Cayman Islands* |
6770 |
98-1575384 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Matthew R. Pacey Kirkland & Ellis LLP 609 Main Street Houston, Texas 77002 Tel: (713) 836 3600 |
Matthew Jacobson Rachel Phillips Ropes & Gray LLP Three Embarcadero Center San Francisco CA 94111-4006 Tel: (415) 315-6300 Fax: (415) 315-6350 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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Title of Each Class of Securities to be Registered |
Amount to be Registered(4) |
Proposed Maximum Offering Price Per Unit |
Proposed Maximum Aggregate Offering Price(1) |
Amount of Registration Fee | ||||
New SM Common Stock(1) |
40,625,000 |
$9.85(5) |
$400,156,250 |
$43,658(8) | ||||
New SM Common Stock(2) |
10,750,000 |
$11.50(6) |
$123,625,000 |
$13,488(8) | ||||
Warrants to purchase New SM Common Stock(3) |
10,750,000 |
$1.10(7) |
$11,825,250 |
$1,291(8) | ||||
Total |
$58,435(8)(9) | |||||||
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(1) |
The number of shares of common stock of New SM (as defined below) being registered represents (i) 32,500,000 Class A ordinary shares underlying units issued in Pathfinder’s (as defined below) initial public offering and, (ii) 8,125,000 Class B ordinary shares held by the Initial Shareholders (as defined below) to be described in the proxy statement/prospectus forming part of this registration statement (the “ proxy statement/prospectus ”). |
(2) |
Represents shares of common stock of New SM (“ New SM Common Stock ”) to be issued upon the exercise of (i) 6,500,000 warrants to purchase Class A ordinary shares underlying units issued in Pathfinder’s initial public offering (“public warrants ”) and (ii) 4,250,000 warrants to purchase Class A ordinary shares underlying units issued in a private placement simultaneously with the closing of Pathfinder’s initial public offering (“private placement warrants ”). The foregoing (i) and (ii), together the “warrants ”. The warrants will convert into warrants to acquire shares of New SM Common Stock in connection with the Domestication (as defined below). |
(3) |
The number of warrants to acquire shares of New SM Common Stock being registered represents (i) 6,500,000 public warrants and (ii) 4,250,000 private placement warrants. |
(4) |
Pursuant to Rule 416(a) of Securities Act of 1933, as amended (the “ Securities Act ”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(5) |
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A ordinary shares of Pathfinder on the Nasdaq Capital Market (“ Nasdaq ”) on August 6, 2021 ($9.85 per Class A ordinary share). This calculation is in accordance with Rule 457(f)(1) of the Securities Act. |
(6) |
Represents the exercise price of the warrants. |
(7) |
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Pathfinder public warrants on Nasdaq on August 6, 2021 ($1.10 per warrant). This calculation is in accordance with Rule 457(f)(1) of the Securities Act. |
(8) |
Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by $0.0001091. |
(9) |
Previously paid. |
* |
Immediately prior to the consummation of the Business Combination, Pathfinder Acquisition Corporation, a Cayman Islands exempted company (“ Pathfinder ”), intends to transfer by way of continuation from the Cayman Islands to Delaware and domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law and Part XII of the Cayman Islands Companies Act (as revised) (the “Domestication ”). All securities being registered will be issued by the continuing entity following the Domestication, which will be renamed “ServiceMax, Inc.” upon the consummation of the Domestication. As used herein, “New SM ” refers to Pathfinder after giving effect to the Domestication and the Business Combination. |
(a) | On the Closing Date, prior to the time at which the Merger (as defined below) becomes effective (the “ Effective Time ”), Pathfinder will change its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication ”), upon which Pathfinder will change its name to “ServiceMax, Inc.” (“New SM ”) (for further details, see “Proposal No. 2—The Domestication Proposal |
(b) | On the Closing Date, promptly following the Pre-Closing Reorganization of ServiceMax and the Domestication, Serve Merger Sub will merge with and into ServiceMax (the “Merger ”) at the Effective Time, with ServiceMax as the surviving company in the Merger and, after giving effect to such Merger, ServiceMax will be a wholly owned subsidiary of Pathfinder. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, each share of ServiceMax outstanding as of immediately prior to the Effective Time (other than any shares held by dissenting holders of shares of common stock of ServiceMax who demand appraisal of such shares and comply with Section 262 of the General Corporation Law of the State of Delaware and the shares of ServiceMax that are cancelled pursuant to the Business Combination Agreement) shall be automatically cancelled and |
extinguished and converted into the right to receive a number of shares of “New SM Common Stock”, based on an implied ServiceMax pre-transaction equity value of $1.425 billion. Furthermore, at the Effective Time, each restricted stock award and restricted stock unit award with respect to ServiceMax Common Stock issued pursuant to the Rollover Plan outstanding as of immediately prior to the Effective Time (including the restricted stock awards and the restricted stock unit awards with respect to the ServiceMax Common Stock holders of unvested profits interests and cash awards of ServiceMax JV pursuant to the Pre-Closing Reorganization) will remain subject to the Rollover Plan but will be converted into the right to receive New SM Common Stock in lieu of ServiceMax Common Stock. The market value of the shares to be issued could vary significantly from the market value as of the date of this proxy statement/prospectus. |
• | Proposal No. 1—The Business Combination Proposal RESOLVED Business Combination Agreement ”), by and among Pathfinder, Serve Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Pathfinder (“Serve Merger Sub ”), and ServiceMax, Inc., a Delaware corporation (“ServiceMax ”), a copy of which is attached to the proxy statement/prospectus as Annex A, pursuant to which, among other things, Pathfinder shall transfer by way of continuation from the Cayman Islands to Delaware and domesticate as a Delaware corporation, on the terms and subject to the conditions of the Business Combination Agreement, including by filing a certificate of domestication and deregistering as a Cayman Island exempt company, adopting the name “ServiceMax, Inc.”, (a) on the Closing Date, promptly following the Pre-Closing Reorganization of ServiceMax and the Domestication, Serve Merger Sub will merge with and into ServiceMax (the “Merger ”), with ServiceMax as the surviving company in the Merger and, after giving effect to such Merger, ServiceMax will be a wholly owned subsidiary of Pathfinder and (b) at the Effective Time, (i) each share of ServiceMax outstanding as of immediately prior to the Effective Time (other than any shares held by dissenting holders of shares of common stock of ServiceMax who demand appraisal of such shares and comply with Section 262 of the General Corporation Law of the State of Delaware and the shares of ServiceMax that are cancelled pursuant to the Business Combination Agreement) will be automatically cancelled and extinguished and converted into the right to receive a number of shares of New SM Common Stock, based on an implied ServiceMax pre-transaction equity value of $1.425 billion, and (ii) each restricted stock award and restricted stock unit award with respect to ServiceMax Common Stock issued pursuant to the Rollover Plan outstanding as of immediately prior to the Effective Time (including the restricted stock awards and the restricted stock unit awards with respect to the ServiceMax Common Stock holders of unvested profits interests and cash awards of ServiceMax JV pursuant to the Pre-Closing Reorganization) will remain subject to the Rollover Plan but will be converted into the right to receive New SM Common Stock in lieu of ServiceMax Common Stock, on the terms and subject to the conditions set forth in the Business Combination Agreement, certain related agreements (including the Subscription Agreements, Sponsor Letter Agreement, Company Transaction Support Agreement, Company Shareholder Transaction Support Agreement and the Registration and Shareholder Rights Agreement, each in the form attached to the proxy statement/prospectus as Annexes F, G, H, I and J, respectively), and the transactions contemplated thereby, be approved, ratified and confirmed in all respects. |
• | Proposal No. 2—The Domestication Proposal RESOLVED |
Revised) of the Cayman Islands and Section 388 of the General Corporation Law of the State of Delaware and, immediately upon being de-registered in the Cayman Islands, Pathfinder be continued and domesticated as a corporation under the laws of the state of Delaware and, conditional upon, and with effect from, the registration of Pathfinder as a corporation in the State of Delaware, the name of Pathfinder be changed from “ Pathfinder Acquisition Corporation” to “ServiceMax, Inc.” |
• | Proposal No. 3—The Charter Amendment Proposal—RESOLVED |
• | Advisory Governing Documents Proposals non-binding advisory basis, to approve the following material differences between the amended and restated memorandum and articles of association of Pathfinder (“Existing Governing Documents ”) and the proposed new certificate of incorporation, a copy of which is attached to the proxy statement/prospectus as Annex B (the “Proposed Certificate of Incorporation ”) and the proposed new bylaws, a copy of which is attached to the proxy statement/prospectus as Annex C (the “Proposed Bylaws ”) of “ServiceMax, Inc.” upon the Domestication (such proposals, collectively, the “Advisory Governing Documents Proposals ”). |
• | Proposal No. 4—Advisory Governing Documents Proposal A—RESOLVED non-binding advisory resolution, that the change in the authorized share capital of Pathfinder from (i) US$33,100.00 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) US$11,000 divided into 1,000,000,000 shares of common stock, par value $0.00001 per share, of New SM, and 100,000,000 shares of preferred stock, par value $0.00001 per share, of New SM, be approved. |
• | Proposal No. 5—Advisory Governing Documents Proposal B—RESOLVED, non-binding advisory resolution, that the authorization to the New SM Board to issue any or all shares of New SM Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New SM Board and as may be permitted by the Delaware General Corporation Law be approved. |
• | Proposal No. 6—Advisory Governing Documents Proposal C—RESOLVED, non-binding advisory resolution, that certain provisions of the certificate of incorporation of New SM that are subject to the Registration and Shareholder Rights Agreement be approved. |
• | Proposal No. 7—Advisory Governing Documents Proposal D—RESOLVED, non-binding advisory resolution, that the removal of the ability of New SM stockholders to take action by written consent in lieu of a meeting unless investment fund(s) affiliated with or managed by Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof, beneficially own a majority of the voting power of all of the then-outstanding shares of capital stock of New SM entitled to vote on such action, or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office be approved. |
• | Proposal No. 8—Advisory Governing Documents Proposal E—RESOLVED, non-binding advisory resolution, that the amendment and restatement of the Existing Governing Documents be approved and that all other changes necessary or, as mutually agreed in good faith by Pathfinder and ServiceMax, desirable in connection with the replacement of Existing Governing Documents with the Proposed Certificate of Incorporation and Proposed Bylaws as part of the Domestication (copies of which are attached to the proxy statement/prospectus as Annex B and Annex C, respectively), including (i) changing the post-Business Combination corporate name from “Pathfinder Acquisition Corporation” to “ServiceMax, Inc.” (which is expected to occur upon the consummation of the Domestication), (ii) making New SM’s corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States of |
America as the exclusive forum for litigation arising out of the Securities Act of 1933, as amended, and (iv) removing certain provisions related to Pathfinder’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination be approved. |
• | Proposal No. 9—Advisory Governing Documents Proposal F—RESOLVED, non-binding, advisory resolution, that the election of New SM not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders be approved. |
• | Proposal No. 10—The Nasdaq Proposal—RESOLVED |
• | Proposal No. 11—The Omnibus Incentive Plan Proposal RESOLVED |
• | Proposal No. 12—The ESPP Proposal RESOLVED |
• | Proposal No. 13—The Adjournment Proposal RESOLVED |
(i) | (a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares; |
(ii) | submit a written request to Continental, Pathfinder’s transfer agent, in which you (a) request that New SM redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
(iii) | deliver share certificates (if any) and other redemption forms (as applicable) to Continental, Pathfinder’s transfer agent, physically or electronically through The Depository Trust Company. |
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K-1 |
• | “Articles of Association” are to the second amended and restated articles of association of Pathfinder. |
• | “Business Combination” are to the Domestication, the Merger and other transactions contemplated by the Business Combination Agreement, collectively, including the Stronghold Private Placement; |
• | “Business Combination Agreement” are to that certain Business Combination Agreement, dated July 15, 2021, as amended and restated on August 11, 2021, by and among Pathfinder, ServiceMax and Serve Merger Sub, as amended; |
• | “Cayman Islands Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time; |
• | “Class A ordinary shares” are to the Class A ordinary shares, par value $0.0001 per share, of Pathfinder, which will automatically convert, on a one-for-one |
• | “Class B ordinary shares” are to the 8,125,000 Class B ordinary shares, par value $0.0001 per share, of Pathfinder outstanding as of the date of this proxy statement/prospectus that were initially issued to the Sponsor in a private placement prior to Pathfinder’s initial public offering and of which 75,000 were transferred to three of Pathfinder’s independent directors (25,000 each) in February 2021, and, in connection with the Domestication, will automatically convert, on a one-for-one |
• | “Closing” are to the closing of the Business Combination; |
• | “Closing Date” are to the date on which the Closing actually occurs; |
• | “Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Nasdaq Proposal and the Charter Amendment Proposal, collectively; |
• | “Continental” are to Continental Stock Transfer & Trust Company; |
• | “Domestication” are to the transfer by way of continuation and deregistration of Pathfinder from the Cayman Islands under the Cayman Islands Companies Act and the continuation and domestication of Pathfinder as a corporation incorporated in the State of Delaware in accordance with Section 388 of the Delaware General Corporation Law, pursuant to which Pathfinder’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware; |
• | “Effective Time” are to the time at which the Merger becomes effective. |
• | “ESPP” are to the ServiceMax, Inc. 2021 Employee Stock Purchase Plan to be considered for adoption and approval by the shareholders pursuant to the ESPP Proposal; |
• | “extraordinary general meeting” are to the extraordinary general meeting of Pathfinder at , on , 2021, at , or at such other time, on such other date and at such other place to which the meeting may be adjourned; |
• | “Existing Governing Documents” are to the Memorandum of Association and Articles of Association of Pathfinder; |
• | “HGGC” are to HGGC, LLC, a Delaware limited liability company; |
• | “Industry Ventures” are to Industry Ventures, L.L.C., a Delaware limited liability company |
• | “initial public offering” are to Pathfinder’s initial public offering that was consummated on February 19, 2021; |
• | “Omnibus Incentive Plan” are to the ServiceMax, Inc. 2021 Omnibus Incentive Plan to be considered for adoption and approval by the shareholders pursuant to the Omnibus Incentive Plan Proposal; |
• | “Initial Shareholders” are to Sponsor and each of Pathfinder’s directors and officers; |
• | “Memorandum of Association” are to the second amended and restated memorandum of association of Pathfinder; |
• | “Merger” are to the merger of Serve Merger Sub with and into ServiceMax pursuant to the Business Combination Agreement, with ServiceMax as the surviving company in the Merger and, after giving effect to such Merger, ServiceMax becoming a wholly owned subsidiary of New SM; |
• | “Nasdaq” are to the Nasdaq Capital Market; |
• | “New SM” are to ServiceMax, Inc., a Delaware corporation, upon and after the consummation of the Domestication and the Business Combination; |
• | “New SM Board” are to the board of directors of New SM; |
• | “New SM Common Stock” are to the common stock, par value $0.00001 per share, of New SM; |
• | “New SM Preferred Stock” are to the preferred stock, par value $0.00001 per share, of New SM; |
• | “ordinary shares” are to Pathfinder’s Class A ordinary shares and Class B ordinary shares; |
• | “Pathfinder,” “we,” “us” or “our” are to Pathfinder Acquisition Corporation, a Cayman Islands exempted company, prior to the consummation of the Domestication and the Business Combination; |
• | “Pathfinder Board” are to Pathfinder’s board of directors; |
• | “private placement” are to the private placement of the private placement warrants by Pathfinder to the Sponsor that was consummated as part of the closing of Pathfinder’s initial public offering, at a price of $2.00 per private placement warrant, generating gross proceeds to Pathfinder of $8.5 million. |
• | “private placement warrants” are to the 4,250,000 private placement warrants outstanding as of the date of this proxy statement/ prospectus that were issued to the Sponsor in the private placement, each exercisable to purchase one Class A ordinary share at $11.50 per share, which are substantially identical to the public warrants sold as part of the units in the initial public offering, subject to certain limited exceptions; |
• | “pro forma” are to giving pro forma effect to the Business Combination, including the Merger and the Stronghold Private Placement; |
• | “Proposed Bylaws” are to the proposed bylaws of New SM to be effective upon the Domestication attached to this proxy statement/prospectus as Annex C; |
• | “Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New SM to be effective upon the Domestication attached to this proxy statement/prospectus as Annex B; |
• | “Proposed Governing Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws; |
• | “public shareholders” are to holders of public shares, whether acquired in Pathfinder’s initial public offering or acquired in the secondary market; |
• | “public shares” are to the currently outstanding 32,500,000 Class A ordinary shares of Pathfinder, whether acquired in Pathfinder’s initial public offering or acquired in the secondary market; |
• | “public warrants” are to the currently outstanding 6,500,000 redeemable warrants to purchase Class A ordinary shares of Pathfinder that were issued by Pathfinder in its initial public offering; |
• | “redemption” are to each redemption of public shares for cash pursuant to the Existing Governing Documents; |
• | “SEC” are to the Securities and Exchange Commission; |
• | “Serve Merger Sub” are to Serve Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Pathfinder. |
• | “Securities Act” are to the Securities Act of 1933, as amended; |
• | “ServiceMax” are to ServiceMax, Inc., a Delaware corporation, prior to the consummation of the Business Combination; |
• | “ServiceMax Common Stock” are to the common stock, par value $0.01 per share, of ServiceMax; |
• | “ServiceMax JV” are to ServiceMax JV, LP, a Delaware limited partnership and the parent entity of ServiceMax; |
• | “ServiceMax Shareholders” are to the existing shareholders of ServiceMax, including Silver Lake and current and former management and other services providers of ServiceMax; |
• | “Silver Lake” are to SLP Snowflake Aggregator, L.P., a Delaware limited partnership., the general partner of which is an investment vehicle affiliated with Silver Lake. Silver Lake is a global technology investment firm, with more than $83 billion in combined assets under management and committed capital, and a team of investment and operating professionals based in North America, Europe and Asia; |
• | “Sponsor” are to Pathfinder Acquisition LLC, a Delaware limited liability company, which is a partnership among affiliates of HGGC and Industry Ventures; |
• | “Stronghold Private Placement” are to the transactions contemplated by the Subscription Agreements, pursuant to which the Stronghold Private Placement Investors have collectively committed to subscribe for an aggregate of up to 1,037,500 shares of New SM Common Stock for an aggregate purchase price of up to $10,375,000 to be consummated in connection with and immediately prior to Closing; |
• | “Stronghold Private Placement Investors” are to the investors participating in the Stronghold Private Placement, collectively; |
• | “Subscription Agreements” are to the subscription agreements, as may be amended, entered into by Pathfinder, ServiceMax and each of the Stronghold Private Placement Investors in connection with the Stronghold Private Placement; |
• | “transfer agent” are to Continental, Pathfinder’s transfer agent; |
• | “trust account” are to the trust account established at the consummation of Pathfinder’s initial public offering that holds the proceeds of the initial public offering and is maintained by Continental, acting as trustee; |
• | “units” are to the units of Pathfinder, each unit representing one Class A ordinary share and one-fifth of one warrant to acquire one Class A ordinary share, that were offered and sold by Pathfinder in its initial public offering; and |
• | “warrants” are to the public warrants and the private placement warrants. |
• | Pathfinder’s ability to complete the Business Combination with ServiceMax or, if Pathfinder does not consummate such Business Combination, any other initial business combination; |
• | satisfaction or waiver of the conditions to the Business Combination including, among others; (i) the applicable waiting period under the Hart-Scott-Rodino Act of 1976 (the “HSR Act”); (ii) no judicial or governmental order, prohibition or other legal restraint preventing the consummation of the transactions contemplated by the Business Combination Agreement; (iii) this Registration Statement on Form S-4 having become effective; (iv) the shareholders of Pathfinder and ServiceMax having consented to the Business Combination Agreement and consummation of the transactions contemplated therein; (v) Pathfinder having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the Stronghold Private Placement; (vi) the approval by Nasdaq of Pathfinder’s listing application in connection with the Business Combination; (vii) the aggregate cash proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement are equal to or greater than $162,500,000, after payment of any Pathfinder shareholder redemptions but before payment of Pathfinder’s unpaid expenses and ServiceMax’s unpaid expenses; and (viii) the aggregate cash proceeds available for release from the trust account in connection with the transaction contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement, being equal to or greater than $225,000,000. |
• | the projected financial information, growth rate and market opportunity of New SM; |
• | the ability to obtain and/or maintain the listing of the New SM Common Stock and the warrants on the Nasdaq, and the potential liquidity and trading of such securities; |
• | the effect of the announcement and consummation of the proposed Business Combination on the current plans and operations of ServiceMax; |
• | the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees; |
• | costs related to the proposed Business Combination; |
• | New SM’s ability to raise financing in the future; |
• | New SM’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the completion of the Business Combination; |
• | ServiceMax’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
• | ServiceMax’s future financial performance; |
• | the ability of New SM to expand or maintain its existing customer base; |
• | the effect of global economic conditions or political transitions on ServiceMax’s customers and their ability to continue to purchase ServiceMax products; and |
• | Pathfinder’s ability to consummate the Business Combination. |
A: | Pathfinder shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Business Combination Agreement and approve the transactions contemplated thereby, including the Business Combination. In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things, in connection with the Domestication, on the Closing Date prior to the Effective Time, (i) Pathfinder will be renamed “ServiceMax, Inc.”, and (ii) each share of ServiceMax outstanding as of immediately prior to the Effective Time (other than any shares held by dissenting holders of shares of common stock of ServiceMax who demand appraisal of such shares and comply with Section 262 of the General Corporation Law of the State of Delaware and the shares of ServiceMax that are cancelled pursuant to the Business Combination Agreement) will be exchanged for shares of New SM Common Stock, based on an implied ServiceMax pre-transaction equity value of $1.425 billion. Furthermore, at the Effective Time each restricted stock award and restricted stock unit award with respect to ServiceMax Common Stock issued pursuant to the Rollover Plan outstanding as of immediately prior to the Effective Time (including the restricted stock awards and the restricted stock unit awards with respect to ServiceMax Common Stock issued to holders of unvested profits interests and cash awards of ServiceMax JV pursuant to the Pre-Closing Reorganization) will remain subject to the Rollover Plan but will be converted into the right to receive New SM Common Stock in lieu of ServiceMax Common Stock. See “Business Combination Proposal |
Q: |
What proposals are shareholders of Pathfinder being asked to vote upon? |
A: | At the extraordinary general meeting, Pathfinder is asking holders of its ordinary shares to consider and vote upon thirteen (13) separate proposals: |
• | a proposal to approve by ordinary resolution and adopt the Business Combination Agreement, including the Merger, and the transactions contemplated thereby: |
• | a proposal to approve by special resolution the Domestication; |
• | a proposal to approve by special resolution the Proposed Governing Documents; |
• | the following six (6) separate proposals to approve by special resolution (unless stated otherwise) the following material differences between the Existing Governing Documents and the Proposed Governing Documents: |
○ |
to authorize by way of ordinary resolution the change in the authorized share capital of Pathfinder from (i) US$33,100.00 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) US$11,000 divided into 1,000,000,000 shares New SM Common Stock and 100,000,000 shares of New SM Preferred Stock; |
○ |
to authorize the New SM Board to issue any or all shares of New SM Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New SM Board and as may be permitted by the DGCL; |
○ |
to provide that certain provisions of the certificate of incorporation of New SM are subject to the Registration and Shareholder Rights Agreement; |
○ |
to authorize the removal of the ability of New SM stockholders to take action by written consent in lieu of a meeting unless investment fund(s) affiliated with or managed by Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof, beneficially own a majority of the voting power of all of the then-outstanding shares of capital stock of New SM entitled to vote on such action, or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office; |
○ |
to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by Pathfinder and ServiceMax, desirable in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication; |
○ |
to authorize the election of New SM to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholder; |
• | a proposal to approve by ordinary resolution the issuance of shares of New SM Common Stock in connection with the Business Combination and the Stronghold Private Placement in compliance with the Nasdaq Listing Rules; |
