemented in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997; (ii) the Foreign Corrupt Practices Act of 1977 of the United States of America, as amended by the Foreign Corrupt Practices Act Amendments of 1988 and 1998, and as may be further amended and supplemented from time to time; (iii) the UK Bribery Act 2010; (iv) Brazilian Laws 9.613/1998, 12.529/2012 and 12.846/2013; and (v) any other applicable anti-corruption and anti-money laundering Law (including any (a) statute, ordinance, rule or regulation; (b) Order; and (c) rule, regulation, guideline or order of any public body, or any other administrative requirement) which prohibits the conferring of any gift, payment or other benefit on any person or any officer,
employee, agent or adviser of such person or is broadly equivalent to the laws referred to in (ii) to (iv).
“Balance Sheet” means the unaudited consolidated balance sheet of the Target as of the Balance Sheet Date.
“Balance Sheet Date” means 30 September 2024.
“Benefit Plan” means each (a) employee benefit plan (as defined in Section 3(3) of ERISA) (whether or not subject to ERISA), (b) employment, consulting or other service agreement or arrangement and (c) pension, retirement, supplemental retirement, profit-sharing, deferred compensation, equity or equity-linked compensation, equity option, restricted equity, phantom equity, employee stock ownership, health, welfare, dental, life, disability, retiree benefit, cafeteria, flexible spending, severance pay, termination, vacation, death benefit, change in control, retention, bonus, commission or other incentive plan, program, policy, agreement or arrangement and each other employee benefit plan or fringe benefit plan, in each case, which is sponsored, maintained or contributed to (or required to be contributed to) by the Seller Group or the Target or under which the Seller Group or the Target has any obligation or Liability to provide compensation or benefits to or for the benefit of any Service Provider (or any spouse, beneficiary or dependent thereof), other than any government programs sponsored or maintained by a Governmental Authority or statutory benefits (other than under a United States statute).
“Business” means the research, design, development, manufacture, marketing, implementation, licensing, sale, distribution, provision, maintenance, and support of the Business Products and Services by Target or Seller or any of its Seller’s Affiliates, including Target (in respect of the Seller of any of Seller’s Affiliates (other than Target), solely with respect to (x) services which are or have at any time been provided to and, used or held for use by or on behalf of Target and (y) assets which are or have at any time been used or held for use by Target or used or held for use by Seller or its Affiliates (other than Target) to provide services to Target).
“Business Day” means any day of the year on which national banking institutions in New York, New York, San Francisco, California or London, United Kingdom are open to the public for conducting business and are not required or authorized to close.
“Business Products and Services” means: (i) the product offering referred to as “secureWISE” and all related Computer Software, hardware, equipment and services researched, designed, developed, manufactured, marketed, licensed, sold, distributed, maintained or supported in respect thereof, which includes the provision of secure remote equipment and system connectivity, access and monitoring, centralized IIoT connectivity across machines and vendors, related collaboration tools, data transmission and sharing and other operational technologies and related security features for semiconductor fabs, OEMs and other industries; and (ii) all products, services, Computer Software, hardware, equipment and service offerings in development in connection with the products and services referenced in clauses (i).
“Calculation Time” means 11:59 p.m. ET on the Business Day immediately prior to the Closing Date.
“Cash” means, without duplication, all cash and cash equivalents, including readily marketable securities, of the Target as the Calculation Time, determined in accordance with the Accounting Rules. Cash shall (i) exclude Restricted Cash, (ii) exclude deposits with landlords, outstanding checks, outstanding wires and outstanding drafts issued by the Target but not yet cleared and (iii) include the amounts of any checks deposited, inbound wires and any amounts held in or being transferred through an automatic clearing house not yet cleared (including electronic funds transfers, direct deposits and any other forms of electronic payments).
“Closing Date Cash” means the Cash of the Target as of the Calculation Time; provided that if the Target uses any Cash following the Calculation Time but prior to the Closing, such amounts shall be deemed to have been used as of the Calculation Time.
“Closing Date Indebtedness” means all Indebtedness of the Target as of the Calculation Time; provided that any Indebtedness of the Target incurred following the Calculation Time but prior to the Closing shall be deemed incurred as of the Calculation Time.
“Closing Date Working Capital” means the Working Capital of the Target as of the Calculation Time.
“Closing Date Transaction Expenses” means the Transaction Expenses as of the Calculation Time; provided that any Transaction Expenses incurred following the Calculation Time but prior to the Closing, shall be deemed incurred as of the Calculation Time.
“Closing Purchase Price” an amount equal to (a) Base Purchase Price, (b) either (i) plus the amount by which the Closing Date Working Capital exceeds the Target Working Capital, or (ii) minus the amount by which the Target Working Capital exceeds the Closing Date Working Capital, (c) plus the amount of any Closing Date Cash, (d) minus the amount of any Closing Date Indebtedness and (e) minus the amount of any Closing Date Transaction Expenses.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Collective Bargaining Agreement” means any collective bargaining agreement, union contract, employee representation agreement, works council or other agreement with any Union.
“Computer Equipment” means any computer hardware or tangible information technology, communications, or data processing systems or infrastructure owned or leased by (a) the Target or (b) Seller or any of its Affiliates (other than Target) and used in connection with the
Business, including servers, systems, sites, circuits, hardware, networks, platforms and other computer, network and telecommunications tangible assets and equipment and mobile devices.
“Computer Software” means computer software programs and systems, including all software implementations of algorithms, heuristics models and methodologies and related data files, all application programming interfaces, operating systems, management code, firmware, utilities, graphical user interfaces and software engines, together with all documentation, including user manuals, technical manuals, developer notes, developer tools, developers’ kits, utilities, comments and annotations, web materials, and architectural and design specifications and training materials, in each case, whether in any form or format (including source code or object code).
“Computer Systems” means Computer Software and Computer Equipment, in each case to the extent owned or controlled by Target or otherwise used in the operation of the Business.
“Contract” means any agreement, contract, arrangement, indenture, note, mortgage, bond, lease, license, instrument or other legally enforceable commitment, promise or undertaking, in each case, whether written or oral, including all amendments, supplements, exhibits and schedules thereto.
“Data Room” means the electronic documentation site in respect of the Target and the Transaction, established by Intralinks on behalf of Seller.
“DB Security” means the pledge that Lucid Trustee Services Limited (in its capacity as security agent) holds over the Membership Interests pursuant to the pledge and security agreement agreed between the Seller and ▇▇▇▇▇ Agency Services Limited (formerly Lucid Trustee Services Limited) and dated 24 May 2021.
“Debt Commitment Letter” means the debt commitment letter delivered by the Purchaser to the Seller on or prior to the date hereof, together with any related term sheet, exhibits, schedules and attachments thereto, in each case, as amended, supplemented or replaced in compliance with this Agreement, pursuant to which the financial institutions party thereto have agreed to provide or cause to be provided the debt financing set forth therein for the purposes of financing the transactions contemplated by this Agreement.
“Debt Fee Letter” means that certain fee letter relating to the Debt Financing.
“Debt Financing” means the debt financing incurred or intended to be incurred pursuant to the Debt Commitment Letter.
“Debt Financing Documents” means the agreements, documents and certificates contemplated by the Debt Financing.
“Debt Financing Required Information” means (a) the financial statements required by paragraph 6(a) of Annex B to the Debt Commitment Letter; (b) such information as may be reasonably requested and as may be reasonably available to the Seller or the Target to assist the
Purchaser in connection with the Purchaser’s preparation of a pro forma consolidated balance sheet and related pro forma income statement of the Target required by paragraph 6(c) of Annex B to the Debt Commitment Letter and (c) customary due diligence information (including backup due diligence materials) reasonably requested by Purchaser in connection with the foregoing or the Debt Financing, which with respect to any reports prepared by third parties may be subject to the delivery of customary non-reliance letters.
“Debt Financing Failure Event” shall mean any of the following (a) the commitments with respect to all or any portion of the Debt Financing expiring, or being terminated or (b) for any reason, all or any portion of the Debt Financing becoming unavailable.
“Debt Financing Source” means each party that has a commitment to provide or arrange or otherwise entered into agreements in connection with the Debt Financing, including the Debt Commitment Letter, and the parties to any joinder agreements or any definitive documentation entered pursuant thereto or relating thereto, together with their respective Affiliates and their and their respective Affiliates’ former, current and future officers, directors, employees, agents and representatives and their respective successors and assigns.
“Debt KYC Deliverables” means documentation and other information about the Target and its Subsidiaries as is reasonably requested by the Purchaser in connection with the Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act, or to satisfy a Financing Condition relating to the delivery of such documentation and information.
“Debt Marketing Activity” means all activity undertaken (or proposed to be undertaken) in connection with the syndication or other marketing of the Debt Financing as is customary for such similar debt financings.
“Economic Sanctions Law” means any law, rule, regulation, Order, or other measure relating to economic or financial sanctions or trade embargoes administered, implemented or enforced by any Sanctions Authority.
“Equitable Principles” means (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, preferential transfers and similar Laws affecting creditors’ or debtors’ rights and remedies generally, and (ii) general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
“Equity Securities” means with respect to any Person, (a) any capital stock, partnership, limited liability company or membership interest, beneficial interest, participation units, joint venture interest, or other share of capital, equity, ownership, voting or similar interests (however designated); (b) securities, rights, warrants or options, including debt securities, conversion rights, exchange rights, purchase rights, and any other contractual right, in each case, directly or indirectly convertible into or exchangeable or exercisable for any capital stock, partnership, limited liability company or membership interest, beneficial interest, participation
units, joint venture interest, or other share of capital, equity, ownership, voting or similar interests (including phantom equity, profit participation, and other similar rights); or (c) other rights to acquire from such Person, or other obligation of such Person to issue, any capital stock, partnership, limited liability company or membership interest, beneficial interest, participation units, joint venture interest, or other share of capital, equity, ownership, voting or similar interests.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means, with respect to any Person, any other Person that, together with such first Person, is or was in the past six years required to be treated as a single employer under Section 414 of the Code.