• | a proposal to approve and adopt by ordinary resolution the Omnibus Incentive Plan; |
• | a proposal to approve and adopt by ordinary resolution the ESPP; and |
• | a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. |
Q: |
Why is Pathfinder proposing the Business Combination? |
A: | Pathfinder is a blank check company incorporated on December 18, 2020, as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although Pathfinder may pursue an acquisition opportunity in any business, industry, sector or geographical location, for purposes of consummating the initial business combination, Pathfinder has focused on a growth-oriented technology or technology-enabled target that is at a key inflection point in its evolution and a beneficiary of secular tailwinds in one of several rapidly changing segments of the global economy. Pathfinder is not permitted under its Existing Governing Documents to effect a business combination solely with a blank check company or a similar type of company with nominal operations. |
Q: |
Did the Pathfinder Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
A: | No. The Pathfinder Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, Pathfinder’s management, the members of the Pathfinder Board and the other representatives of Pathfinder have substantial experience in evaluating the operating and financial merits of companies similar to ServiceMax and reviewed certain financial information of ServiceMax and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of Pathfinder’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, Pathfinder is relying solely on the judgment of the Pathfinder Board in valuing ServiceMax’s business and investors will be assuming the risk that the Pathfinder Board may not have properly valued such business. |
Q: |
What will ServiceMax’s equityholders receive in return for the Business Combination with Pathfinder? |
A: | On the Closing Date, promptly following the consummation of the Domestication, Serve Merger Sub will merge with and into ServiceMax, with ServiceMax as the surviving company in the Merger and, after giving effect to such Merger, ServiceMax will be a wholly owned subsidiary of Pathfinder. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, each share of ServiceMax outstanding as of immediately prior to the Effective Time (other than any shares held by dissenting holders of shares of common stock of ServiceMax who demand appraisal of such shares and comply with Section 262 of the General Corporation Law of the State of Delaware and the shares of ServiceMax that are cancelled pursuant to the Business Combination Agreement) will be exchanged for shares of New SM Common Stock, based on an implied ServiceMax pre-transaction equity value of $1.425 billion. Furthermore, at the Effective Time, each restricted stock award and restricted stock unit award with respect to ServiceMax Common Stock issued pursuant to the Rollover Plan outstanding as of immediately prior to the Effective Time (including the restricted stock awards and the restricted stock unit awards with respect to ServiceMax Common Stock issued to holders of unvested profits interests and cash awards of ServiceMax JV pursuant to the Pre-Closing Reorganization) will remain subject to the Rollover Plan but will be converted into the right to receive New SM Common Stock in lieu of ServiceMax Common Stock. The market value of the shares to be issued could vary significantly from the market value as of the date of this proxy statement/prospectus. |
Q: |
How will the combined company be managed following the Business Combination? |
A: | Following the Closing, it is expected that the New SM Board will initially consist of ten directors, which will be divided as evenly as practicable into three classes (Class I, II and III). Pursuant to the Registration |
and Shareholder Agreement, upon the Closing, the New SM Board will initially consist of up to nine individuals designed by Silver Lake (including a sufficient quantity of independent directors as is required to meet the requirements of the SEC and Nasdaq) and one individual designated by Sponsor, who shall be David Chung. Please see the section entitled “ Management of New SM Following the Business Combination |
Q: |
What equity stake will current Pathfinder shareholders and current equityholders of ServiceMax hold in New SM immediately after the consummation of the Business Combination? |
A: | As of the date of this proxy statement/prospectus, there are (i) 32,500,000 Class A ordinary shares outstanding underlying units issued in Pathfinder’s initial public offering, and (ii) 8,125,000 Class B ordinary shares outstanding held by Pathfinder’s Initial Shareholders. As of the date of this proxy statement/prospectus, there are outstanding 4,250,000 private placement warrants held by the Sponsor and 6,500,000 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Merger, will entitle the holder thereof to purchase one share of New SM Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination or the Stronghold Private Placement and assuming that none of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination), Pathfinder’s fully diluted share capital, giving effect to the exercise of all of the private placement warrants and public warrants, would be 51,375,000 ordinary shares. |
Share Ownership in New SM |
||||||||
No redemptions |
Maximum redemptions(1) |
|||||||
Percentage of Outstanding Shares |
Percentage of Outstanding Shares |
|||||||
Pathfinder public shareholders(1)(2) |
19.6 | % | 14.9 | % | ||||
Sponsor and other initial shareholders(3) |
6.2 | % | 6.2 | % | ||||
ServiceMax Stockholders(2)(4) |
73.7 | % | 78.3 | % | ||||
Stronghold Private Placement Investors |
0.5 | % | 0.6 | % |
(1) | Assumes that 33.96% of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination, which is the maximum amount of redemptions while still satisfying the condition to the consummation of the Business Combination that proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement be equal to or greater than $225,000,000. |
(2) | Includes 6,500,000 public warrants as if fully exercised. |
(3) | Includes 4,250,000 private placement warrants as if fully exercised. |
(4) | Includes shares owned by Silver Lake as well as stock awards issued in respect of Rollover Plan. |
Q: |
Why is Pathfinder proposing the Domestication? |
A: | The Pathfinder Board believes that there are significant advantages to Pathfinder that will arise as a result of a change of its domicile to Delaware. Further, the Pathfinder Board believes that any direct benefit that the Delaware General Corporation Law (the “ DGCL ”) provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The Pathfinder Board believes that there are several reasons why transfer by way of continuation to Delaware is in the best interests of Pathfinder and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors, each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal—Reasons for the Domestication |
Q: |
What amendments will be made to the current constitutional documents of Pathfinder? |
A: | The consummation of the Business Combination is conditional, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, Pathfinder’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and replace Pathfinder’s Existing Governing Documents, in each case, under Cayman Islands law with the Proposed Governing Documents, in each case, under the DGCL, which differ from the Existing Governing Documents in the following material respects: |
Existing Governing Documents |
Proposed Governing Documents | |||
Authorized Shares (Advisory Governing Documents Proposal A) |
The share capital under the Existing Governing Documents is US$33,100.00 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. See paragraph 7 of the Memorandum of Association. |
The Proposed Governing Documents authorize US$11,000 divided into 1,000,000,000 shares New SM Common Stock and 100,000,000 shares of New SM Preferred Stock. See Article V of the Proposed Certificate of Incorporation. | ||
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent Advisory Governing Documents Proposal B) |
The Existing Governing Documents authorize the issuance of 1,000,000 preference shares with par value US$0.0001 per share and with such designation, | The Proposed Governing Documents authorize the board of directors to issue all or any shares of preferred stock in one or more series and to fix for each such |
Existing Governing Documents |
Proposed Governing Documents | |||
rights and preferences as may be determined from time to time by the Pathfinder Board. Accordingly, the Pathfinder Board is empowered under the Existing Governing Documents, without shareholder approval, to issue preference shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares. See paragraph 7 of the Memorandum of Association and Article 8 of the Articles of Association. |
series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the board of directors may determine. See Article V subsection B of the Proposed Certificate of Incorporation. | |||
Registration and Shareholder Rights Agreement Advisory Governing Documents Proposal C |
The Existing Governing Documents are not subject to any director composition agreement. | The Proposed Governing Documents provide that certain provisions therein are subject to the Registration and Shareholder Rights Agreement. See Article VII subsections 3, 4 and 5 of the Proposed Certificate of Incorporation. | ||
Shareholder/Stockholder Written Consent In Lieu of a Meeting Advisory Governing Documents Proposal D |
The Existing Governing Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution. See Article 1 of our Articles of Association. |
The Proposed Governing Documents allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting, unless Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof owns a majority of the voting power of the shares of capital stock of New SM then outstanding or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office. See Article VI subsection 1 of the Proposed Certificate of Incorporation. | ||
Corporate Name Advisory Governing Documents Proposal E |
The Existing Governing Documents provide the name of | The Proposed Governing Documents will provide that the |
Existing Governing Documents |
Proposed Governing Documents | |||
the company is “Pathfinder Acquisition Corporation” See paragraph 1 of our Memorandum of Association. |
name of the corporation will be “ServiceMax, Inc.” See Article I of the Proposed Certificate of Incorporation. | |||
Perpetual Existence Advisory Governing Documents Proposal E |
The Existing Governing Documents provide that if we do not consummate a business combination (as defined in the Existing Governing Documents) by February 19, 2023 (twenty-four months after the closing of Pathfinder’s initial public offering), Pathfinder will cease all operations except for the purposes of winding up and will redeem the shares issued in Pathfinder’s initial public offering and liquidate its trust account. See Article 163 of our Articles of Association. |
The Proposed Governing Documents do not include any provisions relating to New SM’s ongoing existence; the default under the DGCL will make New SM’s existence perpetual. This is the default rule under the DGCL. | ||
Exclusive Forum Advisory Governing Documents Proposal E |
The Existing Governing Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation. | The Proposed Governing Documents adopt Delaware as the exclusive forum for certain stockholder litigation and the United States federal district courts as the exclusive forum for litigation arising out of the Securities Act. See Article XIII of the Proposed Certificate of Incorporation. | ||
Provisions Related to Status as Blank Check Company ( Advisory Governing Documents Proposal E |
The Existing Governing Documents set forth various provisions related to our status as a blank check company prior to the consummation of a business combination. See Articles 156 - 170 of our Articles of Association. |
The Proposed Governing Documents do not include such provisions related to our status as a blank check company, which no longer will apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time. | ||
Takeovers by Interested Stockholders (Advisory Governing Documents Proposal F |
The Existing Governing Documents do not provide restrictions on takeovers of Pathfinder by a related shareholder following a business combination. | The Proposed Governing Documents provide that New SM will not be governed by Section 203 of the DGCL. See Article XII of the Proposed Certificate of Incorporation. |
Q: |
How will the Domestication affect my ordinary shares, warrants and units? |
A: | In connection with the Domestication, on the Closing Date prior to the Effective Time (as defined below): (i) each issued and outstanding Class A ordinary share and each issued and outstanding Class B ordinary share, of Pathfinder will be converted into one share of New SM Common Stock; (ii) each issued and outstanding whole warrant to purchase Class A ordinary shares of Pathfinder will automatically represent the right to purchase one share of New SM Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the Pathfinder warrant agreement; (iii) the governing documents of Pathfinder will be amended and restated and become the certificate of incorporation and the bylaws of New SM as described in this proxy statement/prospectus; and (iv) Pathfinder’s name will change to “ServiceMax, Inc.” In connection with clauses (i) and (ii) of this paragraph, each issued and outstanding unit of Pathfinder that has not been previously separated into the underlying Class A ordinary shares of Pathfinder and the underlying warrants of Pathfinder prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New SM Common Stock and one-fifth of one warrant representing the right to purchase one share of New SM Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the Pathfinder warrant agreement. See “Domestication Proposal |
Q: |
What are the U.S. federal income tax consequences of the Domestication? |
A: | As discussed more fully under “ U.S. Federal Income Tax Considerations tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code ”). Such opinion of counsel is based on, and subject to, customary assumptions, qualifications and limitations, and the assumptions, qualifications and limitations discussed more fully under “U.S. Federal Income Tax Considerations” and in the opinion included as Exhibit 8.1 hereto, as well as representations of Pathfinder. However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as Pathfinder, this result is not entirely clear. In the case of a transaction, such as the Domestication, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F), U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders |
• | a U.S. Holder whose public shares have a fair market value of less than $50,000 on the date of the Domestication generally should not recognize any gain or loss and should not be required to include any part of Pathfinder’s earnings in income; |
• | a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of |
our stock generally should recognize gain (but not loss) on the exchange of public shares for shares of New SM Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and |
• | a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock generally should be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend by virtue of the dividends received deduction for foreign-sourced dividends of foreign corporations under Section 245A of the Code. |
Q: |
Do I have redemption rights? |
A: | If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal How do I exercise my redemption rights? |
Q: |
How do I exercise my redemption rights? |
A: | In connection with the proposed Business Combination, pursuant to the Existing Governing Documents, Pathfinder’s public shareholders may request that Pathfinder redeem all or a portion of such public shares for cash if the Business Combination is consummated. If you are a public shareholder and wish to exercise your right to redeem the public shares, you must: |
(i) | (a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
(ii) | submit a written request to Continental, Pathfinder’s transfer agent, in which you (a) request that we redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
(iii) | deliver your share certificates (if any) and other redemption forms (as applicable) to Continental, our transfer agent, physically or electronically through The Depository Trust Company (“ DTC ”). |
Q: |
If I am a holder of units, can I exercise redemption rights with respect to my units? |
A: | No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, Pathfinder’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. You are requested to cause your public shares to be separated and your share certificates (if any) and other redemption forms (as applicable) delivered to Continental, Pathfinder’s transfer agent, by , on , 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares. |
Q: |
What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | We expect that a holder of our public shares that exercises its redemption rights to receive cash from the trust account in exchange for its shares of New SM Common Stock will generally be treated as selling such shares of New SM Common Stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of shares of New SM Common Stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants) prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “ U.S. Federal Income Tax Considerations. |
Q: |
What happens to the funds deposited in the trust account after consummation of the Business Combination? |
A: | Following the closing of our initial public offering, an amount equal to $325,000,000 ($10.00 per unit) of the net proceeds from our initial public offering and the sale of the private placement warrants was placed in the trust account. As of , funds in the trust account totaled $ . These funds will remain in the trust account, except for the withdrawal of interest earned on the funds held in the trust account to pay taxes, if any, until the earliest of (i) the completion of a business combination (including the closing of the Business Combination) or (ii) the redemption of all of the public shares if we are unable to complete a business combination by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law. |
Q: |
What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights? |
A: | Pathfinder’s public shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders. However, a condition to the consummation of the Business Consummation is that the aggregate cash proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement, is equal to or greater than $225,000,000. |
Q: |
What conditions must be satisfied to complete the Business Combination? |
A: | The consummation of the Business Combination is conditioned upon, among other things, (i) the applicable waiting period under the HSR Act relating to the transactions contemplated by the Business Combination Agreement having expired or been terminated; (ii) no judicial or governmental order, prohibition or other legal restraint preventing the consummation of the transactions contemplated by the Business Combination Agreement; (iii) this Registration Statement on Form S-4 having become effective; (iv) the shareholders of Pathfinder and ServiceMax having consented to the Business Combination Agreement and consummation of the transactions contemplated therein; (v) Pathfinder having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the Stronghold Private Placement; (vi) the approval by Nasdaq of Pathfinder’s listing application in connection with the Business Combination; (vii) the aggregate cash proceeds available for release from the trust |
account in connection with the transactions contemplated in the Business Combination Agreement are equal to or greater than $162,500,000, after payment of any Pathfinder shareholder redemptions but before payment of Pathfinder’s unpaid expenses and ServiceMax’s unpaid expenses; and (viii) the aggregate cash proceeds available for release from the trust account in connection with the transaction contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement, being equal to or greater than $225,000,000. Therefore, unless these conditions are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated. |
Q: |
When do you expect the Business Combination to be completed? |
A: | The consummation of the Business Combination is conditioned upon, among other things, (i) the applicable waiting period under the HSR Act relating to the transactions contemplated by the Business Combination Agreement having expired or been terminated; (ii) no judicial or governmental order, prohibition or other legal restraint preventing the consummation of the transactions contemplated by the Business Combination Agreement; (iii) this Registration Statement on Form S-4 having become effective; (iv) the shareholders of Pathfinder and ServiceMax having consented to the Business Combination Agreement and consummation of the transactions contemplated therein; (v) Pathfinder having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the Stronghold Private Placement; (vi) the approval by Nasdaq of Pathfinder’s listing application in connection with the Business Combination; (vii) the aggregate cash proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement are equal to or greater than $162,500,000, after payment of any Pathfinder shareholder redemptions but before payment of Pathfinder’s unpaid expenses and ServiceMax’s unpaid expenses; and (viii) the aggregate cash proceeds available for release from the trust account in connection with the transaction contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement, being equal to or greater than $225,000,000. Therefore, unless these conditions are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated. |
Q: |
What happens if the Business Combination is not consummated? |
A: | Pathfinder will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Business Combination Agreement. If Pathfinder is not able to consummate the Business Combination with ServiceMax nor able to complete another business combination by February 19, 2023, Pathfinder will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to Pathfinder to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Pathfinder’s remaining shareholders and the Pathfinder Board, liquidate and dissolve, subject in the cases of clauses (ii) and (iii), to Pathfinder’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable laws. |
Q: |
Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication? |
A: | Neither Pathfinder’s shareholders nor Pathfinder warrant holders have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL. |
Q: |
What do I need to do now? |
A: | You should read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder and/or warrant holder. Pathfinder shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card. |
Q: |
How do I vote? |
A: | If you were a holder of record of ordinary shares on , 2021, the record date for the extraordinary general meeting, you may vote with respect to the proposals in person or virtually at the extraordinary general meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. |
Q: |
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If you decide to vote, you should provide instructions to your broker, bank or other nominee on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee. |
Q: |
When and where will the extraordinary general meeting be held? |
A: | The extraordinary general meeting will be held at , Eastern Time, on , 2021, at , and virtually live via webcast at , or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. |
Q: |
How will the COVID-19 pandemic impact in-person voting at the General Meeting? |
A: | Pathfinder intends to hold the extraordinary general meeting in person. However, Pathfinder is sensitive to the public health and travel concerns its shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (COVID-19) situation. As a result, Pathfinder may impose additional procedures or limitations on meeting attendees. Pathfinder plans to announce any such updates in a press release filed with the SEC and on its proxy website at , and Pathfinder encourages you to check this website prior to the meeting if you plan to attend. |
Q: |
What impact will the COVID-19 Pandemic have on the Business Combination? |
A: | Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the business of Pathfinder and ServiceMax, and there is no guarantee that efforts by Pathfinder and ServiceMax to address the adverse impacts of the coronavirus will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. If Pathfinder or ServiceMax are unable to recover from a business disruption on a timely basis, the Business Combination and New SM’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak and become more costly. Each of Pathfinder and ServiceMax may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations. |
Q: |
Who is entitled to vote at the extraordinary general meeting? |
A: | We have fixed , 2021 as the record date for the extraordinary general meeting. If you were a shareholder of Pathfinder at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he, she or they is present in person or is represented by proxy at the extraordinary general meeting. |
Q: |
How many votes do I have? |
A: | Each Pathfinder shareholder is entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were ordinary shares issued and outstanding, of which were issued and outstanding public shares. |
Q: |
What constitutes a quorum? |
A: | A quorum of Pathfinder shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders holding at least a majority of the paid up voting share capital of Pathfinder entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, ordinary shares would be required to achieve a quorum for each proposal contained in this proxy statement. |
Q: |
What vote is required to approve each proposal at the extraordinary general meeting? |
A: | The following votes are required for each proposal at the extraordinary general meeting: |
(i) | Business Combination Proposal: |
(ii) | Domestication Proposal: two-thirds (2/3) of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. |
(iii) | Charter Amendment Proposal: two-thirds (2/3) of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting vote at the extraordinary general meeting. |
(iv) | Advisory Governing Documents Proposals: |
(v) | Nasdaq Proposal: |
(vi) | Omnibus Incentive Plan Proposal: |
(vii) | ESPP Proposal: |
(viii) | Adjournment Proposal: |
Q: |
What are the recommendations of the Pathfinder Board? |
A: | The Pathfinder Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of Pathfinder and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Charter Amendment Proposal, “FOR” each of the separate Advisory Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Omnibus Incentive Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. |
Q: |
How do Sponsor and the other Initial Shareholders intend to vote their shares? |
A: | Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Initial Shareholders have agreed to vote all of their shares in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Initial Shareholders own approximately 20.0% of the issued and outstanding ordinary shares. As a result, in addition to the Initial Shareholder’s ordinary shares, Pathfinder would need 12,187,501 or approximately 37.5% (assuming all issued and outstanding ordinary shares are voted), or 2,031,251 or approximately 6.25% (assuming only the minimum number of ordinary shares representing a quorum are voted) of the issued and outstanding ordinary shares to be voted in favor of the business combination in order to have the business combination approved. |
Q: |
What happens if I sell my Pathfinder ordinary shares before the extraordinary general meeting? |
A: | The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting. |
Q: |
May I change my vote after I have mailed my signed proxy card? |
A: | Yes. Shareholders may send a later-dated, signed proxy card to Pathfinder’s Chief Executive Officer at the address set forth below so that it is received by the Chief Executive Officer prior to the vote at the extraordinary general meeting (which is scheduled to take place on , 2021) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to the Chief Executive Officer, which must be received by the Chief Executive Officer prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote. |
Q: |
What happens if I fail to take any action with respect to the extraordinary general meeting? |
A: | If you fail to vote with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder and/or warrant holder of New SM. If you fail to vote with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder and/or warrant holder of Pathfinder. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination. |