“Excluded Assets” means (A) the assets set forth under the heading “Assets” in Section 3.8(c) of the Seller Disclosure Schedule and (B) the assets to be made available by Seller or its Affiliates (other than Target) to Target under the Form of Transition Services Agreement.
“Financing Conditions” means the conditions precedent set forth in Annex B to the Debt Commitment Letter.
“Financing Deliverables” means such information as may be reasonably requested by the Purchaser in connection with preparation of the Debt Financing Documents, including such information as may be necessary to complete, prepare or delivery applicable disclosure schedules and certificates (including perfection certificates) and legal opinions in connection with the Debt Financing.
“Fraud” means, in the case of a Party, such Party’s actual and intentional fraud with respect to the making of any of the representations and warranties contained in this Agreement; provided, that such actual and intentional fraud shall be deemed to exist only if such Party had actual knowledge (as opposed to imputed or constructive knowledge) that the representations and warranties made by such Party pursuant to this Agreement were actually false when made, and such misrepresentation was material, made with the express intention to induce the other Party to enter into this Agreement and upon which the other Party suffered damages as a direct result of its reasonable reliance thereupon. “Fraud” shall not include any fraud claim based on, constructive fraud, negligent misrepresentation or omission or any similar theory.
“GAAP” means the generally accepted accounting principles, as in effect as of the relevant date(s) of application thereof.
“Governmental Authority” means any (i) nation or domestic, foreign, federal, state, provincial or local government or governmental body, governmental entity or quasi-governmental entity, (ii) authority, agency, department or commission entitled to exercise any executive, legislative, police, taxing, judicial, administrative or regulatory body, or political subdivision thereof, (iii) any board, bureau, branch, division, department, regulator, judicial body, legislative, executive, administrative hearing body, tribunal, instrumentality or authority thereof, (iv) any
court, mediator, arbitrator or arbitral body (public or private), and (v) any multinational organization or body (including the European Commission).
“▇▇▇▇▇ Lovells” means the international legal practice that comprises ▇▇▇▇▇ ▇▇▇▇▇▇▇ US LLP, ▇▇▇▇▇ Lovells International LLP and their affiliated businesses.
“Indebtedness” of any Person means, without duplication, in accordance with the Accounting Rules, the sum of (i) the outstanding principal amount of and accrued or unpaid interest of (A) indebtedness of such Person for borrowed money, (B) indebtedness evidenced by notes, debentures, bonds, debt security or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such person in respect of letters of credit, bankers’ acceptances and similar facilities issued for the account of such Person (but solely to the extent drawn and not paid); (iii) all guarantees or obligations of the type referred to in clauses (i) and (ii) of other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, (iv) the capitalized portion of lease obligations under capitalized leases (excluding the effects of ASC 842) (v) any indebtedness secured by a Lien (other than a Permitted Lien) on a Person’s assets, (vi) obligations of such Person for unpaid or deferred consideration, earn-out or holdback obligations (whether contingent or otherwise), including any seller notes, earn-out obligations, post-closing true-up obligations or similar payment obligations with respect to the acquisition of any business, assets or securities, (vii) the outstanding principal amount of and accrued interest on any loan made pursuant to the “Paycheck Protection Program” in Sections 1102 and 1106 of the CARES Act, any funds received by such Person pursuant to the “Economic Injury Disaster Loan” program or an advance on an “Economic Injury Disaster Loan” pursuant to Section 1110 of the CARES Act or any loan under similar COVID-relief programs in any non-U.S. jurisdictions, (viii) any off balance sheet financing (excluding operating lease obligations under ASC 842), (ix) amounts required to settle any hedging, swaps, derivative, forward contract, sale leaseback or similar arrangement, in each case, valued at the termination value thereof, (x) all unsatisfied Liabilities and obligations for withdrawal liability to any “multiemployer plan” (as defined in Section 3(37) or 4001(a)(3) of ERISA) or any unfunded or underfunded pension or retiree medical or welfare plan or arrangement Liabilities (calculated on a plan termination basis), including any unfunded or underfunded Liabilities with respect to any non-U.S. pension plan, whether or not accrued, (xi) all Liabilities in respect of any post-retirement or retiree health, medical or welfare benefit or any unfunded or underfunded deferred compensation, phantom equity or similar arrangements, whether or not accrued, (xii) all Liabilities in respect of any accrued, unpaid commissions, bonuses or similar payments and any accrued, unpaid severance, termination or similar payments and benefits, (xiii) all Liabilities in respect of any accrued and unpaid vacation, sick pay or other paid time off and (xiv) all employer-side payroll Taxes payable in connection with the foregoing clauses (x)-(xiii); provided, however, that for the avoidance of doubt, Indebtedness shall not include (A) any amounts taken into account in the calculation of the Closing Date Working Capital, (B) any obligations under operating leases, (C) any undrawn letter of credit or similar instrument, (D) the endorsement of negotiable instruments for collection in the Ordinary Course of Business, (E) short and long-
term deferred revenue, and (G) Liabilities related to the Target’s long-term incentive Benefits Plans.
“Intellectual Property Rights” means any and all intellectual property and proprietary rights of any kind, whether protected, created or arising under the Law of the U.S., any state, any other country or jurisdiction, or any international treaty regime or convention, whether registered or unregistered, including all such rights in and to any of the following: (i) registered and unregistered copyrights, design rights and analogous rights in works of authorship, including moral rights and applications, registrations, and renewals for the foregoing; (ii) patents and patent applications (including utility models that are subject to statutory protection), including reissuances, provisionals, continuations, continuations-in-part, substitutions, revisions, divisions, renewals, extensions and reexaminations; (iii) trade names, trademarks, service marks, trade dress, logos, slogans, certification marks, and any other source identifiers of any kind or nature (including social media handles), including all goodwill associated therewith, and applications (including intent to use applications), registrations, and renewals for the foregoing; (iv) domain name registrations; (v) trade secrets and confidential information, including as to source code, documentation, know-how, processes and other Technology, customer, distributor, reseller and supplier lists, financial, business and marketing plans, advertising and promotional materials, pricing and cost information, data, databases and data compilations, technical data, test data, research and development information, inventions (whether or not patentable) and marketing information; (vi) mask works and integrated circuit topologies, and applications, registrations, and renewals for the foregoing; and (vii) Computer Software.
“IRS” means the United States Internal Revenue Service.
“Key Personnel” means each of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and the Service Provider with employee ID T3414 (job title of Technical Account Manager) as set out in the employee census contained in Section 3.18(j)(i) of the Seller Disclosure Schedule.
“Knowledge” means, (i) for purposes of Article 3, the actual knowledge (without independent inquiry) of any Person set forth in Section 12.1(a) of the Seller Disclosure Schedule and (ii) for purposes of Article 4, the actual knowledge (without independent inquiry) of any Person set forth in Section 12.1(a) of the Seller Disclosure Schedule.
“Law” means all federal, state, provincial, regional, municipal, local or foreign laws (including common laws), statutes, codes, constitutions, treaties, standards, promulgations, ordinances, rules, regulations, resolutions and Orders or other requirements of any Governmental Authority.
“Liability” means any debt, obligation, duty or liability of any nature (including any known or unknown, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, asserted or unasserted, liquidated or unliquidated, absolute or contingent, direct or indirect, conditional, implied, vicarious, derivative, joint, several or secondary, determined or determinable
liability), whenever or however arising (including those arising under Law or any Proceeding or Order of a Governmental Authority and those arising under any Contract) regardless of when asserted, regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with GAAP, and regardless of whether such debt, obligation, duty or liability is immediately due and payable or to become due or payable.
“Lien” means, with respect to any property or asset, any legal or equitable, specific or floating lien (statutory or otherwise), claim, mortgage, deed of trust, deed to secure debt, lease, sublease, license, option, right of first refusal or first offer, right-of-way, right of setoff, pledge, easement, restriction on transfer, covenant (including any restrictive covenant), servitude, defect in title, condition, encroachment or other survey defect, charge, encumbrance, adverse right or claim or security interest of any kind or nature whatsoever (including any restriction on the right to vote or transfer the same, other than Liens arising under federal and state securities Laws). For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.
“Losses” means all damages, losses, Taxes, deficiencies, fines, costs, interests, payments, fees claims, Liabilities, demands, charges, suits, penalties and expenses (including costs of investigation and reasonable attorneys’ and other professionals’ fees, expenses and disbursements); provided that Losses shall not include punitive damages (except as payable to a third party).
“Material Customer” means, collectively, the 11 largest customers of the Business (measured by aggregate dollars billed by the Business to such customers (in each case, including any and all Affiliates as a single customer)) during the fiscal year ended December 31, 2024 as set forth in Section 3.24(a)(1) of the Seller Disclosure Schedule.
“Material Supplier” means, collectively, the 8 largest suppliers of materials, products, or services to the Business (measured by aggregate dollars spent by the Business on such materials, products, and services (in each case, including any and all Affiliates as a single supplier)) during the fiscal year ended December 31, 2024 as set forth in Section 3.24(a)(2) of the Seller Disclosure Schedule.
“Novation Agreements” means each of the Novation Agreements to be delivered to Purchaser pursuant to Section 2.2(j).
“OEM Master Agreement Amendment” means an amendment to the OEM Agreement, in form and substance reasonably acceptable to Purchaser, pursuant to which the term of the term of the OEM Agreement shall be no more than six (6) months following the Closing Date hereunder.
“OEM Agreement” means that certain secureWISE Master Agreement, by and between Target and Telit Communications S.p.A.
“Open Source Software” means any Computer Software that is licensed, provided, or distributed under the terms of any open-source or similar license agreement, including any license agreement that meets the definition of “Open Source” promulgated by the Open Source Initiative, available online at ▇▇▇▇▇://▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇, or the definition of "Free Software" promulgated by the Free Software Foundation (any such license, an “Open Source License”).
“Order” means any order, injunction, judgment, decree, decision determination, ruling, writ, assessment or arbitration or other award, decision, verdict, sentence, subpoena, agreement, stipulation or determination issued or entered into by or with any Governmental Authority or arbitrator.
“Ordinary Course of Business” means, with respect to any Person, the ordinary and usual course of business of such Person (including with respect to nature, scope and magnitude) consistent with past practices.