Q: |
What should I do if I receive more than one set of voting materials? |
A: | Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares. |
Q: |
Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting? |
A: | Pathfinder will pay the cost of soliciting proxies for the extraordinary general meeting. Pathfinder has engaged Morrow Sodali, LLC to assist in the solicitation of proxies for the extraordinary general meeting. Pathfinder has agreed to pay Morrow Sodali, LLC a fee of $32,500, plus disbursements, and will reimburse Morrow Sodali, LLC for its reasonable out-of-pocket |
Q: |
Where can I find the voting results of the extraordinary general meeting? |
A: | The preliminary voting results will be announced at the extraordinary general meeting. Pathfinder will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting. |
Q: |
Who can help answer my questions? |
A: | If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact: |
• | Advisory Governing Documents Proposal A |
• | Advisory Governing Documents Proposal B |
• | Advisory Governing Documents Proposal C |
• | Advisory Governing Documents Proposal D |
by Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof, beneficially own a majority of the voting power of all of the then-outstanding shares of capital stock of New SM entitled to vote on such action, or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office. |
• | Advisory Governing Documents Proposal E |
• | Advisory Governing Documents Proposal F |
• | Meets the acquisition criteria that Pathfinder had established to evaluate prospective business combination targets. |
• | Exposure to an attractive market. |
• | Market positioning. |
• | Attractive financial profile |
• | Potential for accelerating organic growth. |
• | Experienced management team with strong sponsorship. |
• | Established strategic partnerships. |
• | Results of due diligence. |
• | Financial analysis conducted by Pathfinder’s management team and valuation. |
• | Other alternatives. |
• | Negotiated transaction. |
• | Benefits Not Achieved. |
• | Liquidation of Pathfinder. |
• | Redemption risk. |
• | Exclusivity. |
• | Shareholder vote. |
• | Future financial performance. |
• | Risk that the LiquidFrameworks acquisition may not be completed. |
• | Post-Business Combination corporate governance; terms of the Registration and Shareholder Rights Agreement. |
• | Limitations of review. |
• | Closing conditions. |
• | Litigation. |
• | Fees and expenses. |
• | Other risks. |
Share Ownership in New SM |
||||||||
No redemptions |
Maximum redemptions(1) |
|||||||
Percentage of Outstanding Shares |
Percentage of Outstanding Shares |
|||||||
Pathfinder public shareholders(1)(2) |
19.6 | % | 14.9 | % | ||||
Sponsor and other initial shareholders(3) |
6.2 | % | 6.2 | % | ||||
ServiceMax Stockholders(2)(4) |
73.7 | % | 78.3 | % | ||||
Stronghold Private Placement Investors |
0.5 | % | 0.6 | % |
(1) | Assumes that 33.96% of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination, which is the maximum amount of redemptions while still satisfying the condition to the consummation of the Business Combination that proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement be equal to or greater than $225,000,000. |
(2) | Includes 6,500,000 public warrants as if fully exercised. |
(3) | Includes 4,250,000 private placement warrants as if fully exercised. |
(4) | Includes shares owned by Silver Lake as well as stock awards issued in respect of Rollover Plan. |
(i) | Business Combination Proposal: |
(ii) | Domestication Proposal: two-thirds (2/3) of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. |
(iii) | Charter Amendment Proposal: two-thirds (2/3) of the ordinary shares who, being present in person or by proxy at the extraordinary general meeting, vote at the extraordinary general meeting. |
(iv) | Advisory Governing Documents Proposal: |
(v) | Nasdaq Proposal: |
(vi) | Omnibus Incentive Plan Proposal: |
(vii) | ESPP Proposal: |
(vi) | Adjournment Proposal: |
ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. |
(i) | (a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares; |
(ii) | submit a written request to Continental, Pathfinder’s transfer agent, in which you (a) request that Pathfinder redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
(iii) | deliver your share certificates (if any) and other redemption forms (as applicable) to Continental, Pathfinder’s transfer agent, physically or electronically through DTC. |
• | the fact that the Initial Shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed initial business combination; |
• | the fact that the Sponsor paid an aggregate of $25,000 (including direct and indirect capital contributions from certain of Pathfinder’s directors and officers) for the 8,125,000 Class B ordinary shares currently owned by the Initial Shareholders, which includes 25,000 Class B ordinary shares transferred to each to Steve Walske, Omar Johnson and Paul Weiskopf in consideration for their service as independent directors of Pathfinder. If unrestricted and freely tradable, such shares would be valued at approximately $ , based on the closing price of Pathfinder’s Class A ordinary shares of $ per share on , 2021. In the event that Pathfinder fails to consummate a business combination by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), this investment will be lost; |
• | the fact that, because the Initial Shareholders purchased their Class B ordinary shares at approximately $0.003 per share, the Initial Shareholders could make a substantial profit after our initial business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination value of their ordinary shares (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination); |
• | the fact that Sponsor paid $8,500,000 for its private placement warrants, and those warrants would be worthless if a business combination is not consummated by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), which if unrestricted and freely tradable would be valued at approximately $ , based on the closing price of Pathfinder’s public warrants of $ per public warrant on , 2021; |
• | the fact that Sponsor has issued to Pathfinder a promissory note for up to $500,000 to enable Pathfinder to pay its expenses (the “Working Capital Note”), of which $ is outstanding as of , 2021. The ability of Pathfinder to repay the amounts drawn under the Working Capital Note is dependent upon the completion of an initial business combination; |
• | the fact that Sponsor, the other Initial Shareholders and Pathfinder’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if Pathfinder fails to complete an initial business combination by February 19, 2023; |
• | the fact that the Registration and Shareholder Rights Agreement will be entered into by the Sponsor; |
• | the right of the Sponsor and Pathfinder’s independent directors to hold New SM Common Stock following the Business Combination, subject to certain lock-up periods in the case of the Sponsor; |
• | the continued indemnification of Pathfinder’s directors and officers and the continuation of Pathfinder’s directors’ and officers’ liability insurance after the Business Combination ( i.e. |
• | the fact that the Sponsor and Pathfinder’s officers and directors will lose their entire investment in Pathfinder if an initial business combination is not consummated by February 19, 2023; |
• | the fact that ServiceMax has entered into a definitive agreement to acquire LiquidFrameworks and that certain of Pathfinder’s directors are principals of Industry Ventures, which has a small indirect, passive interest in LiquidFrameworks; |
• | the fact that if the trust account is liquidated, including in the event Pathfinder is unable to complete an initial business combination by February 19, 2023, the Sponsor has agreed to indemnify Pathfinder to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which Pathfinder has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Pathfinder, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; and |
• | the fact that Pathfinder may be entitled to distribute or pay over funds held by Pathfinder outside the trust account to the Sponsor or any of its Affiliates prior to the Closing. |
Sources ($m) |
Uses ($m) | |||||
Cash in trust |
$325.0 | Cash to Balance Sheet |
$292.6 | |||
Sponsor Promote(1) |
41.0 | Sponsor Promote(1) |
41.0 | |||
Stronghold Private Placement |
10.4 | ServiceMax Equity |
1,425.0 | |||
ServiceMax Equity Rollover |
1425.0 | Transaction Costs |
42.8 | |||
Total |
$1,801.4 |
Total |
$1,801.4 |
(1) | Represents the 4,125,000 shares held by Sponsor at Closing not subject to transfer restrictions and potential forfeiture. |
Sources ($m) |
Uses ($m) | |||||
Cash in trust |
$214.6 | Cash to Balance Sheet |
$182.2 | |||
Sponsor Promote(1) |
41.0 | Sponsor Promote(1) |
41.0 | |||
Stronghold Private Placement |
10.4 | ServiceMax Equity Rollover |
1,425.0 | |||
ServiceMax Equity Rollover |
1425.0 | Transaction Costs |
42.8 | |||
Total |
$1,691.0 |
Total |
$1,691.0 |
(1) | Represents the 4,125,000 shares held by Sponsor at Closing not subject to transfer restrictions and potential forfeiture. |
• | We have a history of operating losses and may not achieve or sustain profitability in the future. |
• | If we are unable to attract new customers or continue to broaden our existing customers’ use of our solution, our revenue growth will be adversely affected. |
• | Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, could impair the delivery of our services and harm our business. |
• | Fundamental elements of the ServiceMax operating system are built on the Salesforce Platform and we rely on our commercial agreements with Salesforce to provide our solution to our customers. |
• | Defects or disruptions in our services could, harm our reputation or the reputation of our brands, diminish demand for our services and subject us to substantial liability. |
• | Supporting our existing and growing customer base could strain our personnel resources and infrastructure, and if we are unable to scale our operations and increase productivity, we may not be able to successfully implement our business plan. |
• | We may not be able to sustain our revenue growth rate in the future. |
• | Sales to customers outside the United States expose us to risks inherent in international operations. |
• | If we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological, market and customer developments, our competitive position and business prospects may be harmed. |
• | We use “open source” software in our solution, which may restrict how we use or distribute our solutions, require that we release the source code of certain software subject to open source licenses or subject us to litigation or other actions that could adversely affect our business. |
• | Our efforts to expand our service offerings and to develop and integrate our existing services in order to keep pace with technological developments may not succeed and may reduce our revenue growth rate and harm our business. |
• | New SM’s actual operating and financial results in any given period may differ from guidance New SM provides to the public. |
• | If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. |
• | Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand, cause us to incur significant expenses and harm our business. |
• | Our Sponsor and members of our management team have agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. |
• | Neither the Pathfinder Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination. |
• | The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination. |
• | Since Pathfinder’s Initial Shareholders have interests that are different, or in addition to (and which may conflict with), the interests of our public shareholders, a conflict of interest may have existed in determining whether the Business Combination with ServiceMax is appropriate as our initial Business Combination. Such interests include that Pathfinder’s Initial Shareholders, will lose their entire investment in us if our Business Combination is not completed. |
• | Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of key personnel of New SM, some of whom may be from ServiceMax, and some of whom may join New SM following the Business Combination. The loss of key personnel or the hiring of ineffective personnel after the Business Combination could negatively impact the operations and profitability of New SM. |
• | The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. |
• | Sponsor, as well as ServiceMax, our directors, executive officers, advisors and their affiliates, may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our Class A ordinary shares. |
• | If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering). |
• | The other risks and uncertainties discussed in “Risk Factors” elsewhere in this proxy statement/prospectus. |
• | No redemption scenario |
• | Maximum redemption scenario |
Unaudited Pro Forma |
||||||||
Pro Forma Combined (No Redemption Scenario) |
Pro Forma Combined (Maximum Redemption Scenario) |
|||||||
(in thousands, except share and per share data) |
||||||||
Summary Unaudited Pro Forma Condensed Combined |
||||||||
Statement of Operations Data |
||||||||
Six Months Ended July 31, 2021 |
||||||||
Revenue |
$ | 62,195 | $ | 62,195 | ||||
Cost of revenue |
31,718 | 31,718 | ||||||
Total operating expenses |
67,036 | 67,036 | ||||||
Loss from operations |
(36,559 | ) | (36,559 | ) | ||||
Net loss |
(29,663 | ) | (29,663 | ) | ||||
Unaudited Pro Forma |
||||||||
Pro Forma Combined (No Redemption Scenario) |
Pro Forma Combined (Maximum Redemption Scenario) |
|||||||
(in thousands, except share and per share data) |
||||||||
Summary Unaudited Pro Forma Condensed Combined |
||||||||
Statement of Operations Data |
||||||||
Year Ended January 31, 2021 |
||||||||
Revenue |
$ | 109,150 | $ | 109,150 | ||||
Cost of revenue |
65,193 | 65,193 | ||||||
Total operating expenses |
156,231 | 156,231 | ||||||
Loss from operations |
(112,274 | ) | (112,274 | ) | ||||
Net loss |
(84,128 | ) | (84,128 | ) | ||||
Unaudited Pro Forma |
||||||||
Pro Forma Combined (No Redemption Scenario) |
Pro Forma Combined (Maximum Redemption Scenario) |
|||||||
(in thousands, except share and per share data) |
||||||||
Summary Unaudited Pro Forma Condensed Combined |
||||||||
Balance Sheet Data |
||||||||
As of July 31, 2021 |
||||||||
Total current assets |
$ | 405,374 | $ | 294,990 | ||||
Total assets |
895,114 | 784,730 | ||||||
Total current liabilities |
91,435 | 91,435 | ||||||
Total liabilities |
113,553 | 113,553 | ||||||
Common stock, subject to possible redemption |
— | — | ||||||
Total stockholders’ equity (deficit) |
781,561 | 671,177 |
• | third-party attempts to fraudulently induce our employees, partners or customers to disclose sensitive information such as user names, passwords or other information to gain access to our customers’ data or IT systems, or our data or our IT systems; |
• | efforts by individuals or groups of hackers and sophisticated organizations, such as state-sponsored organizations or nation-states, hacktivists, industrial espionage, malicious insiders, or other criminals to launch coordinated attacks, including ransomware, phishing attacks, distributed denial-of-service |
• | third-party attempts to abuse our marketing, advertising or social platforms to impersonate persons or organizations and disseminate information that is false or misleading; |
• | cyberattacks on our internally built infrastructure on which many of our service offerings operate, or on third-party cloud-computing platform providers; |
• | vulnerabilities resulting from enhancements and updates to our existing service offerings; |
• | vulnerabilities in the products or components across the broad ecosystem that our services operate in conjunction with and are dependent on; |
• | vulnerabilities existing within new technologies and infrastructures, including those from acquired companies; |
• | attacks on, or vulnerabilities in, the many different underlying networks and services that power the Internet that our products depend on, most of which are not under our control or the control of our vendors, partners, or customers; and |
• | employee or contractor errors or intentional acts that compromise our security systems. |
• | frequent changes to, and growth in complexity of, the techniques used to breach, obtain unauthorized access to, or sabotage IT systems and infrastructure, which are generally not recognized until launched against a target, and could result in our being unable to anticipate or implement adequate measures to prevent such techniques or difficulty to detect such techniques for long periods of time; |
• | the continued evolution of our internal IT systems; |
• | the acquisition of new companies, requiring us to incorporate and secure different or more complex IT environments; |
• | authorization by our customers to third-party technology providers to access their customer data, which may lead to our customers’ inability to protect their data that is stored on our servers; and |
• | our limited control over our customers or third-party technology providers, or the processing of data by third-party technology providers, which may not allow us to maintain the integrity or security of such transmissions or processing. |
• | our ability to retain current customers or attract new customers; |
• | the activation, delay in activation or cancelation of large blocks of users by customers; |
• | the timing of recognition of professional services revenues; |
• | the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; |
• | acquisitions of our customers, to the extent the acquirer elects not to continue using our solution or reduces subscriptions to it; |
• | customer renewal rates; |
• | increases or decreases in the number of users licensed or pricing changes upon renewals of customer contracts; |
• | network outages or security breaches; |
• | general economic, industry and market conditions; |
• | changes in our pricing policies or those of our competitors; |
• | seasonal variations in sales of our solution, which have historically been highest in the fourth quarter of our fiscal year; |
• | the timing and success of new product introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; and |
• | the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies. |
• | natural disasters, acts of war, terrorism, and actual or threatened public health emergencies, including the ongoing COVID-19 pandemic and related public health measures and resulting changes to laws and regulations, including changes oriented toward protecting local businesses or restricting the movement of our or our customers’ employees; |
• | localization of our services, including translation into foreign languages and associated expenses; |
• | regulatory frameworks or business practices favoring local competitors; |
• | pressure on the creditworthiness of sovereign nations, where we have customers and a balance of our cash, cash equivalents and marketable securities; |
• | foreign currency fluctuations and controls, which may make our services more expensive for international customers and could add volatility to our operating results; |
• | compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, customs, anti-boycott, sanctions and embargoes, antitrust, data transfer, storage and protection, and industry-specific laws and regulations, including rules related to compliance by our third-party resellers and our ability to identify and respond timely to compliance issues when they occur; |
• | liquidity issues or political actions by sovereign nations, including nations with a controlled currency environment, which could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations; |
• | treatment of revenue from international sources, evolving domestic and international tax environments, and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding taxes in foreign jurisdictions; |
• | uncertainty regarding regulation, currency, tax, and operations resulting from the United Kingdom’s exit from the EU (“ Brexit ”) on January 31, 2020 and possible disruptions in trade, the sale of our services and commerce, and movement of our people between the United Kingdom, EU, and other locations; |
• | uncertainty regarding the imposition of and changes in the United States’ and other governments’ trade regulations, trade wars, tariffs, other restrictions or other geopolitical events, including the evolving relations between the United States and China; |
• | restrictions on the international transfer of certain data; |
• | regional data privacy laws and other regulatory requirements that apply to outsourced service providers and to the transmission of our customers’ data across international borders, which grow more complex as we scale, expand into new markets and enhance the breadth of our service offerings; |
• | different pricing environments; |
• | difficulties in staffing and managing foreign operations; |
• | different or lesser protection of our intellectual property, including increased risk of theft of our proprietary technology and other intellectual property; |
• | longer accounts receivable payment cycles and other collection difficulties; and |
• | regional economic and political conditions. |
• | our customers’ internally developed enterprise applications; |
• | vendors of packaged business software, as well as companies offering enterprise apps delivered through on-premises offerings from enterprise software application vendors and cloud computing application service providers, either individually or with others; |
• | software companies that provide their product or service free of charge as a single product or when bundled with other offerings, or only charge a premium for advanced features and functionality; |
• | vendors who offer software tailored to specific services that are more directed toward those specific services than our full suite of service offerings; |
• | suppliers of traditional business intelligence and data preparation products, as well as business analytics software companies; |
• | integration software vendors and other companies offering integration or API solutions; |
• | traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new apps that run on the customers’ current infrastructure or as hosted services. |
• | our inability to integrate or benefit from acquired technologies or services; |
• | unanticipated costs or liabilities associated with the acquisition; |
• | incurrence of acquisition-related costs; |
• | difficulty integrating the technology, accounting systems, operations, control environments and personnel of the acquired business and integrating the acquired business or its employees into our culture; |
• | difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business; |
• | difficulty converting the customers of the acquired business to our solution and contract terms, including disparities in licensing terms; |
• | additional costs for the support or professional services model of the acquired company; |
• | diversion of management’s attention and other resources; |
• | adverse effects to our existing business relationships with business partners and customers; |
• | the issuance of additional equity securities that could dilute the ownership interests of our stockholders; |
• | incurrence of debt on terms unfavorable to us or that we are unable to repay; |
• | incurrence of substantial liabilities; |
• | difficulties retaining key employees of the acquired business; and |
• | adverse tax consequences, substantial depreciation or deferred compensation charges. |
• | the requirement that a majority of its board of directors consist of independent directors; |
• | the requirement that its director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is comprised entirely of independent directors and that it adopt a written charter or board resolution addressing the nominations process; and |
• | the requirement that it have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | the division of our board of directors into three classes and the election of each class for three-year terms; |
• | advance notice requirements for stockholder proposals and director nominations; |
• | the ability of the board of directors to fill a vacancy created by the expansion of the board of directors; |
• | the ability of our board of directors to issue new series of, and designate the terms of, preferred stock, without stockholder approval, which could be used to, among other things, institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors; |
• | limitations on the ability of stockholders to call special meetings and to take action by written consent following the date that the funds affiliated with Silver Lake no longer beneficially own a majority of our common stock; and |
• | the required approval of holders of at least a majority of the voting power of the outstanding shares of our capital stock to adopt, amend or repeal certain provisions of our certificate of incorporation and bylaws or remove directors for cause, in each case following the date that the funds affiliated with Silver Lake no longer beneficially own a majority of our common stock. |
• | market conditions in the broader stock market; |
• | actual or anticipated fluctuations in our quarterly financial and operating results; |
• | introduction of new products or services by us or our competitors; |
• | our dependence on third party vendors and platforms; |
• | scaling our personnel resources and operational infrastructure; |
• | retention of customers; |
• | delayed revenue recognition; |
• | changing economic conditions; |
• | adoption of our latest technologies and products; |
• | regulatory, legal or political developments; |
• | public response to press releases or other public announcements by us or third parties, including our filings with the SEC; and |
• | changes in accounting principles. |
• | the fact that our Initial Shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed initial business combination; |
• | the fact that the Sponsor paid an aggregate of $25,000 (including direct and indirect capital contributions from certain of Pathfinder’s directors and officers) for the 8,125,000 Class B ordinary shares currently owned by the Initial Shareholders, which includes 25,000 Class B ordinary shares transferred to each to Steve Walske, Omar Johnson and Paul Weiskopf in consideration for their service as independent directors of Pathfinder. If unrestricted and freely tradable, such shares would be valued at approximately $ , based on the closing price of Pathfinder’s Class A ordinary shares of $ per share on , 2021. In the event that Pathfinder fails to consummate a business combination by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), this investment will be lost; |
• | the fact that, because the Initial Shareholders purchased their Class B ordinary shares at approximately $0.003 per share, the Initial Shareholders could make a substantial profit after our initial business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination value of their ordinary shares (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination); |
• | the fact that Sponsor paid $8,500,000 for its private placement warrants, and those warrants would be worthless if a business combination is not consummated by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), which if unrestricted and freely tradable would be valued at approximately $ , based on the closing price of Pathfinder’s public warrants of $ per public warrant on , 2021; |
• | the fact that Sponsor has issued to Pathfinder the Working Capital Note for up to $500,000 to enable Pathfinder to pay its expenses, of which $ is outstanding as of , 2021. The ability of Pathfinder to repay the amounts drawn under the Working Capital Note is dependent upon the completion of an initial business combination; |
• | the fact that Sponsor, the other Initial Shareholders and Pathfinder’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if Pathfinder fails to complete an initial business combination by February 19, 2023; |
• | the right of the Sponsor and Pathfinder’s independent directors to hold New SM Common Stock following the Business Combination, subject to certain lock-up periods in the case of the Sponsor; |
• | the continued indemnification of Pathfinder’s directors and officers and the continuation of Pathfinder’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”); |
• | the fact that the Sponsor and Pathfinder’s officers and directors will lose their entire investment in Pathfinder if an initial business combination is not consummated by February 19, 2023; |
• | the fact that ServiceMax has entered into a definitive agreement to acquire LiquidFrameworks and that certain of Pathfinder’s directors are principals of Industry Ventures, which has a small indirect, passive interest in LiquidFrameworks; |