“Organizational Documents” means, with respect to any entity, the certificate of incorporation, articles of incorporation, by-laws, articles of organization, partnership agreement, certificate of formation, limited liability company agreement, formation agreement, joint venture agreement and other similar organizational documents of such entity (in each case, as amended, amended and restated, supplemented or otherwise modified in accordance with their terms through the date of this Agreement).
“Permits” means any approvals, authorizations, consents, licenses, permits, concessions, clearances, accreditations, franchise rights, exemptions, waivers, clearances, certificates and other authorizations (including all pending applications therefor or renewals thereof) issued, granted, given or otherwise made available by, under the authority of, or obtained from a Governmental Authority.
“Permitted Liens” means (i) statutory Liens for Taxes, assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP and disclosed on the latest balance sheet of the Target; (ii) statutory Liens and mechanics’, carriers’, workers’, repairers’ and similar Liens which are not yet due and payable arising or incurred in the Ordinary Course of Business or the amount or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP and disclosed on the latest balance sheet of the Target; (iii) pledges, deposits or other Liens to the performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations (including, workers’ compensation, unemployment insurance or other social security legislation, but excluding Liens for Taxes), in each case, in the Ordinary Course of Business; (iv) zoning, entitlement and other land use and environmental regulations by any Governmental Authority having jurisdiction over such real property which are not, individually or in the aggregate, violated by the current use and operation of such real property; (v) with respect to Intellectual Property Rights, non-exclusive licenses granted or received in the Ordinary Course of Business; (vi) purchase money Liens and Liens
securing rental payments under capital lease arrangements, (vii) transfer restrictions under applicable federal and state securities Laws, (viii) Liens associated with the DB Security which will be released at Closing and are disclosed on the Seller Disclosure Schedule; and (ix) Liens with respect to real property which (a) do not secure the payment of a sum of money and (b) that would not, individually or in the aggregate, reasonably be expected to materially interfere with the use or value of the affected property in the operation of the Target.
“Person” means any individual person, corporation, general partnership, limited liability partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, cooperative, association, foreign trust, domestic or foreign business organization, unincorporated organization, Governmental Authority, labor union or other entity.
“Personal Information” means information in any form that is capable, directly or indirectly, of being associated with, related to or linked to, or used to identify, describe, contact or locate, a natural Person, device or household or is considered “personally identifiable information,” “personal information,” “personal data,” or any similar term by any applicable Laws or Privacy Requirements.
“Pre-Closing Period” means any taxable period (or portion thereof) ending on or before the Closing Date.
“Privacy Laws” means all applicable Laws, in each case as amended, consolidated, re-enacted or replaced from time to time, relating to privacy, data security, the Processing of Personal Information, data breach notification, website and mobile application privacy policies and practices, consumer protection, the Processing and security of payment card information, wiretapping, the interception of electronic communications, the tracking or monitoring of online activity, data- or web-scraping, advertising or marketing, and email, text message, or telephone communications.
“Proceeding” means (a) any litigation (at law or in equity), mediation, arbitration or other proceedings (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private), or any claims (including any cross-claim or counterclaim), actions, suits, lawsuits, causes of action, charges, complaints, demands, audits, assessments or hearings before, or otherwise involving, any Governmental Authority (except for debt collection in the normal course of business); or (b) any dispute with, or any investigation, inquiry, injunction, subpoena or enforcement proceedings by, or otherwise involving, any Governmental Authority.
“Process” or “Processing” means any operation or set of operations which is performed on information, including Personal Information, such as the use, collection, processing, storage, recording, organization, adaption, alteration, transfer, retrieval, consultation, disclosure, dissemination, combination or disposal of such Personal Information, and/or is considered “processing” by any applicable Laws or Privacy Requirements.
“Purchaser D&O Tail Portion” means an amount equal to the lesser of (a) one-half of all fees, costs, expenses and other obligations incurred by the Target in connection with obtaining the D&O Tail Policy and (b) U.S.$55,000.
“Purchaser Fundamental Representations” means, collectively, the representations and warranties in Section 5.1 (Organization), 5.2 (Authorization of Agreement), 5.3 (Conflicts; Consents of Third Parties), 5.5 (Financial Capability), 5.8 (Financial Advisors) and 5.9 (No Inducement; No Other Representations and Warranties; No Reliance; Purchaser Investigation).
“Purchaser Group” means, after the Closing, Purchaser and its Affiliates (including the Target).
“Purchaser Material Adverse Effect” means (i) a material adverse effect on the ability of Purchaser to consummate the Transaction or perform its obligations under this Agreement or (ii) any event, change, occurrence, circumstance or effect that, when taken individually or together with all other adverse events, changes, occurrences, circumstances or effects, would, or would reasonably be expected to, prevent or materially delay Purchaser from consummating the Transaction.
“Purchaser Released Parties” means Purchaser’s present or former Affiliates, officers, directors, managers, employees, partners, equityholders, members, agents, attorneys, representatives, successors or permitted assigns.
“Reference Closing Statement” means the form of Closing Statement set forth at Exhibit B as prepared on February 4, 2025.
“Registered IP” means Intellectual Property Rights that are registered, filed or issued (or for which an application is pending for registration, filing or issuance) under the authority of, with or by any Governmental Authority (or, in the case of domain names, under the authority of any authorized private registrar).
“Representatives” means with respect to a Person, any officer, equityholder, manager, service provider, director or employee of such Person or any accountant, attorney, investment banker or other agent, advisor or similar representative of such Person.
“Restricted Cash” means any cash or cash equivalent that is not freely usable because it is subject to restrictions or limitations on use or distribution by Law, Contract, or otherwise, including (a) cash that is not immediately freely available for distribution to shareholders, members or equityholders (as applicable) or where as a result of the requirements of Law, the dividend or distribution of which is subject to Tax, including any withholding or other similar Tax, or the dividend or distribution of which would produce other adverse Tax consequences for Purchaser, the Target or any of Purchaser’s Subsidiaries; (b) cash that is held in connection with any security, escrow or similar deposits; (c) any deposits or cash held (i) as a guarantee in respect of performance of Contracts, or (ii) as collateral in respect of outstanding insurance policies, leases or letters of credit or credit card receivables; and (d) cash that is required
to be held by or at the direction of any Governmental Authority pursuant to a regulatory or Contract requirement.
“Retained Business” means all businesses of Seller and its Affiliates other than the Business.
“Sanctioned Person” means any person or entity (a) listed on any list of restricted entities, individuals or organizations (or equivalent) maintained by a Sanctions Authority, including the Specially Designated Nationals and Blocked Persons (SDN) List, Foreign Sanctions Evader List, Sectoral Sanctions Identification List, Denied Persons List, Unverified List, Entity List or Debarred Parties List, the consolidated list of persons, groups and entities subject to EU financial sanctions, HMT’s consolidated list of Financial Sanctions Targets in the UK, the UK Sanctions List, or other similar lists of restricted parties maintained by a Sanctions Authority under Trade Control Laws or Economic Sanctions Laws, or subject to asset freezing measures published by any Sanctions Authority (a “Listed Person”); (b) that is: (i) owned in the aggregate (directly or indirectly) 50 percent or more by; or (ii) controlled (as defined by the relevant Economic Sanctions Law or in guidance issued by a Sanctions Authority) by, any Listed Person (or a person acting on behalf of such Listed Person) where such owned or controlled person is, by virtue of applicable Economic Sanctions Law, subject to the same or substantially equivalent prohibitions or restrictions as a Listed Person; (c) located or ordinarily resident in, incorporated or organized under the laws of a Sanctioned Territory or acting on behalf of or at the direction of such a person; or (d) that is otherwise a person with whom transactions are prohibited under any Economic Sanctions Law.
“Sanctioned Territory” means at any time, a country or territory that is the subject of comprehensive country-wide or territory-wide Economic Sanctions Laws, comprising as of the date hereof, Cuba, Crimea region of Ukraine, Iran, North Korea, Syria, the so-called Luhansk People’s Republic and the so-called Donetsk People’s Republic.
“Sanctions Authority” means, in respect of the jurisdictions set out below, any official institution, agency or person which is duly appointed, empowered, or authorized to enact, administer, implement and/or enforce Economic Sanctions Law, (a) the United States of America (including the Office of Foreign Assets Control, the United States Department of State and the United States Department of Commerce); (b) the Security Council of the United Nations; (c) the European Union and its Member States; and (d) the United Kingdom (including His Majesty's Treasury).
“Securities Act” means the Securities Act of 1933, as amended.
“Security Incident” means any (i) accidental, unlawful or unauthorized access, use, or disclosure or any exfiltration, encryption, compromise or other Processing of Personal Information; or (ii) occurrence that constitutes a “data breach,” “security breach,” “personal data breach,” “security incident,” “cybersecurity incident,” or any similar term under any applicable Privacy Requirement.
“Seller Fundamental Representations” means, collectively, the representations and warranties in Sections 3.1 (Organization), 3.2 (Conflicts; Consents of Third Parties), 3.3 (Capitalization), 3.8 (Assets), 3.11 (Covered Indebtedness; No Liens), 3.23 (Financial Advisors), 3.25 (No Other Representations or Warranties), 4.1 (Authorization of Agreement), 4.2 (Conflicts; Consents of Third Parties) and 4.4 (No Other Representations or Warranties).
“Seller Group” means Seller and its Affiliates (other than the Target).
“Seller Group Benefit Plan” means any Benefit Plan sponsored, maintained or entered into by any member of the Seller Group.
“Seller Group Employee Liabilities” means any and all Liabilities, commitments and obligations of the Seller Group (including all Liabilities, commitments and obligations with respect to wages, compensation, cash or equity incentives, benefits, severance, accrued obligations, employment, engagement, retention or discharge, COBRA (or similar applicable Laws), the WARN Act, claims of unfair labor practices and claims under any applicable Laws relating to employment or labor): (a) relating to any current or former director, manager, officer, employee, individual advisor, individual consultant or individual independent contractor of any member of the Seller Group (including for clarity, any such advisor, consultant or independent contractor engaged through an entity wholly-owned by such individual and any Service Provider employed or engaged by any member of the Seller Group), or any beneficiary or dependent thereof, regardless of when arising, or (b) arising at any time under any Seller Group Benefit Plan.