• | the fact that if the trust account is liquidated, including in the event Pathfinder is unable to complete an initial business combination by February 19, 2023, the Sponsor has agreed to indemnify Pathfinder to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which Pathfinder has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Pathfinder, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; and |
• | the fact that Pathfinder may be entitled to distribute or pay over funds held by Pathfinder outside the trust account to the Sponsor or any of its Affiliates prior to the Closing. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, each of which may make it difficult for us to complete the Business Combination. |
• | registration as an investment company; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
• | changes in the industries in which New SM and its customers operate; |
• | variations in its operating performance and the performance of its competitors in general; |
• | material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy; |
• | actual or anticipated fluctuations in New SM’s quarterly or annual operating results; |
• | publication of research reports by securities analysts about New SM or its competitors or its industry; |
• | the public’s reaction to New SM’s press releases, its other public announcements and its filings with the SEC; |
• | New SM’s failure or the failure of its competitors to meet analysts’ projections or guidance that New SM or its competitors may give to the market; |
• | additions and departures of key personnel; |
• | changes in laws and regulations affecting its business; |
• | commencement of, or involvement in, litigation involving New SM; |
• | changes in New SM’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of New SM Common Stock available for public sale; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism. |
• | a limited availability of market quotations for New SM’s securities; |
• | reduced liquidity for New SM’s securities; |
• | a determination that New SM Common Stock is a “penny stock” which will require brokers trading in New SM Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New SM’s securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | a U.S. Holder of Pathfinder public shares whose Pathfinder public shares have a fair market value of less than $50,000 on the date of the Domestication, should generally not recognize any gain or loss and should generally not be required to include any part of Pathfinder’s earnings in income pursuant to the Domestication; |
• | a U.S. Holder of Pathfinder public shares whose Pathfinder public shares have a fair market value of $50,000 or more on the date of the Domestication, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Pathfinder public shares entitled to vote and less than 10% of the total value of all classes of Pathfinder public shares should generally recognize gain (but not loss) on the exchange of Pathfinder public shares for shares in New SM (a Delaware corporation) pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amounts” attributable to their Pathfinder public shares, provided certain other requirements are satisfied. Pathfinder does not expect to have significant cumulative earnings and profits on the date of the Domestication; and |
• | a U.S. Holder of Pathfinder public shares who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of Pathfinder public shares entitled to vote or 10% or more of the total value of all classes of Pathfinder public shares should generally be required to include in income as a dividend the “all earnings and profits amount” attributable to its Pathfinder public shares, provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code. Pathfinder does not expect to have significant cumulative earnings and profits on the date of the Domestication. |
• | the ability of the New SM Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, New SM’s directors and officers; |
• | a prohibition on stockholder action by written consent except under certain circumstances, which forces stockholder action to be taken at an annual or special meeting of stockholders after such date and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; |
• | the requirement that a special meeting of stockholders may be called only by a majority of the entire New SM Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; |
• | the ability of the New SM Board to amend the bylaws, which may allow the New SM Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to the New SM Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the New SM Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of New SM. |
• | a proposal to approve by ordinary resolution and adopt the Business Combination Agreement, including the Merger, and the transactions contemplated thereby; |
• | a proposal to approve by special resolution the Domestication; |
• | a proposal to approve by special resolution the adoption and approval of the Charter Amendment Proposal; |
• | the following six separate proposals to approve on a non-binding advisory basis, by ordinary resolution the following material differences between the Existing Governing Documents and the Proposed Governing Documents: |
• | to authorize the change in the authorized share capital of Pathfinder from (i) US$33,100.00 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) US$11,000 divided into 1,000,000,000 shares New SM Common Stock and 100,000,000 shares of New SM Preferred Stock; |
• | to authorize the New SM Board to issue any or all shares of New SM Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New SM Board and as may be permitted by the DGCL; |
• | to provide that certain provisions of the certificate of incorporation of New SM are subject to the Registration and Shareholder Rights Agreement; |
• | the removal of the ability of New SM stockholders to take action by written consent in lieu of a meeting unless investment fund(s) affiliated with or managed by Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof, beneficially own a majority of the voting power of all of the then-outstanding shares of capital stock of New SM entitled to vote on such action, or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office; |
• | to amend and restate the Existing Governing Documents and authorize all other changes in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication, including (i) changing the post-Business Combination corporate name from “Pathfinder Acquisition Corporation” to “ServiceMax, Inc.” (which is expected to occur upon the effectiveness of the Domestication), (ii) making New SM’s corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States federal district courts as the exclusive forum for litigation arising out of the Securities Act, and (iv) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the Pathfinder Board believes is necessary to adequately address the needs of New SM after the Business Combination; |
• | to authorize the election of New SM to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders. |
• | a proposal to approve by ordinary resolution the issuance of shares of New SM Common Stock issued in connection with the Business Combination and the Stronghold Private Placement pursuant to Nasdaq Listing Rule 5635; |
• | a proposal to approve and adopt by ordinary resolution the Omnibus Incentive Plan; |
• | a proposal to approve and adopt by ordinary resolution the ServiceMax, Inc. 2021 Employee Stock Purchase Plan; and |
• | a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. |
• | You can vote by signing and returning the enclosed proxy card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Pathfinder Board “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Charter Amendment Proposal, “FOR” each of the separate Advisory Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Omnibus Incentive Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. Votes received after a matter has been voted upon at the extraordinary general meeting will not be counted. |
• | You can attend the extraordinary general meeting and vote in person, or you may attend the extraordinary general meeting virtually and vote electronically. However, if your shares are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way Pathfinder can be sure that the broker, bank or nominee has not already voted your shares. |
• | you may send another proxy card with a later date; |
• | you may notify Morrow Sodali, LLC in writing before the extraordinary general meeting that you have revoked your proxy; or |
• | you may attend the extraordinary general meeting, revoke your proxy, and vote in person or electronically, as indicated above. |
(i) | (a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares; |
(ii) | submit a written request to Continental, Pathfinder’s transfer agent, in which you (i) request that Pathfinder redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
(iii) | deliver your public shares to Continental, Pathfinder’s transfer agent, physically or electronically through DTC. |
• | On the Closing Date, prior to the Effective Time, ServiceMax shall cause the following transactions to occur: (i) a forward stock split of the ServiceMax Common Stock will occur such that, after giving effect thereto, ServiceMax JV will hold a number of shares of ServiceMax Common Stock equal to the number of shares of New SM Stock constituting the Transaction Share Consideration (as defined |
below); (ii) ServiceMax JV will be terminated, dissolved and liquidated and in connection with such termination, dissolution and liquidation, the ServiceMax Common Stock held by ServiceMax JV (being all of the issued and outstanding ServiceMax Common Stock) immediately following the consummation of the stock split described in clause (i) shall be distributed to the holders of Class A Units and vested profits interests of ServiceMax JV, (iii) vested cash awards issued by ServiceMax JV will be cancelled and converted into the right to receive a replacement award or cash at the Closing; (iv) each unvested profits interest of ServiceMax JV subject only to time-vesting conditions will be cancelled and converted into an unvested restricted stock award with respect to ServiceMax Common Stock under the Rollover Plan; (v) each unvested profits interest of ServiceMax JV subject to performance-vesting conditions (whether or not also subject to time-vesting conditions) will be cancelled and converted into an unvested restricted stock unit award with respect to ServiceMax Common Stock under the Rollover Plan; and (vi) each unvested cash award of ServiceMax JV shall be converted into or cancelled and exchanged for an unvested cash-settled restricted stock unit award with respect to ServiceMax Common Stock under the Rollover Plan (the “ Pre-Closing Reorganization |
• | on the Closing Date, prior to the Effective Time, Pathfinder shall transfer by way of continuation and domestication from the Cayman Islands and Pathfinder shall domesticate as a corporation incorporated in the State of Delaware; (the “ Domestication ”); and |
• | on the Closing Date, the parties to the Business Combination Agreement shall cause a certificate of merger to be executed and filed with the Secretary of State of the State of Delaware, pursuant to which Serve Merger Sub will merge with and into ServiceMax, with ServiceMax as the surviving company in such Merger and, after giving effect to such Merger, ServiceMax will become a wholly-owned subsidiary of Pathfinder. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share of ServiceMax Common Stock (having been distributed to the former holders of Class A Units and vested profits interests of ServiceMax JV pursuant to the Pre-Closing Reorganization) (other than any shares held by dissenting holders of shares of common stock of ServiceMax who demand appraisal of such shares and comply with Section 262 of the General Corporation Law of the State of Delaware and the shares of ServiceMax that are cancelled pursuant to the Business Combination Agreement) will be exchanged for shares of New SM Common Stock, based on an implied ServiceMax pre-transaction equity value of $1.425 billion, subject to adjustment which would subtract (a) the amount of the cash payments being made to holders of vested profits interests of ServiceMax JV pursuant to the Pre-Closing Reorganization and (b) the employer portion of any payroll, social security, employment or similar taxes payable in connection with the vesting or settlement of any vested profits interests and cash awards of ServiceMax JV (the “Transaction Share Consideration ”), and (ii) each restricted stock award and restricted stock unit award with respect to ServiceMax Common Stock issued pursuant to the Rollover Plan outstanding as of immediately prior to the Effective Time (including the restricted stock awards and the restricted stock unit awards with respect to ServiceMax Common Stock issued to holders of unvested profits interests and cash awards of ServiceMax JV pursuant to the Pre-Closing Reorganization) will remain subject to the Rollover Plan but will be converted into the right to receive New SM Common Stock in lieu of ServiceMax Common Stock. |
• | each issued and outstanding Class A ordinary share will convert automatically by operation of law, on a one-for-one |
• | each issued and outstanding Class B ordinary share will convert automatically by operation of law, on a one-for-one |
• | each issued and outstanding whole warrant to purchase Class A ordinary shares of Pathfinder will represent the right to purchase one share of New SM Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the Pathfinder warrant agreement; |
• | the governing documents of Pathfinder will be amended and restated and become the Proposed Certificate of Incorporation and the Proposed Bylaws and Pathfinder’s name will be changed to “ServiceMax, Inc.”; and |
• | in connection with the first three bullets above, each issued and outstanding unit of Pathfinder that has not been previously separated into the underlying Class A ordinary shares and underlying Pathfinder warrants prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New SM Common Stock and one-fifth of one warrant representing the right to purchase one share of New SM Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the Pathfinder warrant agreement. |
• | the applicable waiting period under the HSR Act relating to the transactions contemplated by the Business Combination Agreement shall have expired or been terminated; |
• | no order or law issued or threatened by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Business Combination Agreement shall be in effect; |
• | this registration statement / proxy statement shall have become effective in accordance with the provisions of the Securities Act, no stop order shall have been issued by the SEC and shall remain in effect with respect to this registration statement / proxy statement, and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC and remain pending; |
• | the approval of the Business Combination Agreement, the ancillary documents to which ServiceMax is or will be a party and the transactions contemplated by each of the foregoing documents (including the Pre-Closing Reorganization and the Merger) being obtained from ServiceMax JV, as the sole stockholder of ServiceMax; |
• | the approval of each Condition Precedent Proposal by the affirmative vote of the holders of the requisite number of ordinary shares entitled to vote thereon, whether in person or by proxy at the extraordinary general meeting, in accordance with governing documents of Pathfinder and applicable law; |
• | the aggregate cash proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement are equal to or greater than $162,500,000, after payment of any Pathfinder shareholder redemptions but before payment of Pathfinder’s unpaid expenses and ServiceMax’s unpaid expenses; |
• | Pathfinder’s listing application with Nasdaq in connection with the transactions contemplated by the Business Combination Agreement shall have been approved and, immediately following the Effective Time, Pathfinder shall satisfy any applicable initial and continuing listing requirements of the Nasdaq, and Pathfinder shall not have received any notice of non-compliance therewith that has not been cured or would not be cured at or immediately following the Effective Time, and the New CM Common Stock (after giving effect, for the avoidance of doubt, to the Domestication and, including, for the avoidance of doubt, the New CM Common Stock to be issued pursuant to the Merger) shall have been approved for listing on the Nasdaq; and |
• | after giving effect to the transactions contemplated by the Business Combination Agreement (including the Stronghold Private Placement), Pathfinder shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Effective Time. |
• | the representations and warranties of ServiceMax regarding organization and qualification of ServiceMax and its subsidiaries, certain representations and warranties regarding the capitalization of ServiceMax and its subsidiaries, the representations and warranties regarding the authority of ServiceMax to execute and deliver the Business Combination Agreement and each of the ancillary documents thereto to which it is or will be party and to consummate the transactions contemplated thereby, no occurrence of any Company Material Adverse Effect (as defined in the Business Combination Agreement) having occurred during the period beginning on January 31, 2021 and ending on the date of the Business Combination Agreement, no taking of certain actions that would require the consent of Pathfinder during the period beginning on July 15, 2021 and ending on the date of the Business Combination Agreement, broker fees and the activities of ServiceMax JV shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth in the Business Combination Agreement) in all material respects as of the date of the Business Combination Agreement and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date; provided, that any representation and warranty made as of July 15, 2021 shall be true and correct in all material respects as of July 15, 2021 and as of the Closing Date, as though made on and as of the Closing Date); |
• | the representation and warranty of ServiceMax regarding no occurrence of any Company Material Adverse Effect having occurred during the period beginning on January 31, 2021 and ending on the date of the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date, as though made on and as of the Closing Date; |
• | the other representations and warranties of ServiceMax shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth herein) in all respects as of the date of the Business Combination Agreement and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects as of such earlier date; provided, that any representation and warranty made as of July 15, 2021 shall be true and correct in all respects as of July 15, 2021 and as of the Closing Date, as though made on and as of the Closing Date), except where the |
failure of such representations and warranties to be true and correct, individually or taken as a whole, does not cause and would not constitute a Company Material Adverse Effect; |
• | ServiceMax shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by ServiceMax under the Business Combination Agreement at or prior to the Closing; |
• | each of ServiceMax JV, ServiceMax JV GP, LLC and Silver Lake shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by each of them under the Company Transaction Support Agreement and/or the Company Shareholder Transaction Support Agreement, as applicable, at or prior to the Closing; |
• | since July 15, 2021, no Company Material Adverse Effect shall have occurred; |
• | Pathfinder must have received a certificate duly executed by an authorized officer of ServiceMax, dated as of the Closing Date, confirming that the conditions set forth in the first six (6) bullet points in this section have been satisfied; and |
• | the Pre-Closing Reorganization shall have been consummated in accordance with the applicable terms of the Business Combination Agreement. |
• | the representations and warranties of Pathfinder regarding organization and qualification of Pathfinder and Serve Merger Sub, the authority of Pathfinder to execute and deliver the Business Combination Agreement and each of the ancillary documents thereto to which it is or will be a party and to consummate the transactions contemplated thereby, the capitalization of Pathfinder and Serve Merger Sub and brokers fees shall be true and correct (without giving effect to any limitation as to “materiality” or “Pathfinder Material Adverse Effect” (as defined in the Business Combination Agreement) or any similar limitation set forth herein) in all material respects as of the date of the Business Combination Agreement and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date); |
• | the other representations and warranties of Pathfinder and Serve Merger Sub shall be true and correct (without giving effect to any limitation as to “materiality” or “Pathfinder Material Adverse Effect” or any similar limitation set forth herein) in all respects as of the date of the Business Combination Agreement and as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be true and correct, taken as a whole, does not cause a Pathfinder Material Adverse Effect; |
• | Pathfinder shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by it under the Business Combination Agreement at or prior to the Closing; |
• | ServiceMax must have received a certificate duly executed by an authorized officer of Pathfinder, dated as of the Closing Date, confirming that the conditions set forth in the first three (3) bullet points in this section have been satisfied; and |
• | the aggregate cash proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement after payment of any Pathfinder shareholder redemptions, plus the aggregate cash proceeds actually received (or deemed received) by either Pathfinder or Serve Merger Sub in respect of the Stronghold Private Placement (in each case, for the avoidance of doubt, not taking into account any payment of fees, expenses or other amounts on or after the Closing Date (including any of Pathfinder’s unpaid expenses and ServiceMax’s unpaid expenses)), shall be equal to or greater than $225,000,000. |
• | Subject to certain exceptions or as consented to in writing by Pathfinder (such consent not to be unreasonably withheld, conditioned or delayed), prior to the Closing, Pathfinder will, and will cause its subsidiaries to, operate the business of Pathfinder and its subsidiaries in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact in all material respects the business organization, assets, properties and material business relations of Pathfinder and its subsidiaries, taken as a whole. |
• | Pursuant to the Business Combination Agreement, if the LiquidFrameworks acquisition is not reasonably expected to be consummated by November 1, 2021, ServiceMax may raise debt or equity financing for purposes of funding the LiquidFrameworks acquisition, which financing may, in certain circumstances, require the consent of Pathfinder (which may not be unreasonably withheld or delayed). |
• | Subject to certain exceptions, prior to the Closing, ServiceMax will and will cause its subsidiaries to, not do any of the following without Pathfinder’s consent (such consent not to be unreasonably withheld, conditioned or delayed except in the case of the first, second, third, fourth, seventh, ninth, twelfth, thirteenth, fourteenth, fifteenth and sixteenth (to the extent related to any of the foregoing) sub-bullets below): |
• | declare, set aside, make or pay any dividends or distribution or payment in respect of, or repurchase any outstanding, any equity securities of ServiceMax or any subsidiary of ServiceMax; |
• | merge, consolidate, combine or amalgamate ServiceMax and its subsidiaries with any person or otherwise acquire any business entity or organization; |
• | adopt any amendments, supplements, restatements or modifications to the governing documents of ServiceMax’s and its subsidiaries; |
• | transfer, sell, assign, abandon, lease, license, permit to lapse or expire, or otherwise dispose of any material assets or material properties of ServiceMax and its subsidiaries or create, subject to or incur any lien on any material assets or properties of ServiceMax and its subsidiaries (other than permitted liens); |
• | transfer, issue, sell, grant, pledge or otherwise directly or indirectly dispose of, or subject to a lien, any equity securities of ServiceMax and its subsidiaries or any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating ServiceMax and its subsidiaries to issue, deliver or sell any equity securities of ServiceMax and its subsidiaries, as applicable; |
• | incur, create or assume any indebtedness, other than ordinary course trade payables; |
• | make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any person, subject to certain exceptions; |
• | adopt or materially amend any material benefit plan or materially increase the compensation or benefits payable to any current or former director, manager, officer, employee, individual, independent contractor or service provider, take any action to accelerate any payment or benefit payable to any such person, waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider; negotiate, enter into, amend or extend any collective bargaining agreement or other contract with a union or hire or engage or terminate any employee or individual independent contractor with annual compensation in excess of $500,000 other than for cause; implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other actions that could implicate the Worker Adjustment Retraining and Notification Act of 1988, as well as analogous applicable state or local laws; |
• | make, change or revoke any material election concerning taxes, enter into any material tax closing agreement, settle any material tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to or relating to any material tax claim or assessment, other than any such extension or waiver that is obtained in the ordinary course of business; |
• | enter into any settlements in excess of a certain threshold or that impose any material non-obligations on ServiceMax or any of its subsidiaries; |
• | authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, reorganization or similar transaction involving ServiceMax and its subsidiaries (or Pathfinder or any of its affiliates following the Closing); |
• | change the methods of accounting of ServiceMax or any of its subsidiaries in any material respect, other than changes that are made in accordance with Public Company Accounting Oversight Board standards; |
• | enter into any contract providing for the payment of any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by the Business Combination Agreement; |
• | make any change of control payment that is disclosed to Pathfinder on the ServiceMax disclosure schedules; |
• | amend, modify or terminate any contract that limits, in any material respect, the freedom of ServiceMax or any of its subsidiaries to engage in or compete in any line of business or with any person or in any area, any material affiliate contracts or material contracts providing for any “change of control” payment; and |
• | enter into any contract to take, or cause to be taken, any of the actions set forth in the sub-bullets above. |
• | As promptly as reasonably practicable (and in any event within two business days) following the date of the Business Combination Agreement, ServiceMax is required to obtain and deliver to Pathfinder a true and correct copy of a written consent approving the Business Combination Agreement, the ancillary documents to which the Company is party to and the transactions contemplated each of the foregoing documents (including the Pre-Closing Reorganization and the Merger), duly executed by Parent, as the sole stockholder of ServiceMax, required to approve and adopt such matters (the “Company Shareholder Written Consent ”). |
• | At least five Business Days prior to the Closing, ServiceMax is required to deliver an allocation schedule setting forth certain capitalization information of ServiceMax for purposes of allocating the New SM Common Stock among the ServiceMax equityholders. |
• | Subject to certain exceptions, prior to the Closing, ServiceMax will purchase a “tail” policy providing liability insurance coverage for ServiceMax directors and officers with respect to matters occurring on or prior to the Closing. |
• | Subject to certain exceptions, prior to the Closing or termination of the Business Combination Agreement in accordance with its terms, ServiceMax shall not, and shall cause its subsidiaries, ServiceMax JV, ServiceMax JV GP, LLC and its and their respective representatives not to, directly or indirectly: (i) solicit, initiate, seek, knowingly encourage, knowingly facilitate, accept, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer with respect to a Company Acquisition Proposal (as defined in the Business Combination Agreement); (ii) furnish or provide any non-public information or documents to any person in connection with, or that could reasonably be expected to lead to, a Company Acquisition Proposal; (iii) enter into, participate in or continue in any discussion or negotiations with any third party in connection with or related or, or approve, accept or entered into any letter of intent, term sheet or contract or other arrangement or understanding regarding a Company Acquisition Proposal; (iv) prepare or take any steps in connection with a public or other offering or sale of any equity securities of Pathfinder or its subsidiaries (or any affiliate, current or future parent entity or successor of Pathfinder or its subsidiaries); (v) consummate any Company Acquisition Proposal; or (vi) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any person to do or seek to do any of the foregoing. |
• | ServiceMax will, and will cause its representatives to, reasonably consult with and reasonably cooperate with Pathfinder and its representatives in connection with the Pre-Closing Reorganization and otherwise keep Pathfinder and its representatives apprised, in reasonable detail, of the status of the Pre-Closing Reorganization. |
• | ServiceMax shall give Pathfinder prompt written notice of any demands for appraisal of any shares of ServiceMax Common Stock, attempted withdrawals of such demands and any other documents or instruments served pursuant to the DGCL relating to ServiceMax’s stockholders’ rights of appraisal in accordance with the provisions of Section 262 of the DGCL. ServiceMax will not, except with the prior written consent of Pathfinder (which consent shall not be unreasonably withheld, conditioned, or delayed), settle or offer or agree to settle, or make any payment, or deliver any consideration, with respect to, any such demand. |
• | As promptly as reasonably practicable following the date of the Business Combination Agreement, ServiceMax shall deliver to Pathfinder the ServiceMax consolidated audited financial statements for the years ended January 31, 2020 and January 31, 2021 and the ServiceMax consolidated unaudited financial statements for the six-month period ended June 30, 2021. |
• | At least two business days prior to the Closing Date, ServiceMax will change its name to “ServiceMax Subsidiary, Inc.” (or another name as may be determined by ServiceMax in its sole discretion). |
• | Subject to certain exceptions (including the ability of Pathfinder or Serve Merger Sub to use funds held by Pathfinder outside the trust account to pay any Pathfinder expenses or liabilities to distribute or pay over any funds held by Pathfinder outside the trust account to Sponsor or any of its affiliates, in each case, prior to the Closing) or as consented to in writing by ServiceMax, prior to the Closing, Pathfinder will, and will cause its subsidiaries to, not do any of the following: |
• | adopt any amendments, supplements, restatements or modifications to, or waive any provisions of, the trust agreement, warrant agreement or the governing documents of any Pathfinder Party or any of its subsidiaries; |
• | declare, set aside, make or pay a dividend on, or make any other distribution or payment in respect of, any equity securities of Pathfinder or any of its subsidiaries, or repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding equity securities of Pathfinder or any of its subsidiaries, as applicable; |
• | split, combine or reclassify any of its capital stock or other equity securities or issue any other security in respect of, in lieu of or in substitution for shares of its capital stock; |
• | incur, create or assume any indebtedness, except for indebtedness for borrowed money in an amount not to exceed $2,000,000 in the aggregate; |
• | make any loans or advances to, or capital contributions in, any other person, other than to, or in, Pathfinder or any of its subsidiaries; |
• | issue any equity securities of Pathfinder or any of its subsidiaries or grant any additional options, warrants or stock appreciation rights with respect to equity securities of the foregoing of Pathfinder or any of its subsidiaries; |
• | enter into, renew, modify or revise any Pathfinder related party transaction (or any contract or agreement that if entered into prior to the execution and delivery of the Business Combination Agreement would be a Pathfinder related party transaction), other than (i) the entry into any contract with a Pathfinder related party with respect to the incurrence of indebtedness permitted by the fourth sub-bullet above or (ii) for the avoidance of doubt, any expiration or automatic extension or renewal of any contract pursuant to its terms; |
• | engage in any activities or business, other than activities or business (i) in connection with or that are otherwise incidental or related to such Person’s organization, incorporation or formation, as applicable, or continuing corporate (or similar) existence, (ii) contemplated by, or incidental or related to, the Business Combination Agreement, any ancillary document thereto, the performance of covenants or agreements hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or (iii) those that are administrative or ministerial, in each case for purposes of this clause (iii), which are immaterial in nature; |
• | make, change or revoke any material election concerning taxes, enter into any material tax closing agreement, settle any material tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to or relating to any material tax claim or assessment, other than any such extension or waiver that is obtained in the ordinary course of business; |
• | authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution; |
• | enter into any contract with any broker, finder, investment banker or other person under which such person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by the Business Combination Agreement; or |
• | enter into any contract to take, or cause to be taken, any of the actions set forth in the sub-bullets above. |
• | As promptly as reasonably practicable following the time at which this registration statement/proxy statement is declared effective under the Securities Act, Pathfinder will duly give notice of and use its reasonable best efforts to duly convene and hold the extraordinary general meeting to approve the Transaction Proposals. |
• | As promptly as reasonably practicable (and in any event within one business day) following the date of the Business Combination Agreement, Pathfinder, as the parent and sole shareholder of Serve Merger Sub, is required to approve and adopt the Business Combination Agreement, the ancillary documents to which Serve Merger Sub is party to and the transactions contemplated by any of the foregoing documents (including the Merger). |
• | Subject to certain exceptions, Pathfinder shall use its reasonable best efforts to cause: (i) Pathfinder’s listing application with Nasdaq in connection with the transactions contemplated by the Business Combination Agreement to have been approved; (b) Pathfinder to satisfy all applicable initial and continuing listing requirements of Nasdaq; and (iii) the New SM Common Stock and new SM warrants issuable in accordance with the Business Combination Agreement, including the Domestication and the Merger, to be approved for listing on Nasdaq, in each case, as promptly as reasonably practicable after the date of the Business Combination Agreement and in any event prior to the Closing. |
• | Subject to certain exceptions, prior to the Closing, Pathfinder will purchase or maintain a “tail” policy providing liability insurance coverage for Pathfinder directors and officers with respect to matters occurring on or prior to the Closing. |
• | Subject to certain exceptions, prior to the Closing or termination of the Business Combination Agreement in accordance with its terms, Pathfinder and Serve Merger Sub shall not, and each of them shall cause its respective representatives not to, directly or indirectly: (i) solicit, initiate, seek, knowingly encourage, knowingly facilitate, accept or negotiate, directly or indirectly, any inquiry, proposal or offer with respect to a Pathfinder Acquisition Proposal (as defined in the Business Combination Agreement); (ii) furnish or provide any non-public information or documents to any person in connection with, or that could reasonably be expected to lead to, a Pathfinder Acquisition Proposal; (iii) enter into, participate in or continue any discussions or negotiations with any third party in connection with or related to, or approve, accept or enter into any letter of intent, term sheet or contract or other arrangement or understanding regarding any Pathfinder Acquisition Proposal; (iv) prepare, submit, file or take any steps in connection with an offering of any securities of Pathfinder (or any controlled affiliate or successor of Pathfinder); (v) consummate any Pathfinder Acquisition Proposal; or (vi) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any person to do or seek to do any of the foregoing. |
• | using reasonable best efforts to consummate the Business Combination; |
• | notify the other party in writing promptly after learning of any shareholder demands or other shareholder proceedings relating to the Business Combination Agreement, any ancillary document or any matters relating thereto and reasonably cooperate with one another in connection therewith; |
• | keeping certain information confidential in accordance with the existing non-disclosure agreements; |
• | making relevant public announcements; |
• | using reasonable best efforts to cause the each of the Domestication and the Merger to constitute a transaction treated as a “reorganization” within the meaning of Section 368 of the IRS Code; and |
• | cooperate in connection with certain tax matters and filings. |
• | by the mutual written consent of Pathfinder and ServiceMax; |
• | by Pathfinder, subject to certain exceptions, if any of the representations or warranties made by ServiceMax are not true and correct or if ServiceMax fails to perform any of its respective covenants or agreements under the Business Combination Agreement (including an obligation to consummate the Closing) or ServiceMax JV, ServiceMax JV GP, LLC or Silver Lake has failed to perform any covenant or agreement on the part of ServiceMax JV, ServiceMax JV GP, LLC or Silver Lake set forth in the Company Transaction Support Agreement and/or the Company Shareholder Transaction Support Agreement, as applicable, such that certain conditions to the obligations of Pathfinder, as described in the section entitled “— Conditions to Closing of the Business Combination Termination Date ”); |
• | by ServiceMax, subject to certain exceptions, if any of the representations or warranties made by Pathfinder and Serve Merger Sub are not true and correct or if Pathfinder or Serve Merger Sub fails to perform any of its covenants or agreements under the Business Combination Agreement (including an obligation to consummate the Closing) such that the condition to the obligations of ServiceMax, as described in the section entitled “— Conditions to Closing of the Business Combination |
• | by either Pathfinder or ServiceMax, if the transactions contemplated by the Business Combination Agreement are not consummated on or prior to the Termination Date, unless the breach of any |
covenants or agreements under the Business Combination Agreement by the party seeking to terminate (or by ServiceMax JV or ServiceMax JV GP, LLC of any of its covenants or agreements set forth in the Company Transaction Support Agreement and/or Company Shareholder Transaction Support Agreement, as applicable, if ServiceMax is seeking to terminate) proximately caused the failure to consummate the transactions contemplated by the Business Combination Agreement; |
• | by either Pathfinder or ServiceMax, |
• | if any governmental entity shall have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Business Combination Agreement and such order or other action shall have become final and nonappealable; |
• | if the approval of the Condition Precedent Proposals are not obtained at the extraordinary general meeting (including any adjournment thereof); and |
• | by Pathfinder, if ServiceMax does not deliver, or cause to be delivered to Pathfinder, the Company Shareholder Written Consent when required under the Business Combination Agreement. |
Share Ownership in New SM |
||||||||
No redemptions |
Maximum redemptions(1) |
|||||||
Percentage of Outstanding Shares |
Percentage of Outstanding Shares |
|||||||
Pathfinder public shareholders(1)(2) |
19.6 | % | 14.9 | % | ||||
Sponsor and other initial shareholders(3) |
6.2 | % | 6.2 | % | ||||
ServiceMax Stockholders(4) |
73.7 | % | 78.3 | % | ||||
Stronghold Private Placement Investors |
0.5 | % | 0.6 | % |
(1) | Assumes that 33.96% of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination, which is the maximum amount of redemptions while still satisfying the condition to the consummation of the Business Combination that proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement together with the proceeds of the Stronghold Private Placement be equal to or greater than $225,000,000. |
(2) | Includes 6,500,000 public warrants as if fully exercised. |
(3) | Includes 4,250,000 private placement warrants as if fully exercised. |
(4) | Includes shares owned by Silver Lake as well as stock awards issued in respect of Rollover Plan. |
Fiscal Year Ending January 31, |
||||||||||||
($ in millions) | 2022E |
2023E |
2024E |
|||||||||
Subscription Revenue |
$ | 112 | $ | 136 | $ | 168 | ||||||
Adjusted Subscription Gross Profit (1) |
$ | 85 | $ | 107 | $ | 134 | ||||||
Revenue |
$ | 130 | $ | 155 | $ | 188 | ||||||
Adjusted Gross Profit (1) |
$ | 85 | $ | 107 | $ | 134 | ||||||
Adjusted EBITDA (1) |
$ | (21 | ) | $ | (6 | ) | $ | 13 | ||||
Adjusted Free Cash Flow (1) |
$ | (18 | ) | $ | 1 | $ | 21 |
(1) | The amounts are non-GAAP financial measures, which exclude depreciation and amortization, stock-based compensation, and purchase accounting adjustments related to acquired deferred commissions. These amounts shown do not reflect adjustments to give effect to ServiceMax’s acquisition of LiquidFrameworks. |
As of 7/13/2021 (in millions) |
Revenue Growth |
EBITDA Margin |
FV / Revenue |
FV / Revenue / Revenue Growth |
||||||||||||
Company Name |
CY2022E |
CY2022E |
CY2022E |
CY2022E |
||||||||||||
ServiceMax (1) |
20 | % | -4 | % | 9.2x | 0.5x | ||||||||||
RingCentral, Inc. Class A |
24 | % | 14 | % | 14.7x | 0.6x | ||||||||||
HubSpot, Inc. |
26 | % | 13 | % | 17.9x | 0.7x | ||||||||||
Zendesk, Inc. |
25 | % | 12 | % | 10.7x | 0.4x | ||||||||||
C3.ai, Inc. Class A |
34 | % | -32 | % | 21.5x | 0.6x | ||||||||||
Procore Technologies Inc |
23 | % | -5 | % | 21.5x | 0.9x | ||||||||||
nCino, Inc. |
23 | % | -2 | % | 19.1x | 0.8x | ||||||||||
Veeva Systems Inc Class A |
19 | % | 40 | % | 23.6x | 1.2x | ||||||||||
Five9, Inc. |
18 | % | 19 | % | 20.7x | 1.2x | ||||||||||
Anaplan, Inc. |
25 | % | 0 | % | 12.1x | 0.5x | ||||||||||
BlackLine, Inc. |
21 | % | 13 | % | 14.5x | 0.7x | ||||||||||
AppFolio Inc Class A |
19 | % | 16 | % | 11.1x | 0.6x | ||||||||||
Median |
23 |
% |
13 |
% |
17.9x |
0.7x |
• | the fact that our Initial Shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed initial business combination; |
• | the fact that the Sponsor paid an aggregate of $25,000 (including direct and indirect capital contributions from certain of Pathfinder’s directors and officers) for the 8,125,000 Class B ordinary shares currently owned by the Initial Shareholders, which includes 25,000 Class B ordinary shares transferred to each to Steve Walske, Omar Johnson and Paul Weiskopf in consideration for their service as independent directors of Pathfinder. If unrestricted and freely tradable, such shares would be valued at approximately $ , based on the closing price of Pathfinder’s Class A ordinary shares of $ per share on , 2021. In the event that Pathfinder fails to consummate a business combination by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), this investment will be lost; |
• | the fact that, because the Initial Shareholders purchased their Class B ordinary shares at approximately $0.003 per share, the Initial Shareholders could make a substantial profit after our initial business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination value of their ordinary shares (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination); |
• | the fact that Sponsor paid $8,500,000 for its private placement warrants, and those warrants would be worthless if a business combination is not consummated by February 19, 2023 (unless such date is extended in accordance with the Existing Governing Documents), which if unrestricted and freely tradable would be valued at approximately $ , based on the closing price of Pathfinder’s public warrants of $ per public warrant on , 2021; |
• | the fact that Sponsor has issued to Pathfinder a promissory note for up to $500,000 to enable Pathfinder to pay its expenses (the “Working Capital Note”), of which $ is outstanding as of , 2021. The ability of Pathfinder to repay the amounts drawn under the Working Capital Note is dependent upon the completion of an initial business combination; |
• | the fact that Sponsor, the other Initial Shareholders and Pathfinder’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if Pathfinder fails to complete an initial business combination by February 19, 2023; |
• | the fact that the Registration and Shareholder Rights Agreement has been entered into by Sponsor; |
• | the right of the Sponsor and Pathfinder’s independent directors to hold New SM Common Stock following the Business Combination, subject to certain lock-up periods in the case of the Sponsor; |
• | the continued indemnification of Pathfinder’s directors and officers and the continuation of Pathfinder’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”); |
• | the fact that Sponsor and Pathfinder’s officers and directors will lose their entire investment in Pathfinder if an initial business combination is not consummated by February 19, 2023; |
• | the fact that if the trust account is liquidated, including in the event Pathfinder is unable to complete an initial business combination by February 19, 2023, Sponsor has agreed to indemnify Pathfinder to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which Pathfinder has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Pathfinder, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; |
• | the fact that Pathfinder may be entitled to distribute or pay over funds held by Pathfinder outside the trust account to Sponsor or any of its affiliates prior to the Closing; |
• | the fact that ServiceMax has entered into a definitive agreement to acquire LiquidFrameworks and that certain of Pathfinder’s directors are principals of Industry Ventures, which has a small indirect, passive interest in LiquidFrameworks; and |
• | the fact that Sponsor may lend funds to Pathfinder pursuant to the Working Capital Loans, including funds under the Working Capital Note, and such funds become due and payable on the earlier of February 19, 2023 and the date on which the Business Combination is consummated. |
• | Prominence, Predictability, and Flexibility of Delaware Law |
• | Well-Established Principles of Corporate Governance |
• | Increased Ability to Attract and Retain Qualified Directors |
Existing Governing Documents |
Proposed Governing Documents | |||
Authorized Shares (Governing Documents Proposal A) |
The share capital under the Existing Governing Documents is (i) US$33,100.00 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. | The Proposed Governing Documents authorize US$11,000 divided into 1,000,000,000 shares New SM Common Stock and 100,000,000 shares of New SM Preferred Stock. | ||
See paragraph 7 of the Memorandum of Association. |
See Article V of the Proposed Certificate of Incorporation. | |||
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent (Governing Documents Proposal B) |
The Existing Governing Documents authorize the issuance of 1,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered under the Existing Governing Documents, without shareholder | The Proposed Governing Documents authorize the board of directors to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such |
Existing Governing Documents |
Proposed Governing Documents | |||
approval, to issue preference shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares. | qualifications, limitations or restrictions thereof, as the board of directors may determine. | |||
See paragraph 7 of the Memorandum of Association and Article 8 of the Articles of Association. |
See Article V subsection B of the Proposed Certificate of Incorporation. | |||
Registration and Shareholder Rights Agreement (Governing Documents Proposal C |
The Existing Governing Documents are not subject to any director composition agreement. | The Proposed Governing Documents provide that certain provisions therein are subject to the Registration and Shareholder Rights Agreement. | ||
See Article VII subsections 3, 4 and 5 of the Proposed Certificate of Incorporation | ||||
Shareholder/Stockholder Written Consent In Lieu of a Meeting ( Governing Documents Proposal D |
The Existing Governing Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution. | The Proposed Governing Documents allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting, unless investment fund(s) affiliated with or managed by Silver Lake or any of its affiliates, or any successor, transferee or affiliate thereof, beneficially own a majority of the voting power of all of the then-outstanding shares of capital stock of New SM entitled to vote on such action, or such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office. | ||
See Article 1 of our Articles of Association. |
See Articl VI ubsection 1 of the Proposed Certificate of Incorporation. | |||
Corporate Name ( Governing Documents Proposal E |
The Existing Governing Documents provide the name of the company is “Pathfinder Acquisition Corporation” See paragraph 1 of our Memorandum of Association. |
The Proposed Governing Documents will provide that the name of the corporation will be “ServiceMax, Inc.” See Article I of the Proposed Certificate of Incorporation. |
Existing Governing Documents |
Proposed Governing Documents | |||
Perpetual Existence ( Governing Documents Proposal E |
The Existing Governing Documents provide that if we do not consummate a business combination (as defined in the Existing Governing Documents) by February 19, 2023 (twenty-four months after the closing of Pathfinder’s initial public offering), Pathfinder will cease all operations except for the purposes of winding up and will redeem the shares issued in Pathfinder’s initial public offering and liquidate its trust account. | The Proposed Governing Documents do not include any provisions relating to New SM’s ongoing existence; the default under the DGCL will make New SM’s existence perpetual. | ||
See Article 163 of our Articles of Association. |
This is the default rule under the DGCL. | |||
Exclusive Forum ( Governing Documents Proposal E |
The Existing Governing Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation. | The Proposed Governing Documents adopt Delaware as the exclusive forum for certain stockholder litigation and the United States federal district courts as the exclusive forum for litigation arising out of the Securities Act. | ||
See Article XIII of the Proposed Certificate of Incorporation. | ||||
Provisions Related to Status as Blank Check Company ( Governing Documents Proposal E |
The Existing Governing Documents set forth various provisions related to our status as a blank check company prior to the consummation of a business combination. | The Proposed Governing Documents do not include such provisions related to our status as a blank check company, which no longer will apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time. | ||
See Articles 156-170 of our Articles of Association. |
||||
Takeovers by Interested Stockholders (Governing Documents Proposal F ) |
The Existing Governing Documents do not provide restrictions on takeovers of Pathfinder by a related shareholder following a business combination. | The Proposed Governing Documents provide that New SM will not be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but will provide other restrictions regarding takeovers by interested stockholders. | ||
See Article XII of the Proposed Certificate of Incorporation. |
• | Stock options and SARs. |
(payable in cash or shares of equivalent value) equal to the excess of the fair market value of the shares subject to the right over the base value from which appreciation is measured. The exercise price per share of each stock option, and the base value of each SAR, granted under the Omnibus Incentive Plan shall be no less than 100% of the fair market value of a share on the date of grant (or 110% in the case of certain ISOs). Other than in connection with certain corporate transactions or changes to our capital structure, stock options and SARs granted under the Omnibus Incentive Plan may not be repriced, amended, or substituted for with new stock options or SARs having a lower exercise price or base value, nor may any consideration be paid upon the cancellation of any stock options or SARs that have a per share exercise or base price greater than the fair market value of a share on the date of such cancellation, in each case, without shareholder approval. Each stock option and SAR will have a maximum term of not more than ten years from the date of grant (or five years, in the case of certain ISOs). |
• | Restricted and unrestricted stock and stock units. |
• | Performance awards. |
• | Other share-based awards. |
• | Substitute awards. |
• | The assumption, substitution or continuation of some or all awards (or any portion thereof) by the acquiror or surviving entity; |
• | The acceleration of exercisability or delivery of shares in respect of any award, in full or in part; and/or |
• | The cash payment in respect of some or all awards (or any portion thereof) equal to the difference between the fair market value of the shares subject to the award and its exercise or base price, if any. |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | S corporations; |
• | taxpayers that are subject to the mark-to-market |
• | tax-exempt entities; |
• | governments or agencies or instrumentalities thereof; |
• | insurance companies; |
• | regulated investment companies or real estate investment trusts; |
• | expatriates or former long-term residents of the United States; |
• | persons that actually or constructively own five percent or more of our voting shares or five percent or more of the total value of all classes of our shares (except as specifically addressed below); |
• | persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation; |
• | persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction; |
• | foreign corporations with respect to which there are one or more United States shareholders within the meaning of Section 1.367(b)-3(b)(1)(ii); |
• | persons whose functional currency is not the U.S. dollar; |
• | controlled foreign corporations; |
• | accrual method taxpayers that file applicable financial statements as described in Section 451(b) of the Code; or |
• | passive foreign investment companies. |
• | an individual citizen or resident of the United States; |
• | a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income tax regardless of its source; or |
• | a trust if (i) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person. |
A. |
U.S. Holders That Hold 10 Percent or More of Pathfinder |
B. |
U.S. Holders That Own Less Than 10 Percent of Pathfinder |
(i) | a statement that the Domestication is a Section 367(b) exchange (within the meaning of the applicable Treasury Regulations); |
(ii) | a complete description of the Domestication; |
(iii) | a description of any stock, securities or other consideration transferred or received in the Domestication; |
(iv) | a statement describing the amounts required to be taken into account for U.S. federal income tax purposes; |
(v) | a statement that the U.S. Holder is making the election including (A) a copy of the information that the U.S. Holder received from Pathfinder establishing and substantiating the U.S. Holder’s “all earnings and profits amount” with respect to the U.S. Holder’s public shares and (B) a representation that the U.S. Holder has notified Pathfinder (or New SM) that the U.S. Holder is making the election; and |
(vi) | certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations. |
C. |
U.S. Holders that Own Public Shares with a Fair Market Value of Less Than $50,000 |
A. |
Definition of a PFIC |
B. |
Effects of PFIC Rules on the Domestication |
• | the U.S. Holder’s gain will be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s public shares or public warrants; |
• | the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which Pathfinder was a PFIC, will be taxed as ordinary income; |
• | the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s holding period would be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder in respect of the tax attributable to each such other taxable year of such U.S. Holder. |
C. |
QEF Election and Mark-to-Market |
(i) | such non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of such disposition and certain other requirements are met, in which case any gain realized will generally be subject to a flat 30% U.S. federal income tax; |
(ii) | the gain is effectively connected with a trade or business of such non-U.S. Holder in the United States (and if an income tax treaty applies, is attributable to a U.S. permanent establishment or fixed base maintained by such non-U.S. Holder), in which case such gain will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders, and, if the non-U.S. Holder is a corporation, an additional “branch profits tax” may also apply; or |
(iii) | New SM is or has been a “U.S. real property holding corporation” at any time during the shorter of the five-year period preceding such disposition and such non-U.S. Holder’s holding period and either (A) the shares of New SM Common Stock has ceased to be regularly traded on an established securities market or (B) such non-U.S. Holder has owned or is deemed to have owned, at any time during the |
shorter of the five-year period preceding such disposition and such non-U.S. Holder’s holding period more than 5% of outstanding shares of New SM Common Stock. |
Historical |
No Redemption Scenario |
Maximum Redemption Scenario |
||||||||||||||||||||||||||||||
Pathfinder Acquisition Corporation (As of 6/30/2021) |
ServiceMax (As of 7/31/2021) |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||||||||||
Cash and cash equivalents |
333 | 77,254 | 325,009 | (A) | 369,631 | (110,384 | ) | (L | ) | 259,247 | ||||||||||||||||||||||
10,375 | (B) | |||||||||||||||||||||||||||||||
(19,875 | ) | (G1) | ||||||||||||||||||||||||||||||
(23,465 | ) | (I1) | ||||||||||||||||||||||||||||||
Accounts receivable, net |
— | 27,853 | — | 27,853 | — | 27,853 | ||||||||||||||||||||||||||
Accounts receivable – related party |
— | 1,406 | — | 1,406 | — | 1,406 | ||||||||||||||||||||||||||
Prepaid expenses |
1,041 | 1,992 | (1,028 | ) | (H) | 2,005 | — | 2,005 | ||||||||||||||||||||||||
Deferred sales commissions |
— | 2,269 | — | 2,269 | — | 2,269 | ||||||||||||||||||||||||||
Other assets |
— | 2,210 | — | 2,210 | — | 2,210 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total current assets |
1,374 | 112,984 | 291,016 | 405,374 | (110,384 | ) | 294,990 | |||||||||||||||||||||||||
Investments held in Trust Account |
325,009 | — | (325,009 | ) | (A) | — | — | — | ||||||||||||||||||||||||
Property and equipment, net |
— | 436 | — | 436 | — | 436 | ||||||||||||||||||||||||||
Internally developed software, net |
— | 2,529 | — | 2,529 | — | 2,529 | ||||||||||||||||||||||||||
Operating lease right-of-use |
— | 8,094 | — | 8,094 | — | 8,094 | ||||||||||||||||||||||||||
Goodwill |
— | 373,825 | — | 373,825 | — | 373,825 | ||||||||||||||||||||||||||
Intangible assets, net |
— | 99,394 | — | 99,394 | — | 99,394 | ||||||||||||||||||||||||||
Deferred sales commissions, noncurrent |
— | 4,568 | — | 4,568 | — | 4,568 | ||||||||||||||||||||||||||
Deferred public offering costs |
— | 5,129 | (5,129 | ) | (I2) | — | — | — | ||||||||||||||||||||||||
Deposits and other long-term assets |
— | 894 | — | 894 | — | 894 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Assets |
326,383 | 607,853 | (39,122 | ) | 895,114 | (110,384 | ) | 784,730 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||||||||||
Accounts payable |
400 | 5,118 | — | 5,518 | — | 5,518 | ||||||||||||||||||||||||||
Accounts payable – related parties |
— | 1,789 | — | 1,789 | — | 1,789 | ||||||||||||||||||||||||||
Accrued expenses |
189 | 14,922 | (2,602 | ) | (I5) | 12,509 | — | 12,509 | ||||||||||||||||||||||||
Operating lease liabilities |
— | 3,143 | — | 3,143 | — | 3,143 | ||||||||||||||||||||||||||
Unearned revenue |
— | 68,476 | — | 68,476 | — | 68,476 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total current liabilities |
589 | 93,448 | (2,602 | ) | 91,435 | — | 91,435 |
Historical |
No Redemption Scenario |
Maximum Redemption Scenario |
||||||||||||||||||||||||||||||
Pathfinder Acquisition Corporation (As of 6/30/2021) |
ServiceMax (As of 7/31/2021) |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||||
Derivative warrant liabilities |
11,180 | — | — | 11,180 | — | 11,180 | ||||||||||||||||||||||||||
Operating lease liabilities, noncurrent |
— | 5,266 | — | 5,266 | — | 5,266 | ||||||||||||||||||||||||||
Unearned revenue, noncurrent |
— | 2,077 | — | 2,077 | — | 2,077 | ||||||||||||||||||||||||||
Deferred tax liability, net |
— | 3,182 | — | 3,182 | — | 3,182 | ||||||||||||||||||||||||||
Deferred underwriting commissions |
11,375 | — | (11,375 | ) | (G2) | — | — | — | ||||||||||||||||||||||||
Other long-term liabilities |
— | 413 | — | 413 | — | 413 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total liabilities |
23,144 | 104,386 | (13,977 | ) | 113,553 | — | 113,553 | |||||||||||||||||||||||||
Class A ordinary shares subject to possible redemption |
298,239 | — | (298,239 | ) | (C) | — | — | — | ||||||||||||||||||||||||
Stockholders’ equity: |
||||||||||||||||||||||||||||||||
ServiceMax Shares, $0.00001 par value |
— | — | 1 | (D) | 1 | — | (L | ) | 1 | |||||||||||||||||||||||
— | (B) | |||||||||||||||||||||||||||||||
— | (C) | |||||||||||||||||||||||||||||||
— | (E) | |||||||||||||||||||||||||||||||
— | (F) | |||||||||||||||||||||||||||||||
Class A common stock, $0.01 par value |
— | — | — | (D) | — | — | — | |||||||||||||||||||||||||
Class A ordinary shares, $0.0001 par value |
— | — | — | (F) | — | — | — | |||||||||||||||||||||||||
Class B ordinary Shares, $0.0001 par value |
1 | — | (1 | ) | (E) | — | — | — | ||||||||||||||||||||||||
Additional paid-in capital |
998 | 663,540 | 298,239 | (C) | 967,062 | (110,384 | ) | (L | ) | 856,678 | ||||||||||||||||||||||
10,375 | (B) | |||||||||||||||||||||||||||||||
(1 | ) | (D) | ||||||||||||||||||||||||||||||
(25,888 | ) | (I3) | ||||||||||||||||||||||||||||||
4,001 | (J) | |||||||||||||||||||||||||||||||
— | (F) | |||||||||||||||||||||||||||||||
1 | (E) | |||||||||||||||||||||||||||||||
(1,028 | ) | (H) | ||||||||||||||||||||||||||||||
(8,500 | ) | (G3), (J) | ||||||||||||||||||||||||||||||
25,325 | (K) | |||||||||||||||||||||||||||||||
(Accumulated deficit) / Retained earnings |
4,001 | (160,073 | ) | — | (G3), (J) | (185,502 | ) | — | (185,502 | ) | ||||||||||||||||||||||
(104 | ) | (I4) | ||||||||||||||||||||||||||||||
(4,001 | ) | (J) | ||||||||||||||||||||||||||||||
(25,325 | ) | (K) | ||||||||||||||||||||||||||||||
Total stockholders’ equity |
5,000 | 503,467 | 273,094 | 781,561 | (110,384 | ) | 671,177 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total liabilities and stockholders’ deficit |
326,383 | 607,853 | (39,122 | ) | 895,114 | (110,384 | ) | 784,730 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
No Redemption Scenario |
Maximum Redemption Scenario |
||||||||||||||||||||||||||
Pathfinder Acquisition Corporation (As of 12/31/2020) |
ServiceMax (As of 1/31/2021) |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Revenue |
||||||||||||||||||||||||||||
Subscription |
— | 91,326 | — | 91,326 | — | 91,326 | ||||||||||||||||||||||
Professional services |
— | 17,824 | — | 17,824 | — | 17,824 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenue |
— | 109,150 | — | 109,150 | — | 109,150 | ||||||||||||||||||||||
Cost of revenue |
||||||||||||||||||||||||||||
Subscription |
— | 44,854 | — | 44,854 | — | 44,854 | ||||||||||||||||||||||
Professional services |
— | 20,339 | — | 20,339 | — | 20,339 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cost of revenue |
— | 65,193 | — | 65,193 | — | 65,193 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross Profit |
— | 43,957 | — | 43,957 | — | 43,957 | ||||||||||||||||||||||
Operating expenses |
— | — | — | — | — | — | ||||||||||||||||||||||
Sales and marketing |
— | 68,305 | — | 68,305 | — | 68,305 | ||||||||||||||||||||||
Research and development |
— | 26,445 | — | 26,445 | — | 26,445 | ||||||||||||||||||||||
General and administrative |
8 | 16,136 | 396 | (AA) | 61,481 | — | 61,481 | |||||||||||||||||||||
8,500 | (BB) | |||||||||||||||||||||||||||
25,325 | (EE) | |||||||||||||||||||||||||||
9,523 | (FF) | |||||||||||||||||||||||||||
1,593 | (GG) | |||||||||||||||||||||||||||
General and administrative - related party |
— | — | — | — | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
8 | 110,886 | 45,337 | 156,231 | — | 156,231 | ||||||||||||||||||||||
Loss from operations |
(8 | ) | (66,929 | ) | (45,337 | ) | (112,274 | ) | — | (112,274 | ) | |||||||||||||||||
Interest income |
— | 107 | — | 107 | — | 107 | ||||||||||||||||||||||
Loss on foreign exchange transactions |
— | (7 | ) | — | (7 | ) | — | (7 | ) | |||||||||||||||||||
Other income (expense), net |
— | (13 | ) | — | (13 | ) | — | (13 | ) | |||||||||||||||||||
Change in fair value of derivative warrant liabilities |
— | — | — | — | — | — | ||||||||||||||||||||||
Financing costs - derivative warrants liabilities |
— | — | — | — | — | — | ||||||||||||||||||||||
Income from investments held in Trust Account |
— | — | — | — | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income (expense), net |
— | 87 | — | 87 | — | 87 |
Historical |
No Redemption Scenario |
Maximum Redemption Scenario |
||||||||||||||||||||||||||
Pathfinder Acquisition Corporation (As of 12/31/2020) |
ServiceMax (As of 1/31/2021) |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Loss before income taxes |
(8 | ) | (66,842 | ) | (45,337 | ) | (112,187 | ) | — | (112,187 | ) | |||||||||||||||||
Income tax benefit |
— | 17,006 | 11,053 | (DD) | 28,059 | — | 28,059 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss and comprehensive loss |
(8 |
) |
(49,836 |
) |
(34,284 |
) |
(84,128 |
) |
— |
(84,128 |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares outstanding of New ServiceMax common stock—basic and diluted |
180,100,000 | 169,061,627 | ||||||||||||||||||||||||||
Weighted average shares outstanding of common stock—basic and diluted |
100 | |||||||||||||||||||||||||||
Weighted average shares outstanding of Class A common stock—basic and diluted |
32,500,000 |
Historical |
No Redemption Scenario |
Maximum Redemption Scenario |
||||||||||||||||||||||||||
Pathfinder Acquisition Corporation (As of 6/30/2021) |
ServiceMax (As of 7/31/2021) |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||
Subscription |
— | 53,237 | — | 53,237 | — | 53,237 | ||||||||||||||||||||||
Professional services |
— | 8,958 | — | 8,958 | — | 8,958 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenue |
— | 62,195 | — | 62,195 | — | 62,195 | ||||||||||||||||||||||
Cost of Revenue |
||||||||||||||||||||||||||||
Subscription |
— | 22,527 | — | 22,527 | — | 22,527 | ||||||||||||||||||||||
Professional services |
— | 9,191 | — | 9,191 | — | 9,191 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cost of revenue |
— | 31,718 | — | 31,718 | — | 31,718 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross Profit |
— | 30,477 | — | 30,477 | — | 30,477 | ||||||||||||||||||||||
Costs and expenses: |
||||||||||||||||||||||||||||
Sales and marketing |
— | 33,385 | — | 33,385 | — | 33,385 | ||||||||||||||||||||||
Research and development |
— | 15,691 | — | 15,691 | — | 15,691 | ||||||||||||||||||||||
General and administrative |
534 | 11,526 | 292 | (AA | ) | 17,910 | — | 17,910 | ||||||||||||||||||||
4,762 | (FF | ) | ||||||||||||||||||||||||||
796 | (GG | ) | ||||||||||||||||||||||||||
General and administrative - related party |
50 | — | — | 50 | — | 50 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
584 | 60,602 | 5,850 | 67,036 | — | 67,036 | ||||||||||||||||||||||
Loss from operations |
(584 | ) | (30,125 | ) | (5,850 | ) | (36,559 | ) | — | (36,559 | ) | |||||||||||||||||
Interest income |
— | 9 | — | 9 | — | 9 | ||||||||||||||||||||||
Loss on foreign exchange transactions |
— | (150 | ) | — | (150 | ) | — | (150 | ) | |||||||||||||||||||
Other income (expense), net |
— | 25 | — | 25 | — | 25 | ||||||||||||||||||||||
Change in fair value of derivative warrant liabilities |
5,160 | — | — | 5,160 | — | 5,160 | ||||||||||||||||||||||
Financing costs - derivative warrants liabilities |
(576 | ) | — | — | (576 | ) | — | (576 | ) | |||||||||||||||||||
Income from investments held in Trust Account |
9 | — | (9 | ) | (CC | ) | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income, net |
4,593 | (116 | ) | (9 | ) | 4,468 | — | 4,468 | ||||||||||||||||||||
Loss before income taxes |
4,009 | (30,241 | ) | (5,859 | ) | (32,091 | ) | — | (32,091 | ) | ||||||||||||||||||
Income tax benefit |
— | 1,188 | 1,240 | (DD | ) | 2,428 | — | 2,428 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net (loss) income |
4,009 |
(29,053 |
) |
(4,619 |
) |
(29,663 |
) |
— |
(29,663 |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares: |
||||||||||||||||||||||||||||
Basic and diluted |
100 | |||||||||||||||||||||||||||
Weighted average Class A ordinary shares outstanding, basic and diluted |
32,500,000 | |||||||||||||||||||||||||||
Weighted average Class B ordinary shares outstanding, basic and diluted |
7,955,801 |
1. |
Description of the Business Combination |
(i) | upon the occurrence of First Trigger Price of $12.50 per share, one-third of the aggregate Sponsor Earn-Out Shares, |
(ii) | upon the occurrence of Second Trigger Price of $15.00 per share, one-third of the aggregate Sponsor Earn-Out Shares, and |
(iii) | upon the occurrence of Third Trigger Price of $17.50 per share, one-third of the aggregate Sponsor Earn-Out Shares. |
No Redemption Scenario |
Maximum Redemption Scenario (1) |
|||||||||||||||
(in millions) | Assuming No Redemption |
Ownership % |
Assuming Maximum Redemption |
Ownership % |
||||||||||||
ServiceMax shareholders (1) |
142.5 | 79.1 | 142.5 | 84.3 | ||||||||||||
Pathfinders’ public shareholders (2) |
32.5 | 18.0 | 21.5 | 12.7 | ||||||||||||
Sponsor and initial shareholders |
4.1 | 2.3 | 4.1 | 2.4 | ||||||||||||
Stronghold Private Placement investors |
1.0 | 0.6 | 1.0 | 0.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro forma shares outstanding (3) |
180.1 |
100 |
% |
169.1 |
100 |
% |
(1) | Includes shares owned by Silver Lake. |
(2) | Assumes that 33.96% of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination, which is the maximum amount of redemptions while still satisfying the condition to the consummation of the Business Combination that proceeds available for release from the trust account in |
connection with the transactions contemplated in the Business Combination Agreement, together with the proceeds of the Stronghold Private Placement be equal to or greater than $225.0 million. |
(3) | Excludes Sponsor Earn-Out Shares of 4,062,500 which are subject to forfeiture if vesting does not occur. |
2. |
Basis of Presentation |
• | The pre-combination equity holders of ServiceMax will hold the majority of voting rights in New SM; |
• | The pre-combination equity holders of ServiceMax will have the right to appoint the majority of the directors on the New SM Board; |
• | Senior management of ServiceMax will comprise the senior management of New SM; and |
• | Operations of ServiceMax will comprise the ongoing operations of New SM. |
• | Assuming No Redemptions: |
• | Assuming Maximum Redemptions |
number of redemptions which may occur but which would still provide (i) the minimum aggregate Business Combination and Stronghold Private Placement proceeds to be equal or greater than $225.0 million, consisting of Pathfinder trust account funds of approximately $325.0 million and Stronghold Private Placement proceeds of $10.4 million and (ii) minimum funds required of $225.0 million, less Pathfinder’s unpaid expenses, to be delivered at Closing of the Business Combination. The number of public redemption shares of approximately 11.0 million shares was calculated based on the cash in trust less the minimum funds required plus Stronghold Private Placement proceeds divided by $10 per share of New SM Common Stock. |
3. |
Pro Forma Adjustments |
(A) | Reflects the reclassification of approximately $325.0 million in cash and cash equivalents, including interest income held in the Trust Account at the balance sheet date that becomes available for transaction consideration, redemption of public shares and the operating activities following the Business Combination assuming no redemptions. No impact has been recorded for any potential transaction tax on the transfer of cash on the Trust Account. |
(B) | Reflects the gross cash proceeds from the Stronghold Private Placement consisting of 1,037,500 shares at par value of $0.00001 of New SM Shares at a purchase price of $10.00 per share for proceeds of approximately $10.4 million. |
(C) | Represents the reclassification of $298.2 million of common stock subject to possible redemption to permanent equity assuming no redemptions. |
(D) | Pursuant to the Business Combination Agreement, this adjustment reflects the recapitalization of ServiceMax and issuance of 142.5 million of the post-combination company’s shares to ServiceMax’s equity holders. |
(E) | Reflects the conversion of 50% of all outstanding, non-forfeited Pathfinder Sponsor Shares ($813 of Class B ordinary shares at $0.0001 par value) through the reclassification of $41 to New SM Shares. The remaining 50% of outstanding, non-forfeited Pathfinder Sponsor Shares are converted into unvested Sponsor Earn-Out Shares. Currently, Sponsor Earn-Out Shares are equity classified based on management’s understanding of the terms and conditions. Upon further analysis and evaluation, the classification of these shares may change. |
(F) | Reflects the conversion of Pathfinder’s Class A ordinary shares not subject to redemption to New SM Shares. |
(G) | Reflects the cash payment of Pathfinder’s total estimated unpaid public offering and business combination costs of approximately $19.9 million. The $19.9 million in unpaid costs consist of: (1) approximately $8.5 million of legal and accounting fees to be expensed by Pathfinder prior to or in connection with the Business Combination and (2) approximately $11.4 million of accrued deferred underwriting commissions relating to its public offering in January 2021. These costs are adjusted to Pathfinder’s retained earnings and subsequently adjusted against Additional paid-in-capital as a part of the Business Combination. The following summarizes the transaction costs by type. |
Public Offering Costs (Deferred) as of June 30, 2021 |
||||||||||||||||||||||||
Incurred and unpaid |
Remaining to be incurred |
Cash payment to be made |
||||||||||||||||||||||
Deferred underwriting commissions |
$ | 11,375,000 | $ | — | $ | 11,375,000 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total public offering costs |
$ |
11,375,000 |
G2 |
$ |
— |
$ |
11,375,000 |
|||||||||||||||||
Other BCA Costs (Expensed) as of June 30, 2021 |
||||||||||||||||||||||||
Incurred and unpaid |
Remaining to be incurred |
Cash payment to be made |
||||||||||||||||||||||
Legal and accounting fees |
$ | — | $ | 4,700,000 | $ | 4,700,000 | ||||||||||||||||||
Director and officer insurance |
— | 3,500,000 | 3,500,000 | |||||||||||||||||||||
Other |
— | 300,000 | 300,000 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Pathfinder transaction costs |
$ |
— |
$ |
8,500,000 |
G3 |
$ |
8,500,000 |
|||||||||||||||||
|
|
|||||||||||||||||||||||
Total Cash Payment |
$ |
19,875,000 |
G1 |
|||||||||||||||||||||
|
|
(H) | Reflects $1.0 million of prepaid expenses related to an existing two-year Director & Officer insurance policy. |
(I) | Reflects the cash payment of ServiceMax’s total estimated public offering and other business combination related costs of approximately $23.3 million. Incurred costs to date consist of: (1) legal and accounting fees of approximately $4.5 million, and (2) consulting fees of $0.9 million. Remaining estimated costs consist of: (1) legal and accounting fees of approximately $4.1 million, (2) merger and acquisition fees of $15.0 million, and (3) consulting fees of $1.6 million. The following summarizes the transaction costs by type: |
Other BCA Costs (Deferred) as of July 31, 2021 |
||||||||||||||||||||||||||||||||
Incurred and paid |
Incurred and unpaid |
Remaining to be incurred |
Cash payment to be made |
|||||||||||||||||||||||||||||
Legal and accounting fees |
$ | 1,929,247 | $ | 2,369,336 | $ | 4,231,333 | $ | 6,600,669 | ||||||||||||||||||||||||
Consulting fees |
743,805 | 86,600 | 1,527,567 | 1,614,167 | ||||||||||||||||||||||||||||
Merger and acquisition fees |
— | — | 15,000,000 | 15,000,000 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total ServiceMax transaction costs |
2,673,052 |
I2,I3 |
2,455,936 |
I2,I3 |
20,758,900 |
I3 |
23,214,836 |
I3 |
||||||||||||||||||||||||
Other BCA Costs (Expensed) as of July 31, 2021 |
||||||||||||||||||||||||||||||||
Incurred and paid |
Incurred and unpaid |
Remaining to be incurred |
Cash payment to be made |
|||||||||||||||||||||||||||||
Legal and accounting fees |
$ | 146,087 | $ | 57,056 | $ | 73,203 | $ | 130,259 | ||||||||||||||||||||||||
Consulting fees |
— | 89,332 | 30,736 | 120,068 | ||||||||||||||||||||||||||||
Merger and acquisition fees |
— | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total ServiceMax transaction costs |
146,087 |
146,388 |
103,939 |
I4 |
250,327 |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
$ |
2,819,139 |
$ |
2,602,324 |
I5 |
$ |
20,862,839 |
$ |
23,465,163 |
I1 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
(J) | Reflects the elimination of $12.5 million of Pathfinder’s historical retained earnings, recorded under the provisions of ASC 805 Business Combinations under the acquisition method of accounting. |
(K) | Represents the acceleration of the stock-based compensation expense associated with ServiceMax’s performance awards which the performance condition is deemed to be satisfied upon the Closing. The actual compensation expense recorded may differ from this estimate and such difference may be material. |
(L) | Reflects the maximum redemption of 11,038,373, at a par value of $0.0001 per share in order to achieve the minimum cash of $225.0 million before cash expenditures pursuant to the Business Combination Agreement, of Pathfinder’s Class A ordinary shares for an aggregate payment of $110.4 million at $10.00 per share. |
(AA) | Represents $0.3 million of transaction-related costs, unrelated to the issuance of equity, which have been incurred and expensed by ServiceMax prior to July 31, 2021. The remaining expected transaction related costs to be incurred by ServiceMax subsequent to July 31, 2021 is $0.1 million. The total of $0.4 million in transactions costs is reflected in the unaudited pro forma combined condensed statement of operations for the period ended January 31, 2021. These costs are non-recurring and therefore will not affect New SM’s statement of operations beyond 12 months after the acquisition. As such, $0.4 million in expenses is eliminated from the unaudited pro forma combined condensed statement of operations for the six months ended July 31, 2021. |
(BB) | Represents estimated $8.5 million of Pathfinder transaction costs to be incurred subsequent to June 30, 2021 adjusted for in the unaudited pro forma combined condensed statement of operations for the period ended January 31, 2021. These costs are non-recurring and therefore will not affect New SM’s statements of operations beyond 12 months after the acquisition. As these have not been incurred as of June 30, 2021, which was included in the unaudited pro forma condensed combined statements of operations for the six months ended July 31, 2021, no adjustments were made for the six months ending July 31, 2021. |
(CC) | Investment income of $8,727 from Pathfinder’s cash in trust has been removed from the statement of operations. |
(DD) | Reflects the income tax effect of pro forma adjustments using the estimated blended tax rate of 24% for the year ended January 31, 2021 and for the six months ended July 31, 2021. |
(EE) | Represents the estimated stock-based compensation expense associated with ServiceMax performance awards which the performance condition is deemed to be satisfied upon the Business Combination. The estimated fair value of the performance awards was based on the estimated fair value of ServiceMax’s underlying common shares as of the date of the Business Combination. The actual compensation expense recorded may differ from this estimate and such difference may be material. |
(FF) | 2,897,488 shares of Restricted Stock Units (“ RSUs ”) are issued on account of unvested profits interests in ServiceMax JV pursuant to the Rollover Plan as well as to replace expiring cash awards. The RSUs are subject to time-based vesting over the three years following the Business Combination and estimated grant date fair value of the RSUs was based on Pathfinder’s public trading value per share as of the date of the Business Combination. The actual compensation expense recorded may differ from this estimate and such difference may be material. |
(GG) | The company plans to incur additional compensation expense for restricted stock units that will be granted to new hire employees. These awards have a three year vesting period, 33% for first year and a quarterly vesting schedule after that. Accordingly, $1.6 million and $0.8 million was included as additional adjustments as incremental estimated compensation expense for the year ended January 31, 2021 and six month period ended July 31, 2021, respectively, of the unaudited pro forma combined condensed statement of operations. Certain portion of the new hire employees have already commenced their employment contracts prior to the filing of this proxy/prospectus while others will commence shortly after. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
• | conducting the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | filing proxy materials with the SEC. |
Name |
Age |
Position | ||
Richard Lawson |
49 | Chairman of the Board of Directors | ||
David Chung |
54 | Chief Executive Officer and Director | ||
Lindsay Sharma |
38 | Chief Investment Officer and Director | ||
Lance Taylor |
50 | Chief Financial Officer | ||
J. Steven Young |
59 | Director | ||
Hans Swildens |
51 | Director | ||
Steve Walske |
69 | Director | ||
Paul Weiskopf |
54 | Director | ||
Omar Johnson |
46 | Director |
• | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
• | monitoring the independence of the independent registered public accounting firm; |
• | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
• | inquiring and discussing with management our compliance with applicable laws and regulations; |
• | pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; |
• | appointing or replacing the independent registered public accounting firm; |
• | determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent |
auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
• | monitoring compliance on a quarterly basis with the terms of the initial public offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of the initial public offering; and |
• | reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. |
• | should have demonstrated notable or significant achievements in business, education or public service; |
• | should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
• | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and approving the compensation of all of our other Section 16 executive officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | duty to act in good faith in what the director or officer believes to be in the best interests of Pathfinder as a whole; |
• | duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; |
• | directors should not improperly fetter the exercise of future discretion; |
• | duty to exercise powers fairly as between different sections of shareholders; |
• | duty not to put themselves in a position in which there is a conflict between their duty to Pathfinder and their personal interests; and |
• | duty to exercise independent judgment. |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Richard Lawson |
HGGC, LLC | Private Equity | Chairman, Chief Executive Officer and Co-Founder | |||
Idera, Inc. | Information Management | |||||
Denodo Technologies Inc. | Information Management | Director | ||||
Davies Group Limited | Management Consulting | Director | ||||
Beauty Industry Group Inc. | Cosmetics | Director | ||||
RPX Corp. | IP Risk Management Services | Director | ||||
AMI Cayman HoldCo Ltd | Information Technology | Director | ||||
Monotype Imaging Holdings Inc. | Digital Content Licensing and Software | Director | ||||
AutoAlert, LLC | Information Management | Director |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Dealer-FX Group Inc. |
Information Technology | Director | ||||
FPX, LLC | Information Management | Director | ||||
4Over, LLC | Online Trade Printer | Director | ||||
Aventri, Inc. | Information Management | Director | ||||
PCF Insurance | Insurance Brokerage | Director | ||||
David Chung |
HGGC, LLC | Private Equity | Executive Director | |||
RPX Corp. | IP Risk Management Services | Director | ||||
Monotype Imaging Holdings Inc. | Digital Content Licensing and Software | Director | ||||
Arrowhead Holdings LLC | Crossover Investments, Services | Managing Member | ||||
Fine Arts Museums of San Francisco | Non-Profit Organization |
Trustee | ||||
Lindsay Sharma |
Industry Ventures | Private Equity | Managing Director | |||
Lance Taylor |
HGGC, LLC | Private Equity | Chief Financial Officer | |||
Right to Play USA | Non-Profit Organization |
Director | ||||
Capital Impact Foundation | Foundation | Treasurer | ||||
J. Steven Young |
HGGC, LLC | Private Equity | President and Co-Founder Director | |||
Idera, Inc. | Information Management | Director | ||||
Integrity Marketing Group | Insurance Brokerage | Director | ||||
Dealer-FX Group Inc. |
Information Technology | Director | ||||
AutoAlert, LLC | Information Management | Director | ||||
Innovative Interfaces Holdings, Ltd | Information Management | Director | ||||
Dynata, LLC | Information Management | Director | ||||
FPX, LLC | Information Management | Director | ||||
4Over, LLC | Online Trade Printer | Director |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Aventri, Inc. | Information Management | Director | ||||
Davies Group Limited | Management Consulting | Director | ||||
Denodo Technologies Inc. | Information Management | Director | ||||
Nutraceutical Corporation | Health Food Products | Director | ||||
Beauty Industry Group Inc. | Cosmetics | Director | ||||
HelpSystems, LLC | Information Management | Director | ||||
RPX Corp. | IP Risk Management Services | Director | ||||
AMI Cayman HoldCo Ltd | Information Technology | Director | ||||
Monotype Imaging Holdings Inc. | Information Technology | Director | ||||
PCF Insurance | Insurance Brokerage | Director | ||||
Hans Swildens |
Industry Ventures | Private Equity | Chief Executive Officer and Founder | |||
Steven Walske |
Medallia Inc. | Information Management | Director | |||
BigPanda, Inc. | Information Technology | Director | ||||
Sila Nanotechnologies, Inc. | Information Technology | Director | ||||
Myriad Investments, LLC | Venture Capital | Managing Director | ||||
Omar Johnson |
Mission Advancement Corp. ØPUS United |
Special Purpose Acquisition Company Brand Management |
Director Founder | |||
Paul Weiskopf |
Power Factors, LLC | Information Technology | Director | |||
Domo, Inc. | Information Technology | Independent Advisor |
• | Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses (including the activities of HGGC and Industry Ventures). We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business |
endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. |
• | Our Sponsor subscribed for 8,125,000 Class B ordinary shares prior to the date of our initial public offering (of which 75,000 Class B ordinary shares were subsequently transferred to our independent directors) and purchased 4,250,000 private placement warrants in a transaction that closed simultaneously with the closing of the initial public offering. |
• | Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Class B ordinary shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the initial public offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our Sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its Class B ordinary shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, pursuant to a registration rights agreement which shall terminate on the Effective Date, our Sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their Class B ordinary shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Except as described herein, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and directors owns ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. |
• | Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination. In addition, our Sponsor, officers and directors may Sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. |
• | Connected assets and sensors |
• | Digital twins |
• | AI/machine learning and predictive data models |
• | Augmented reality (“ AR ”), virtual reality (“VR ”), and knowledge-based, real-time collaboration |
• | Asset-centric approach to field service. |
• | Best-in-class . |
• | Cloud delivery model and mobile-forward technology. |
• | Industry thought leadership |
• | Expand within and across our existing customers. |
• | Expand with new customer acquisition. |
• | Expand with new strategic partnerships. |
• | Expand in new segments. |
• | Drive growth in emerging markets . |
• | Selectively pursue strategic acquisitions. |
• | Service contract management. |
• | Installed base management. as-maintained equipment via one source of truth for the entire organization. Technicians know precisely what is on site and can automatically access the knowledge needed for the appointment, even when there is no internet connectivity. The installed base also provides the home and context for the data and diagnostics that will be generated by the product itself from IoT data. |
• | Contractor management. |
• | Parts and returns. |
• | Crews and geo-location. drag-and drop interface. This allows dispatchers to instantly assign tasks to assembled service crews. Integration with ServiceMax Go also provides geo-location capabilities and notifications triggered by geo-fencing (such as leaving the job site). |
• | Scheduling and optimization. re-optimization for high priority work orders, as well as pre-configured predictive metrics reports that show optimization projections for utilization, drive time, service level agreements, and skill violations. |
• | Analytics. |
• | ServiceMax Go. |
• | ServiceMax Zinc. |
• | ServiceMax Engage. |
• | Manual, paper-based processes |
• | Internally developed enterprise applications |
• | Vendors with point solutions |
• | Add-on offerings from existing enterprise package software (e.g. ERP, CRM) |
• | Breadth and depth of functionality |
• | Total cost of ownership and return on investment |
• | Level of customer satisfaction |
• | Ease of deployment, implementation, and use |
• | Quality of implementation and customer support services |
• | Domain expertise in asset-centric service industries |
• | Ability to support compliance with legal and regulatory requirements |
• | Integrations with third-party applications and systems |
• | Ability to deliver on roadmap and strategic initiatives |
• | Leaders work for you |
• | We make decisions based on what creates value for the customer |
• | We work with urgency and a high level of collaboration because our customers need us to do so |
• | We care first about what is best for our customer, not what is best for a functional group |
• | We are brave, take risks together, and learn from failures together |
• | We care about each other’s families, communities, and environments that we live and work within |
• | We lead, not follow |
• | #Customerobsessed: first what is best for our customer |
• | #Wintogether: |
• | Conversion and implementation of new customers: SI ”) partners who will be increasingly responsible for delivering professional services to new customers, and therefore, professional services as a percentage of total revenue should decline. |
• | Long-term customer relationships: |
• | Expansion of solution adoption from existing customers: |
• | Investment in Research & Development: |
• | Investment in Sales and Marketing: COVID-19 pandemic. We plan to continue to invest in our sales and marketing efforts to grow our sales capacity, expand globally, enter new verticals, grow our strategic partnership programs, and strengthen our customer success |
organization. As the business continues to grow, we will increase investment in sales and marketing expenses, while decreasing sales and marketing expenses as a percentage of revenue. |
• | Proposed Business Combination with Pathfinder: Pathfinder ”) and Merger Sub, Serve Merger Sub (the “Business Combination Agreement ”). Pursuant to the Business Combination Agreement, and assuming a favorable vote of Pathfinder stockholders at the Pathfinder extraordinary general meeting and satisfaction or waiver of all other closing conditions, Serve Merger Sub, a newly formed direct, wholly-owned Delaware subsidiary of Pathfinder will merge with and into ServiceMax, Inc., with ServiceMax, Inc. surviving the merger. Existing stockholders of ServiceMax, Inc. will receive shares of common stock of Pathfinder in exchange for their shares of ServiceMax, Inc. based on an implied ServiceMax pre-transaction equity value of $1.425 billion. |
• | Acquisition of LiquidFrameworks: go-to-market |
• | Business Combination Accounting |
(In Thousands of US Dollars) |
July 31, 2020 |
October 31, 2020 |
January 31, 2021 |
April 30, 2021 |
July 31, 2021 |
|||||||||||||||
DBNR |
108 | % | 109 | % | 111 | % | 115 | % | 118 | % |
Year Ended January 31, |
Change in |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Revenue |
||||||||||||||||
Subscription |
$ | 91,326 | $ | 65,146 | $ | 26,180 | 40 | % | ||||||||
Professional services |
17,824 | 21,732 | (3,908 | ) | (18 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
109,150 | 86,878 | 22,272 | 26 | % | |||||||||||
Cost of revenue |
||||||||||||||||
Subscription |
44,854 | 45,183 | (329 | ) | (1 | %) | ||||||||||
Professional services |
20,339 | 21,355 | (1,016 | ) | (5 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
65,193 | 66,538 | (1,345 | ) | (2 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
43,957 | 20,340 | 23,617 | 116 | % | |||||||||||
Operating expenses |
||||||||||||||||
Sales and marketing |
68,305 | 79,081 | (10,776 | ) | (14 | %) | ||||||||||
Research and development |
26,445 | 30,387 | (3,942 | ) | (13 | %) | ||||||||||
General and administrative |
16,136 | 18,905 | (2,769 | ) | (15 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
110,886 | 128,373 | (17,487 | ) | (14 | %) | ||||||||||
Loss from operations |
(66,929 | ) | (108,033 | ) | 41,104 | (38 | %) | |||||||||
Interest income |
107 | 129 | (22 | ) | (17 | %) | ||||||||||
Loss on foreign exchange transactions |
(7 | ) | (614 | ) | 607 | (99 | %) | |||||||||
Other income (expense), net |
(13 | ) | 21 | (34 | ) | (162 | %) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense), net |
87 | (464 | ) | 551 | (119 | %) | ||||||||||
Loss before income taxes |
(66,842 | ) | (108,497 | ) | 41,655 | (38 | %) | |||||||||
Income Tax Benefit |
17,006 | 27,313 | (10,307 | ) | (38 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ |
(49,836 |
) |
$ |
(81,184 |
) |
$ |
31,348 |
(39 |
%) | ||||||
|
|
|
|
|
|
|
|
For the Six Months Ended July 31, |
Change in |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Revenue |
||||||||||||||||
Subscription |
53,237 | 43,720 | 9,517 | 22 | % | |||||||||||
Professional services |
8,958 | 9,398 | (440 | ) | (5 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
62,195 | 53,118 | 9,077 | 17 | % | |||||||||||
Cost of revenue |
||||||||||||||||
Subscription |
22,527 | 22,532 | (5 | ) | (0 | %) | ||||||||||
Professional services |
9,191 | 10,714 | (1,523 | ) | (14 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
31,718 | 33,246 | (1,528 | ) | (5 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
30,477 | 19,872 | 10,605 | 53 | % | |||||||||||
Operating expenses |
||||||||||||||||
Sales and marketing |
33,385 | 32,954 | 431 | 1 | % | |||||||||||
Research and development |
15,691 | 13,731 | 1,960 | 14 | % | |||||||||||
General and administrative |
11,526 | 8,792 | 2,734 | 31 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
60,602 | 55,477 | 5,125 | 9 | % | |||||||||||
Loss from operations |
(30,125 | ) | (35,605 | ) | 5,480 | (15 | %) | |||||||||
Interest income |
9 | 96 | (87 | ) | (91 | %) | ||||||||||
Gain (toss) on foreign exchange transactions |
(150 | ) | (107 | ) | (43 | ) | 40 | % | ||||||||
Other income (expense), net |
25 | (14 | ) | 39 | (279 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expenses), net |
(116 | ) | (25 | ) | (91 | ) | 364 | % | ||||||||
Loss before income taxes |
(30,241 | ) | (35,630 | ) | 5,389 | (15 | %) | |||||||||
Income tax benefit |
1,188 | 8,398 | (7,210 | ) | (86 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss and comprehensive loss |
(29,053 |
) |
(27,232 |
) |
(1,821 |
) |
7 |
% | ||||||||
|
|
|
|
|
|
|
|
Year Ended January 31, |
||||||||
2021 |
2020 |
|||||||
Net cash used in operating activities |
$ | (17,079 | ) | $ | (48,893 | ) | ||
Net cash used in investing activities |
$ | (3,028 | ) | $ | (9,416 | ) | ||
Net cash provided by financing activities |
$ | 84,457 | $ | 1,500 | ||||
Net increase/(decrease) in cash and cash equivalents |
$ | 64,350 | $ | (56,809 | ) |
Six Months Ended July 31, |
||||||||
2021 |
2020 |
|||||||
Net cash used in operating activities |
$ | (1,513 | ) | $ | (12,837 | ) | ||
Net cash used in investing activities |
$ | (93 | ) | $ | (1,114 | ) | ||
Net cash provided by (used in) financing activities |
$ | (2,309 | ) | $ | 84,716 | |||
Net decrease/increase in cash and cash equivalents |
$ | (3,915 | ) | $ | 70,765 |
• | Revenue Recognition |
• | Valuation of Goodwill and Intangible Assets |
• | Stock-based Compensation |
• | Identification of the contract, or contracts, with a customer. |
• | Identification of the performance obligations in the contract. |
• | Determination of the transaction price. |
• | Allocation of the transaction price to the performance obligations in the contract. |
• | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
As of July 31, |
As of January 31, | |||||
2021 |
2021 |
2020 | ||||
Time to liquidity event (years) |
1.0 – 1.8 | 1.0 – 2.3 | 2.3 – 4.0 | |||
Equity volatility |
40% - 50% |
40% - 50% | 40% | |||
Risk-free interest rate |
0.10% - 1.32% |
0.10% - 1.32% |
1.32% - 2.47% | |||
Discount |
30% | 30% | 30% |
• | Neil Barua, Chief Executive Officer; |
• | Mike Jerich, Chief Revenue Officer; and |
• | Dave Kahley, Senior Vice President, Customer Solutions. |
• | Base Salary. |
• | Bonuses. |
• | Equity Awards. |
Name and Position |
Year |
Salary ($) |
Bonuses ($) (1) |
Stock Awards ($) (2) |
Non-Equity Incentive Plan Compensation ($) (3) |
All Other Compensation ($) (4) |
Total ($) |
|||||||||||||||||||||
Neil Barua Chief Executive Officer |
2021 | $ | 450,000 | — | — | $ | 452,088 | — | $ | 902,088 | ||||||||||||||||||
Mike Jerich Chief Revenue Officer |
2021 | $ | 350,000 | — | — | $ | 334,922 | $ | 24,998 | $ | 709,920 | |||||||||||||||||
Dave Kahley Senior Vice President, Customer Solutions |
2021 | $ | 325,000 | $ | 150,000 | $ | 101,429 | $ | 146,384 | $ | 18,956 | $ | 741,769 |
(1) | The amount in this column represents the 2021 fiscal year portion of a sign-on cash bonus payable over three years made to Mr. Kahley in connection with the commencement of his employment during the 2020 fiscal year. In addition, Mr. Kahley was paid $200,000 in respect of his sign-on bonus for the 2020 fiscal year and is owed $150,000 in respect of the 2022 fiscal year. |
(2) | The amount in this column represents the aggregate grant date fair value of ServiceMax JV profits interest awards granted to the NEOs under the ServiceMax JV, LP Third Amended and Restated Limited Partnership Agreement, dated February 24, 2020, during the 2021 fiscal year, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. The assumptions used in the valuation of these awards are set forth in note 13 to the audited financial statements for fiscal year 2021. For details regarding the vesting conditions of these profits interests, see “ Outstanding Equity Awards at Fiscal Year-End |
(3) | The amounts in this column represent amounts earned in respect of services provided during the 2021 fiscal year pursuant to ServiceMax’s Executive Incentive Compensation Plan. Company performance achieved under the annual bonus plan for the 2021 fiscal year was at 90% of target. |
(4) | The amounts in this column represent ServiceMax’s 401(k) matching contributions made to Mr. Jerich and Mr. Kahley in the amounts of $6,750 and $5,147, respectively. In addition, the amount for Mr. Jerich includes imputed income resulting from a life insurance policy benefiting Mr. Jerich that was paid for by ServiceMax, and the amount for Mr. Kahley includes imputed income resulting from the receipt of sports memorabilia from ServiceMax. |
Name |
Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) (1) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (2) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) |
Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) |
|||||||||||||
Neil Barua |
5/9/2019 | — | — | 171,087 | $ | 1,545,087 | ||||||||||||
5/9/2019 | 421,033 | $ | 3,802,349 | 748,503 | $ | 6,759,731 | ||||||||||||
Mike Jerich |
7/31/2019 | 109,602 | $ | 989,815 | 175,363 | $ | 1,583,703 | |||||||||||
Dave Kahley |
12/30/2020 | — | — | 35,714 | $ | 240,034 | ||||||||||||
5/4/2020 | — | — | 35,714 | $ | 240,034 | |||||||||||||
11/6/2019 | 58,811 | $ | 531,123 | 85,543 | $ | 772,539 |
(1) | The amounts in this column represent the unvested portion of time-based profits interest awards held by the NEOs. ServiceMax granted 748,503 profits interests with time-based vesting conditions to Mr. Barua on May 9, 2019 (with a vesting commencement date of February 1, 2019), 175,363 profits interests with time-based vesting conditions to Mr. Jerich on July 31, 2019 (with a vesting commencement date of the same date) and 85,543 profits interests with time-based vesting conditions to Mr. Kahley on November 6, 2019 (with a vesting commencement date of September 9, 2019). The time-based profits interests vest 25% |
on the first anniversary of the grant date, and 6.25% on a quarterly basis thereafter. Accordingly, as of January 31, 2021, Mr. Barua’s time-based vesting profits interests were 43.75% vested, Mr. Jerich’s interests were 37.5% vested, and Mr. Kahley’s interests were 31.25% vested. |
(2) | The amounts in this column represent the estimated market value of the profits interests calculated based on the spread value based on the $20.72 per interest value of ServiceMax’s common interests calculated as of January 31, 2021. For the grants made in calendar year 2019, the spread value is equal to $9.031 per profits interest, and for the grants made in calendar year 2020, the spread value is equal to $6.721 per profits interest. |
(3) | The amounts in this column represent the unvested portion of performance-based profits interest awards held by the NEOs. ServiceMax made two grants of profits interests with performance-based vesting conditions to Mr. Barua on May 9, 2019: a grant of 171,087 interests and a grant of 748,503 interests. ServiceMax granted to Mr. Jerich 175,363 profits interests with performance-based vesting conditions on July 31, 2019, and granted to Mr. Kahley 35,714 profits interests with performance-based vesting conditions on December 30, 2020, 35,714 profits interests with performance-based vesting conditions on May 4, 2020, and 85,543 profits interests with performance-based vesting conditions on November 6, 2019. The performance-based profits interests were entitled to vest upon a change in control, based on the achievement of certain returns on investment. |
(4) | The amounts in this column represents the estimated market value of the profits interests calculated based on the spread value based on the $20.72 per interest value of ServiceMax’s common interests calculated as of January 31, 2021. For grants made in 2019, the spread is equal to $9.031 per profits interest, and for the grants made in 2020, the spread is equal to $6.721 per profits interest. |
• | The assumption, substitution or continuation of some or all awards (or any portion thereof) by the acquiror or surviving entity; |
• | The acceleration of exercisability or delivery of shares in respect of any award, in full or in part; and/or |
• | The cash payment in respect of some or all awards (or any portion thereof) equal to the difference between the fair market value of the shares subject to the award and its exercise or base price, if any. |
Name |
Fees Earned or Paid in Cash ($)(1) |
Total ($) | ||||||
Anthony Zingale |
$ | 125,000 | $ | 125,000 | ||||
Joerg Adams |
— | — | ||||||
Kenneth Hao |
— | — | ||||||
Doug Smith |
— | — | ||||||
Kyle Paster |
— | — | ||||||
Frank van Veenendaal |
$ | 75,000 | $ | 75,000 |
(1) | The amounts in this column represent an annual retainer paid monthly to each of Mr. Zingale and Mr. van Veenendaal pursuant to service agreements by and between ServiceMax and each director. |
Name |
Age |
Position | ||
Neil Barua |
44 | Chief Executive Officer, President and Director | ||
Simon Edwards |
35 | Chief Financial Officer | ||
Mike Jerich |
49 | Chief Revenue Officer | ||
Ellen O’Donnell |
58 | Chief Legal Officer | ||
Amit Jain |
38 | Chief Product Officer | ||
Sophie Ames |
56 | Chief Human Resource Officer | ||
David Kahley |
47 | Senior Vice President, Customer Solutions | ||
Liz Carter |
42 | Senior Vice President, Corporate Marketing | ||
Anthony Zingale |
65 | Chairman | ||
Frank Van Veenendaal |
62 | Director | ||
Kenneth Hao |
52 | Director | ||
Joerg Adams |
42 | Director | ||
Kyle Paster |
34 | Director | ||
David Chung |
54 | Director | ||
Felicia Alvaro |
60 | Director | ||
Callie Field |
43 | Director |
• | Class I, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2022; |
• | Class II, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2023; and |
• | Class III, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2024. |
• | appoint or replace, compensate and oversee the outside auditors, who will report directly to the audit committee, for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us; |
• | pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our outside auditors, subject to de minimis exceptions that are approved by the Audit Committee prior to the completion of the audit; |
• | review and discuss with management and the outside auditors the annual audited and quarterly unaudited financial statements, our disclosures under “ Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | discuss with management and the outside auditors any significant financial reporting issues and judgments made in connection with the preparation of our financial statements, including any significant changes in our selection or application of accounting principles, any major issues as to the adequacy of our internal controls and any special steps adopted in light of material control deficiencies. |
• | attract, retain and motivate senior management leaders who are capable of advancing ServiceMax’s mission and strategy and, ultimately, creating and maintaining its long-term equity value. Such leaders must engage in a collaborative approach and possess the ability to execute its business strategy in an industry characterized by competitiveness and growth; |
• | reward senior management in a manner aligned with ServiceMax’s financial performance; and |
• | align senior management’s interests with ServiceMax’s equity owners’ long-term interests through equity participation and ownership. |
• | each person known by Pathfinder to be the beneficial owner of more than 5% of Pathfinder’s outstanding ordinary shares on the record date; |
• | each person known by Pathfinder who may become beneficial owner of more than 5% of New SM’s outstanding Common Stock immediately following the Business Combination; |
• | each of Pathfinder’s current executive officers and directors; |
• | each person who will become an executive officer or a director of New SM upon consummation of the Business Combination; |
• | all of Pathfinder’s current executive officers and directors as a group; and |
• | all of New SM’s executive officers and directors as a group after the consummation of the Business Combination. |
Pre-Business Combinationand PIPE Investment |
Post-Business Combination and PIPE Investment |
|||||||||||||||||||||||
Class A/B Ordinary Shares |
Assuming No Redemptions |
Assuming Maximum Redemptions (10) |
||||||||||||||||||||||
Name and Address of Beneficial Owner |
Number of Shares |
% |
Number of Shares of New SM Common Stock |
% of New SM Common Stock |
Number of Shares of New SM Common Stock |
% of New SM Common Stock |
||||||||||||||||||
5% Holders |
||||||||||||||||||||||||
Pathfinder Acquisition LLC (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | 4.3 | % | ||||||||||||||
SLP Snowflake Aggregator, L.P. (5) |
— | — | 116,021,913 | 63.0 | % | 116,021,913 | 67.3 | % | ||||||||||||||||
Salesforce Ventures LLC (6) |
— | — | 10,242,298 | 5.3 | % | 10,242,298 | 5.9 | % | ||||||||||||||||
General Electric Company (7) |
— | — | 11,159,359 | 6.1 | % | 11,159,359 | 6.5 | % |
Pre-Business Combinationand PIPE Investment |
Post-Business Combination and PIPE Investment |
|||||||||||||||||||||||
Class A/B Ordinary Shares |
Assuming No Redemptions |
Assuming Maximum Redemptions (10) |
||||||||||||||||||||||
Name and Address of Beneficial Owner |
Number of Shares |
% |
Number of Shares of New SM Common Stock |
% of New SM Common Stock |
Number of Shares of New SM Common Stock |
% of New SM Common Stock |
||||||||||||||||||
Directors and Executive Officers Pre-Business Combination |
||||||||||||||||||||||||
Richard Lawson (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
David Chung (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
Lindsay Sharma (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
Lance Taylor (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
Hans Swildens (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
J. Steven Young (1) |
8,050,000 | (2)(3)(4) | 19.8 | % | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | |||||||||||||
Steven Walske (1) |
25,000 | (2) | * | 25,000 | * | 25,000 | * | |||||||||||||||||
Omar Johnson (1) |
25,000 | (2) | * | 25,000 | * | 25,000 | * | |||||||||||||||||
Paul Weiskopf (1) |
25,000 | (2) | * | 25,000 | * | 25,000 | * | |||||||||||||||||
All ServiceMax directors and executive officers as a group (twelve individuals) |
||||||||||||||||||||||||
Directors and Executive Officers Post-Business Combination |
||||||||||||||||||||||||
Neil Barua |
— | — | 1,096,764 | * | 1,096,764 | * | ||||||||||||||||||
Michael Jerich |
— | — | 207,146 | * | 207,146 | * | ||||||||||||||||||
David Kahley |
— | — | 131,993 | * | 131,993 | * | ||||||||||||||||||
Anthony Zingale |
— | — | 78,828 | * | 78,828 | * | ||||||||||||||||||
Frank van Veenendaal |
— | — | 173,731 | * | 173,731 | * | ||||||||||||||||||
Kenneth Hao (8) |
— | — | — | — | — | — | ||||||||||||||||||
Kyle Paster (8) |
— | — | — | — | — | — | ||||||||||||||||||
David Chung (1) |
8,050,000 | (2)(3)(4) | — | 8,050,000 | 4.4 | % | 7,360,157 | (9) | 4.3 | % | ||||||||||||||
Joerg Adams (8) |
— | — | — | — | — | — | ||||||||||||||||||
Felicia Alvaro |
— | — | — | * | — | * | ||||||||||||||||||
Callie Field |
— | — | — | * | — | * | ||||||||||||||||||
All New SM directors and executive officers as a group (13 individuals) |
6,128,151 |
6,128,151 |
* | Less than 1% |
(1) | Business address is 1950 University Avenue, Suite 350, Palo Alto, CA 94303. |
(2) | Interests shown consist solely of Class B ordinary shares of Pathfinder, which will automatically convert into Class A ordinary shares at the time of Pathfinder’s initial business combination. |
(3) | Represents 8,050,000 shares directly held by Pathfinder Acquisition LLC. |
(4) | HGGC Pathfinder Holdings I, LLC (“ HGGC Holdings ”) has the power to appoint three members to the board of managers of the Sponsor. Arrowhead Holdings, LLC (“Arrowhead ”) has the power to appoint a |
member to the board of managers of the Sponsor. Industry Ventures Tech Buyout Fund, LP (“ Tech Buyout ”) has the power to appoint two members to the board of managers of the Sponsor. The board of managers of the Sponsor exercises voting and dispositive power over all securities held by the Sponsor. Each of Mr. Lawson and Mr. Young is a member of the board of managers of HGGC Holdings, and each of Mr. Lawson, Mr. Young and Mr. Taylor has been appointed to the board of managers of the Sponsor by HGGC Holdings. Mr. Chung is the managing member of Arrowhead and has been appointed to the board of managers of the Sponsor by Arrowhead. Each of Ms. Sharma and Mr. Swildens is a member of the investment committee of IV Tech Buyout GP, LLC, the general partner of Tech Buyout, and has been appointed to the board of managers of the Sponsor by Tech Buyout. Accordingly, each of HGGC Holdings, Arrowhead, Tech Buyout, Mr. Lawson, Mr. Young, Mr. Taylor, Mr. Chung, Ms. Sharma and Mr. Swildens may be deemed to share dispositive power over the securities held by the Sponsor, and thus, may be deemed to be the beneficial owners of these securities. Each of HGGC Holdings, Arrowhead, Tech Buyout, Mr. Lawson, Mr. Young, Mr. Taylor, Mr. Chung, Ms. Sharma and Mr. Swildens disclaims beneficial ownership of any securities held by the Sponsor except to the extent of such entity’s or such person’s pecuniary interest therein. |
(5) | All shares of New SM common stock are held by held by SLP Snowflake Aggregator, L.P. The general partner of SLP Snowflake Aggregator, L.P. is SLP V Aggregator GP, L.L.C. The managing member of SLP V Aggregator GP, L.L.C. is Silver Lake Technology Associates V, L.P., and the general partner of Silver Lake Technology Associates V, L.P. is SLTA V (GP), L.L.C. The managing member of SLTA V (GP), L.L.C. is Silver Lake Group, L.L.C. The managing members of Silver Lake Group, L.L.C. are Egon Durban, Kenneth Hao, Gregory Mondre and Joseph Osnoss. Mr. Hao serves as a member of our board of directors. The address for each of the entities referenced above is c/o Silver Lake, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025. |
(6) | Salesforce Ventures LLC (“Salesforce Ventures”) is an indirect, wholly-owned subsidiary of salesforce.com, inc. (“Salesforce”). Salesforce may be deemed to have sole power to vote or dispose of the shares held by Salesforce Ventures. The address of Salesforce and Salesforce Ventures is Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, California 94105. |
(7) | General Electric Company (“GE”), a corporation incorporated under the laws of the State of New York. The principal business address and principal office address of GE is 5 Necco Street, Boston, Massachusetts 02210. |
(8) | The business address for nominees of Silver Lake is c/o Silver Lake, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025. |
(9) | Reflects the forfeiture of 689,843 Shares of New SM Common Stock pursuant to the terms of the Sponsor Letter Agreement assuming maximum redemptions as described in Footnote 10 below. |
(10) | Assumes that 33.96% of Pathfinder’s outstanding public shares are redeemed in connection with the Business Combination, which is the maximum amount of redemptions while still satisfying the condition to the consummation of the Business Combination that proceeds available for release from the trust account in connection with the transactions contemplated in the Business Combination Agreement together with the proceeds of the Stronghold Private Placement be equal to or greater than $225,000,000. |
Delaware |
Cayman Islands | |||
Stockholder/Shareholder Approval of Business Combinations |
Mergers generally require approval of a majority of all outstanding target shares. Mergers in which less than 20% of the acquirer’s stock is issued generally do not require acquirer stockholder approval. Mergers in which one corporation owns 90% or more of a second corporation may be completed without the vote of the second corporation’s board of directors or stockholders. |
Mergers require a special resolution, and any other authorization as may be specified in the relevant articles of association. Parties holding certain security interests in the constituent companies must also consent. All mergers (other than parent/subsidiary mergers) require shareholder approval—there is no exception for smaller mergers. Where a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining shareholders and thereby become the sole shareholder. A Cayman Islands company may also be acquired through a “scheme of arrangement” sanctioned by a Cayman Islands court and approved by 50%+1 in number and 75% in value of shareholders in attendance and voting at a shareholders’ meeting. | ||
Stockholder/Shareholder Votes for Routine Matters |
Generally, approval of routine corporate matters that are put to a stockholder vote require the affirmative vote of the majority of shares present in person or represented by proxy at a meeting at which a quorum is present and entitled to vote on the subject matter. | Under Cayman Islands law and the Existing Governing Documents, routine corporate matters may be approved by an ordinary resolution (being a resolution passed by a simple majority of the shareholders as being entitled to do so, attend and vote at a meeting). |
Delaware |
Cayman Islands | |||
Appraisal Rights |
Generally a stockholder of a publicly traded corporation does not have appraisal rights in connection with a merger. | Under the Cayman Islands Companies Act, minority shareholders that dissent to a merger are entitled, in certain circumstances, to be paid the fair value of their shares, which if necessary may ultimately be determined by the court. | ||
Inspection of Books and Records |
Any stockholder may inspect the corporation’s books and records for a proper purpose during the usual hours for business. | Shareholders generally do not have any rights to inspect or obtain copies of the register of shareholders or other corporate records of a company. | ||
Stockholder/Shareholder Lawsuits |
A stockholder may bring a derivative suit subject to procedural requirements (including adopting Delaware as the exclusive forum as per Advisory Governing Documents Proposal E). | In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. | ||
Fiduciary Duties of Directors |
Directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. | A director owes fiduciary duties to a company, including to exercise loyalty, honesty and good faith to the company as a whole. In addition to fiduciary duties, directors owe a duty of care, diligence and skill. Such duties are owed to the company but directors may be required to consider the interests of creditors or shareholders in certain limited circumstances. | ||
Indemnification of Directors and Officers |
A corporation is generally permitted to indemnify its directors and officers acting in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation. | A Cayman Islands company generally may indemnify its directors or officers except with regard to fraud or willful default. | ||
Limited Liability of Directors |
Permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. | Liability of directors may be unlimited, except with regard to their own fraud or willful default. |
• | the provisions regarding the size of the New SM Board and the election of directors pursuant to the Amended and Restated Registration and Shareholder Rights Agreement; |
• | the provisions regarding stockholder actions without a meeting; |
• | the provisions regarding calling special meetings of stockholders; |
• | the provisions regarding removal of directors; |
• | the provisions regarding the limited liability of directors of New SM; |
• | the provisions regarding competition and corporate opportunities; and |
• | the provisions regarding the election not to be governed by Section 203 of the DGCL. |
1. | the board of directors approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder; |
2. | the interested stockholder owns at least 85% of the outstanding voting stock of the corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans); or |
3. | the merger transaction is approved by the board of directors and at a meeting of stockholders, not by written consent, by the affirmative vote of 2/3 of the outstanding voting stock which is not owned by the interested stockholder. A Delaware corporation may elect in its certificate of incorporation or bylaws not to be governed by this particular Delaware law. |
• | prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
• | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or |
• | at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least 66-2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “ —Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided |
• | if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “ —Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments |
• | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day before the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share. |
Redemption Date (period to expiration of warrants) |
Fair Market Value of Class A Ordinary Shares |
|||||||||||||||||||||||||||||||||||
<10.00 |
11.00 |
12.00 |
13.00 |
14.00 |
15.00 |
16.00 |
17.00 |
>18.00 |
||||||||||||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 |
Redemption Date (period to expiration of warrants) |
Fair Market Value of Class A Ordinary Shares |
|||||||||||||||||||||||||||||||||||
<10.00 |
11.00 |
12.00 |
13.00 |
14.00 |
15.00 |
16.00 |
17.00 |
>18.00 |
||||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | 1% of the total number of New SM Common Stock then outstanding; or |
• | the average weekly reported trading volume of the New SM Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding twelve months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | not later than the close of business on the 90th day; and |
• | not earlier than the close of business on the 120th day before the one-year anniversary of the preceding year’s annual meeting. |
Page |
||||
Audited Financial Statements of Pathfinder Acquisition Corporation |
||||
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
Unaudited Condensed Financial Statements of Pathfinder Acquisition Corporation |
||||
F-18 |
||||
F-19 |
||||
F-20 |
||||
F-21 |
||||
F-22 |
||||
Audited Consolidated Financial Statements of ServiceMax, Inc. |
||||
F-39 |
||||
F-40 |
||||
F-41 |
||||
F-42 |
||||
F-43 |
||||
F-44 |
||||
Unaudited Condensed Consolidated Financial Statements of ServiceMax, Inc. |
||||
F-68 | ||||
F-69 | ||||
F-70 | ||||
F-71 | ||||
F-72 |
Assets: |
||||
Current assets: |
||||
Prepaid expenses |
$ | |||
Total current assets |
||||
Deferred offering costs associated with proposed public offering |
||||
Total Assets |
$ | |||
Liabilities and Shareholder’s Equity: |
||||
Current liabilities: |
||||
Accrued expenses |
$ | |||
Total current liabilities |
||||
Commitments and Contingencies |
||||
Shareholder’s Equity: |
||||
Preference shares, |
||||
Class A ordinary shares, |
— | |||
Class B ordinary shares, |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
Total shareholder’s equity |
||||
Total Liabilities and Shareholder’s Equity |
$ | |||
(1) |
This number includes up to |
General and administrative expenses |
$ | |||
Net loss |
$ | ( |
) | |
Weighted average shares outstanding, basic and diluted (1) |
||||
Basic and diluted net loss per share |
$ | ( |
) | |
(1) |
This number excludes an aggregate of up to 1,031,250 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. |
Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholder’s Equity |
|||||||||||||||||||||||||
Class A |
Class B |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance — December 18, 2020 (inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) |
||||||||||||||||||||||||||||
Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Balance — December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ |
(1) |
This number includes up to 1,031,250 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. |
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
||||
Net cash used in operating activities |
||||
Net change in cash |
||||
Cash — beginning of the period |
||||
Cash — end of the period |
$ | |||
Supplemental disclosure of noncash investing and financing activities: |
||||
Deferred offering costs included in accrued expenses |
$ | |||
Prepaid expenses paid by Sponsor in exchange for issuance of Class B ordinary shares |
$ |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of Class A ordinary shares to be determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A ordinary shares; |
• | if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
• | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
Page |
||||
F-18 |
||||
F-18 |
||||
F-18 |
||||
F-19 |
||||
F-20 |
||||
F-21 |
||||
F-22 |
Item 1. |
Condensed Financial Statements |
June |
December 31, 2020 |
|||||||
(Unaudited) |
||||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash |
$ | $ | ||||||
Prepaid expenses |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Deferred offering costs associated with initial public offering |
||||||||
Investments held in Trust Account |
||||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Shareholders’ Equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
$ |
— |
|||||
Accrued expenses |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Derivative warrant liabilities |
||||||||
Deferred underwriting commissions |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and Contingencies |
||||||||
Class A ordinary shares, $ $ June 30 , 2021 and December 31, 2020, respectively |
||||||||
Shareholders’ Equity: |
||||||||
Preference shares, $ |
||||||||
Class A ordinary shares, $ 29,823,880 and -0- June 30 , 2021 and December 31, 2020, respectively |
||||||||
Class B ordinary shares, $ June 30 , 2021 and December 31, 2020 |
||||||||
Additional paid-in capital |
||||||||
Retained earnings (accumulated deficit) |
( |
) | ||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Equity |
$ | $ | ||||||
|
|
|
|
For the Three Months Ended June 30, 2021 |
For the Six Months Ended June 30, 2021 |
|||||||
General and administrative expenses |
$ | $ |
||||||
General and administrative expenses — related party |
||||||||
Loss from operations |
( |
) | ( |
) | ||||
Other income (expense) |
||||||||
Change in fair value of derivative warrant liabilities |
||||||||
Offering costs associated with derivative warrant liabilities |
— | ( |
) | |||||
Income from investments held in Trust Account |
||||||||
Net income |
$ | $ |
||||||
Weighted average shares outstanding of Class A ordinary share |
||||||||
Basic and diluted net income per share, Class A ordinary share |
$ | $ |
||||||
Weighted average shares outstanding of Class B ordinary share |
||||||||
Basic and diluted net income per share, Class B ordinary share |
$ | $ |
Ordinary Shares |
Additional Paid-in Capital |
Retained Earnings (Accumulated Deficit) |
Total Shareholders’ Equity |
|||||||||||||||||||||||||
Class A |
Class B |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance —December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Sale of units in initial public offering, net of fair value of public warrant liabilities |
||||||||||||||||||||||||||||
Excess cash received over the fair value of the private warrants |
— | — | ||||||||||||||||||||||||||
Offering costs |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Class A ordinary shares subject to possible redemption |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — March 31, 2021 (Unaudited) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Forfeiture of Class B ordinary shares |
— |
( |
) |
( |
) |
|||||||||||||||||||||||
Class A ordinary shares subject to possible redemption |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||
Net income |
— |
— |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — June 30, 2021 (Unaudited) |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
Financing costs — derivative warrant liabilities |
||||
Income from investments held in Trust Account |
( |
) | ||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accounts payable |
||||
Accrued expenses |
||||
Net cash used in operating activities |
( |
) | ||
Cash Flows from Investing Activities |
||||
Cash deposited in Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash Flows from Financing Activities: |
||||
Proceeds from note payable to related party |
||||
Repayment of note payable to related party |
( |
) | ||
Proceeds received from initial public offering |
||||
Proceeds received from private placement |
||||
Offering costs paid |
( |
) | ||
Net cash provided by financing activities |
||||
Net increase in cash |
||||
Cash — beginning of the period |
||||
Cash — end of the period |
$ | |||
Supplemental disclosure of noncash investing and financing activities: |
||||
Offering costs included in accrued expenses |
$ | |||
Offering costs paid by related party under note payable |
$ | |||
Deferred underwriting commissions in connection with the initial public offering |
$ | |||
Initial value of Class A ordinary shares subject to possible redemption |
$ | |||
Change in value of Class A ordinary shares subject to possible redemption |
$ | ( |
) |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price (the “closing price ”) of Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• |
in whole and not in part; |
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of Class A ordinary shares to be determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A ordinary shares; |
• |
if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
• |
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||
Assets: |
||||||||||||
Investments held in Trust Account — money market fund |
$ | $ | $ | |||||||||
Liabilities: |
||||||||||||
Derivative warrant liabilities — Public warrants |
$ |
$ |
$ |
|||||||||
Derivative warrant liabilities — Private placement warrants |
$ | $ | $ |
February 19, 2021 |
||||
Exercise price |
$ | |||
Unit price |
$ | |||
Volatility |
% | |||
Term (years) |
||||
Risk-free rate |
% |
Derivative warrant liabilities at January 1, 2021 |
$ | |||
Issuance of Public and Private Warrants |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
|||
Derivative warrant liabilities at March 31, 2021 |
$ | |||
Transfer of Public Warrants to Level 1 |
( |
) | ||
Transfer of Private Warrants to Level 2 |
( |
) | ||
Change in fair value of derivative warrant liabilities |
||||
|
|
|||
Derivative warrant liabilities at June 30, 2021 |
$ |
|||
|
|
As of January 31, |
||||||||
2021 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 81,169 | $ | 16,819 | ||||
Accounts receivable, net |
35,977 | 34,989 | ||||||
Accounts receivable – related parties |
3,600 | 3,439 | ||||||
Prepaid expenses |
2,062 | 2,720 | ||||||
Deferred sales commissions |
1,761 | 958 | ||||||
Other assets |
2,569 | 3,072 | ||||||
|
|
|
|
|||||
Total current assets |
127,138 | 61,997 | ||||||
Property and equipment, net |
669 | 1,007 | ||||||
Internally developed software, net |
2,739 | — | ||||||
Operating lease right-of-use |
7,141 | 10,129 | ||||||
Goodwill |
373,825 | 373,825 | ||||||
Intangible assets, net |
118,272 | 156,028 | ||||||
Deferred sales commissions, noncurrent |
3,755 | 2,967 | ||||||
Deposits and other long-term assets |
1,318 | 1,321 | ||||||
|
|
|
|
|||||
Total assets |
634,857 |
607,274 |
||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDER’S EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
4,119 | 7,989 | ||||||
Accounts payable – related parties |
983 | 3,136 | ||||||
Accrued expenses |
13,716 | 9,435 | ||||||
Operating lease liabilities |
2,440 | 2,898 | ||||||
Unearned revenue |
66,971 | 56,110 | ||||||
|
|
|
|
|||||
Total current liabilities |
88,229 | 79,568 | ||||||
Operating lease liabilities, noncurrent |
5,023 | 7,342 | ||||||
Unearned revenue, noncurrent |
4,930 | 2,068 | ||||||
Deferred tax liability, net |
4,795 | 22,636 | ||||||
Other long-term liabilities |
177 | 166 | ||||||
|
|
|
|
|||||
Total liabilities |
103,154 | 111,780 | ||||||
Commitments and contingencies (Note 18) |
— | — | ||||||
Common stock $0.01 par, 100 shares issued and outstanding as of January 31, 2021 and 2020 |
— | — | ||||||
Additional paid-in capital |
662,723 | 576,678 | ||||||
Accumulated deficit |
(131,020 | ) | (81,184 | ) | ||||
|
|
|
|
|||||
Total stockholder’s equity |
531,703 | 495,494 | ||||||
|
|
|
|
|||||
Total liabilities and stockholder’s equity |
$ |
634,857 |
$ |
607,274 |
||||
|
|
|
|
For the Year Ended January 31, |
||||||||
2021 |
2020 |
|||||||
Revenue |
||||||||
Subscription |
$ | 91,326 | $ | 65,146 | ||||
Professional services |
17,824 | 21,732 | ||||||
|
|
|
|
|||||
109,150 | 86,878 | |||||||
Cost of revenue |
||||||||
Subscription |
44,854 | 45,183 | ||||||
Professional services |
20,339 | 21,355 | ||||||
|
|
|
|
|||||
Total cost of revenue |
65,193 | 66,538 | ||||||
|
|
|
|
|||||
Gross profit |
43,957 | 20,340 | ||||||
Operating expenses |
||||||||
Sales and marketing |
68,305 | 79,081 | ||||||
Research and development |
26,445 | 30,387 | ||||||
General and administrative |
16,136 | 18,905 | ||||||
|
|
|
|
|||||
Total operating expenses |
110,886 | 128,373 | ||||||
Loss from operations |
(66,929 | ) | (108,033 | ) | ||||
Interest income |
107 | 129 | ||||||
Loss on foreign exchange transactions |
(7 | ) | (614 | ) | ||||
Other income (expense), net |
(13 | ) | 21 | |||||
|
|
|
|
|||||
Total other income (expense), net |
87 | (464 | ) | |||||
Loss before income taxes |
(66,842 | ) | (108,497 | ) | ||||
Income tax benefit |
17,006 | 27,313 | ||||||
|
|
|
|
|||||
Net loss and comprehensive loss |
$ |
(49,836 |
) |
$ |
(81,184 |
) | ||
|
|
|
|
|||||
Loss per common share: |
||||||||
Basic and diluted |
$ | (498 | ) | $ | (812 | ) | ||
Weighted average shares: |
||||||||
Basic and diluted |
100 | 100 |
Common Shares |
Additional |
Accumulated |
||||||||||||||||||
$ 0.01 Par |
Paid-in |
|||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Total |
||||||||||||||||
Application of pushdown accounting - February 1, 2019 |
100 | $ | — | $ | 574,096 | $ | — | $ | 574,096 | |||||||||||
Capital contributions from ServiceMax, JV, LP |
— | — | 1,500 | — | 1,500 | |||||||||||||||
Stock-based compensation |
— | — | 1,082 | — | 1,082 | |||||||||||||||
Net loss |
— | — | — | (81,184 | ) | (81,184 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance - January 31, 2020 |
100 | — | 576,678 | (81,184 | ) | 495,494 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Capital contributions from ServiceMax, JV, LP |
— | — | 84,457 | — | 84,457 | |||||||||||||||
Stock-based compensation |
— | — | 1,588 | — | 1,588 | |||||||||||||||
Net loss |
— | — | — | (49,836 | ) | (49,836 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance - January 31, 2021 |
100 | $ | — | $ | 662,723 | $ | (131,020 | ) | $ | 531,703 | ||||||||||
|
|
|
|
|
|
|
|
|
|
For the Year Ended January 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (49,836 | ) | $ | (81,184 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
547 | 242 | ||||||
Amortization of intangible assets |
37,756 | 37,672 | ||||||
Amortization of internally developed software |
80 | — | ||||||
Amortization of deferred sales commission |
1,369 | 1,251 | ||||||
Stock-based compensation expense |
1,600 | 1,249 | ||||||
Bad debt expense |
508 | 371 | ||||||
Noncash lease expense |
3,070 | 3,000 | ||||||
Deferred income tax benefit |
(17,841 | ) | (28,278 | ) | ||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
(1,496 | ) | (5,018 | ) | ||||
Accounts receivable – related parties |
(161 | ) | (1,775 | ) | ||||
Prepaid expenses |
658 | (2,347 | ) | |||||
Other current assets |
502 | 3,202 | ||||||
Deferred sales commissions |
(2,960 | ) | (5,176 | ) | ||||
Deposits and other assets |
3 | (1,002 | ) | |||||
Accounts payable |
(3,870 | ) | 3,758 | |||||
Accounts payable – related party |
(2,153 | ) | 1,807 | |||||
Accrued expense |
4,280 | 1,869 | ||||||
Unearned revenue |
13,723 | 24,356 | ||||||
Operating lease liabilities |
(2,858 | ) | (2,890 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
(17,079 |
) |
(48,893 |
) | ||||
Cash flows from investing activities |
||||||||
Acquisition of Zinc, Inc. - net of cash acquired |
— | (8,397 | ) | |||||
Purchases of property and equipment |
(209 | ) | (1,019 | ) | ||||
Capitalization of internally developed software |
(2,819 | ) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities |
(3,028 |
) |
(9,416 |
) | ||||
Cash flows from financing activities |
||||||||
Capital contributions from ServiceMax, JV, LP |
84,457 | 1,500 | ||||||
|
|
|
|
|||||
Net cash flows provided by financing activities |
84,457 |
1,500 |
||||||
Net increase (decrease) in cash and cash equivalents |
64,350 |
(56,809 |
) | |||||
Cash and cash equivalents, beginning of year |
16,819 | 73,628 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of year |
$ |
81,169 |
$ |
16,819 |
||||
|
|
|
|
|||||
Supplemental disclosures of cash financing activities: |
||||||||
Income taxes paid |
770 |
844 |
||||||
|
|
|
|
Estimated Useful Lives | ||
(in years) | ||
Computer equipment |
2 | |
Computer software |
2 | |
Furniture & Fixtures |
5 | |
Leasehold improvement |
Shorter of estimated useful life or lease term |
Estimated Amortizable Life (in years) | ||
Trademark and trade names |
3 | |
Developed technology |
5 | |
Customer-based - order backlog |
3 | |
Customer-based - contracts and relationships |
6 - 8 |
• | Identification of the contract, or contracts, with a customer. |
• | Identification of the performance obligations in the contract. |
• | Determination of the transaction price. |
• | Allocation of the transaction price to the performance obligations in the contract. |
• | Recognition of revenue when, or as, we satisfy a performance obligation. |
Fair value of consideration transferred |
$ | 574,096 | ||
Estimated fair value of assets acquired: |
||||
Cash |
73,629 | |||
Accounts receivable |
31,464 | |||
Prepaid expenses and other current assets |
6,546 | |||
Deferred tax asset |
67 | |||
Property and equipment |
231 | |||
Other assets |
319 | |||
Developed technology |
97,000 | |||
Customer relationships |
62,000 | |||
Order backlog |
25,000 | |||
Trademark and tradename |
2,600 | |||
|
|
|||
Total assets acquired |
$ |
298,856 |
||
Estimated fair value of liabilities assumed: |
||||
Accounts payable |
(1,784 | ) | ||
Payable to related party |
(3,742 | ) | ||
Accrued and other current liabilities |
(7,379 | ) | ||
Unearned revenue |
(33,000 | ) | ||
Deferred tax liability |
(50,165 | ) | ||
|
|
|||
Total liabilities assumed |
$ |
(96,070 |
) | |
Goodwill |
$ | 371,310 |
Acquired Assets and Liabilities |
Methods and Assumptions | |
Developed technology | The Company utilized an income approach, specifically the Multi-Period Earning method (MPEEM) for valuation of the developed technology | |
Customer relationships | The Company utilized the With and Without Method of the Income Approach as being the most appropriate to value the customer relationships. | |
Order backlog | The Company utilized an income approach specifically the MPEEM for valuation of order backlog | |
Trademark and trade name | The Company utilized an income approach, specifically the relief from royalty method (RFR) for the valuation of trademarks and trade names | |
Unearned revenue | Fair value determined to be equivalent to the estimated cost of future performance obligations assumed. |
• | Acquisition of Zinc, Inc. |
Fair value of consideration transferred |
$ | 9,441 | ||
Estimated fair value of assets acquired: |
||||
Cash |
1,043 | |||
Accounts receivable |
541 | |||
Prepaid expenses and other current assets |
100 | |||
Developed technology |
6,700 | |||
Customer relationships |
400 | |||
|
|
|||
Total assets acquired |
$ |
8,784 |
||
Estimated fair value of liabilities assumed: |
||||
Accounts payable |
(33 | ) | ||
Accrued and other current liabilities |
(187 | ) | ||
Unearned revenue |
(822 | ) | ||
Deferred tax liability |
(816 | ) | ||
|
|
|||
Total liabilities assumed |
$ |
(1,858 |
) | |
Goodwill |
$ | 2,515 |
Acquired Assets and Liabilities |
Methods and Assumptions | |
Developed technology | The cost approach was used. Under this method the assets are valued based on the cost to a market participant to acquire a substitute asset of comparable utility, adjusted for obsolescence | |
Customer relationships | The cost approach was used. Under this method the assets are valued based on the cost to a market participant to acquire a substitute asset of comparable utility, adjusted for obsolescence. | |
Unearned revenue | Fair value determined to be equivalent to the estimated cost of future performance obligations assumed. |
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Revenues: |
||||||||
Subscription |
$ | 91,326 | $ | 65,146 | ||||
Professional services |
17,824 | 21,732 | ||||||
|
|
|
|
|||||
Total |
$ |
109,150 |
$ |
86,878 |
||||
|
|
|
|
|||||
Percentage of revenues: |
||||||||
Subscription |
83.67 | % | 74.99 | % | ||||
Professional services |
16.33 | % | 25.01 | % | ||||
|
|
|
|
|||||
Total |
100.00 |
% |
100.00 |
% | ||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Unbilled receivables |
$ | 39,364 | $ | 37,526 | ||||
Contract asset |
213 | 902 | ||||||
|
|
|
|
|||||
Total contract asset |
39,577 |
38,428 |
||||||
|
|
|
|
|||||
Unearned revenue - current |
66,971 | 56,110 | ||||||
Unearned revenue - noncurrent |
4,930 | 2,068 | ||||||
|
|
|
|
|||||
Total contract liabilities |
$ |
71,901 |
$ |
58,178 |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Unearned revenue - beginning of period |
$ | 58,178 | $ | 50,231 | ||||
Billings and contributions from contract assets |
122,643 | 94,732 | ||||||
Revenue recognized |
(108,920 | ) | (86,