“Seller IP Assignment Agreement” means the assignment agreement in the form attached hereto at Schedule G;
“Seller Leased Real Property” means all leases, subleases and occupancy agreements of real property pursuant to which the Seller is the lessee, sublessee, sublessor, or party to such agreement.
“Seller Material Adverse Effect” means (i) a material adverse effect on the ability of Seller to consummate the Transaction or perform its obligations under this Agreement or (ii) any event, change, occurrence, circumstance or effect that, when taken individually or together with all other adverse events, changes, occurrences, circumstances or effects, would, or would reasonably be expected to, prevent or materially delay Seller from consummating the Transaction or performing Seller’s obligations under this Agreement.
“Seller Provided Services” means (A) the services to be provided by Seller or its Affiliates (other than Target) to Target under the Form of Transition Services Agreement and (B) the services set forth under the heading “Services” in Section 3.8(c) of the Seller Disclosure Schedule.
“Seller Released Parties” means Seller’s present or former Affiliates, officers, directors, managers, employees, partners, equityholders, members, agents, attorneys, representatives, successors or permitted assigns.
“Service Provider” means, collectively, (i) any current employee or individual who is a natural person consultant or independent contractor of any member of the Seller Group, in any case, who is identified by name in the censuses contained in Sections 3.18(j)(i) and 3.18(j)(ii) of the Seller Disclosure Schedule, and (ii) any current or former employee or individual who is a natural person consultant or independent contractor of the Target.
“Standard Software” means commercially available Computer Software that (a) is licensed on a non-exclusive basis under standard, non-negotiated terms, (b) is licensed for internal use only and is not redistributed with or incorporated into any Business Products and Services, and (c) involves annual payments by the Target or any of its Affiliates of $50,000 or less.
“Subsidiary” or “Subsidiaries” of any Person means any corporation, partnership, limited liability company, joint venture or other entity which such Person (i) directly or indirectly (either above or through or together with any other subsidiary) owns 50% or more of the shares or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, person or other legal entity or (ii) otherwise has the power to direct the business and policies of that corporation, person or other legal entity.
“Target Benefit Plan” means each Benefit Plan that is sponsored, maintained or entered into by the Target (excluding for the avoidance of doubt, any Seller Group Benefit Plan in which the Target is merely a participating employer).
“Target Owned IP” means all Intellectual Property Rights owned or purported to be owned, in whole or in part, (i) by the Target or (ii) by the Seller or any Seller Affiliate other than Target that will be assigned to the Target pursuant to the Seller IP Assignment Agreement.
“Target Material Adverse Effect” means any effect, change, fact, event, occurrence, circumstance, or effect (“Effect”) which individually or taken together with all other Effects has or would reasonably be expected to have a material adverse effect on (A) the ability of the Target to perform its obligations under this Agreement or (B) the business, condition (financial or otherwise), results of operations or operations of the Target; provided that solely with respect to clause (B), no Effect (by itself or taken together with any and all other Effects) to the extent that results from or arises out of or is related to any of the following shall constitute or be deemed to contribute to a “Target Material Adverse Effect”, or be taken into account in determining whether a “Target Material Adverse Effect” has occurred or may, would or could occur: (i) changes in general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global economy generally; (ii) changes in general conditions in the financial, credit, securities or capital markets in the United States or any other country or region in the world or changes in currency exchange rates or interest rates or currency fluctuations; (iii) changes in political, business or social conditions in the United States or any other country or region in the world, acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism), earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, weather conditions, epidemics,
pandemics and disease outbreaks or other health crisis or public health event, or the worsening of any of the foregoing, and other force majeure events, in each case in the United States or any other country or region in the world; (iv) changes generally affecting the industry in which the Target operates; (v) the negotiation, execution, delivery, performance, or announcement of this Agreement, the pendency of any investigation or challenge to the Transaction, or the consummation of the Transaction (including the adverse impact thereof on relationships with or the loss of any employees, suppliers, customers, advertisers, financing sources, licensors, licensees, stockholder, joint venture partner or any similar relationship, assets, or property interests); (vi) the taking of any action expressly required to be taken by this Agreement; (vii) changes in Law regulations, Orders, or other binding directives issued by any Governmental Authority or other legal or regulatory conditions (or the authoritative interpretation thereof), in each case, after the date hereof, though specifically excluding the implementation of any trade embargoes or amendments to any trade tariffs; (viii) changes in GAAP or other applicable accounting standards (or the authoritative interpretation thereof) after the date hereof; (ix) any failure, in and of itself, by the Target to meet internal or external projections or forecasts or revenue or earnings predictions or business plans (provided, that this clause (ix) shall not be construed as implying that Seller is making any representations and warranties with respect thereto, provided, further, that the cause or basis for the Target failing to meet such projections or forecasts or revenue or earnings predictions may be considered in determining the existence of a Target Material Adverse Effect unless such cause or basis is otherwise excluded by this definition); or (x) any adverse change in or effect on the business of the Target that is cured prior to the Closing; except, in the case of clauses (i), (ii), (iii), (iv), (vii) or (viii), to the extent the Target or the Business is disproportionately affected thereby relative to other similarly situated participants in the industries or markets in which the Target or the Business operates. For the avoidance of doubt, a Target Material Adverse Effect shall be measured only against past performance of the Target and not against any forward-looking statements, financial projections or forecasts of the Target.
“Target Software” means all Computer Software included in the Target Owned IP.
“Target Working Capital” means U.S.$2,200,000.
“Tax” or “Taxes” means any federal, state, local or foreign taxes, including all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, escheat, unclaimed property obligations, sales, use, transfer, registration, value added, alternative or add-on minimum, or other tax, charge, fee, levy or assessment of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Taxing Authority.
“Tax Return” means any return, declaration, report, claim for refund or information return or statement or attachment thereto, and including any amendment thereof, filed or required to be filed with a Taxing Authority in respect of any Taxes.
“Taxing Authority” means the IRS or any other Governmental Authority having jurisdiction with respect to any Tax.
“Technology” means technology, Computer Software, methods, techniques, processes, designs, design rules, inventions (whether or not patented or patentable), diagrams, plans, discoveries, ideas, concepts, methods, prototypes, specifications, schematics, formulae, compositions, communication protocols, algorithms, routines, lab notebooks, reports, network configurations and architectures, test vectors and procedures, protocols, works of authorship, physical mask works for semiconductor devices and mask sets, know-how, trade secrets and other proprietary information, software, data, databases and data collections, firmware, devices and hardware and other scientific or technical information, technology or materials, in whatever form (tangible or otherwise), but in all cases excluding Intellectual Property Rights.
“Trade Control Laws” means all statutory and regulatory requirements of any applicable jurisdictions related to export controls, antiboycott laws and regulations, trade embargoes, imports of goods and payment of customs duties and fees, including the Arms Export Control Act (22 U.S.C. § 1778), the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-4861), Section 999 of the Internal Revenue Code, the International Traffic in Arms Regulations (22 C.F.R. Parts 120–130), and the Export Administration Regulations (15 C.F.R. Parts 730-774), except to the extent inconsistent with U.S. law.
“Transaction” means the transactions contemplated by this Agreement and the other Transaction Agreements.
“Transaction Agreements” means this Agreement, the Non-disclosure Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement to which Purchaser, the Target or Seller is a party or to be executed by Purchaser, the Target or Seller in connection with the consummation of the Transaction.
“Transaction Expenses” means, to the extent incurred or payable as of the Closing and not paid prior to the Closing, without duplication, (i) all fees, costs and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees and expenses) incurred by or on behalf of, or paid or to be paid directly by the Target or any Person that the Target pays or reimburses or is otherwise legally obligated to pay or reimburse (excluding any such fees, costs and expenses incurred by or on behalf of Purchaser or any of its Affiliates) in connection with the negotiation, execution and consummation of the transactions contemplated by this Agreement and the other Transaction Agreements, (ii) all fees, costs, expenses and other obligations incurred in connection with obtaining the D&O Tail Policy pursuant to Section 7.7 other than the Purchaser D&O Tail Portion and (iii) all transaction, change of control, success, retention, or stay bonuses, severance or other similar payments, or other compensatory payments or obligations payable or provided to any Service Providers solely as a result of the consummation of the transactions contemplated by this Agreement (but excluding any payments pursuant to “double-trigger” arrangements resulting in payments or benefits provided upon an involuntary termination of employment by the Target or its Affiliates on or following the consummation of the
Closing) and the employer portion of any Taxes that are incurred by the Target or its Affiliates in connection with the payment of any amounts described in this clause (iii). For the avoidance of doubt, “Transaction Expenses” shall not include 50% of the Transfer Taxes or any amounts included in Working Capital.
“TSA” means the transitional services agreement substantially in the form attached hereto at Schedule C (subject to any amendments as agreed by Seller and Purchaser) to be entered into by Seller and Purchaser at Closing.
“Union” means any union, works council, employee association, or other employee representative or labor organization.
“Willful Breach” means with respect to any representation, warranty, covenant or other agreement set forth in this Agreement, a deliberate action or omission (a) where the breaching party knows such action or omission is a breach of such representation, warranty, agreement or covenant and (b) such action or omission constitutes a material breach of this Agreement.
“Working Capital” means (i) the current assets of the Target (excluding Cash, Restricted Cash, deferred Tax assets, and current income Tax assets) minus (ii) the current liabilities of the Target (excluding Indebtedness, Transaction Expenses, deferred Tax liabilities, and income Tax liabilities), in each case, determined on a consolidated basis in accordance with the Accounting Rules. An illustrative calculation of Working Capital as of October 31, 2024 is set forth on the Reference Closing Statement.
Accounting RefereeSection 1.4(c)(ii)
DeficitSection 1.4(d)(ii)
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized, as of the date first written above.
PURCHASER:
PDF SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:President and Chief Executive Officer
| SELLER: TELIT IOT SOLUTIONS INC By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
| TARGET: SecureWise LLC By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ |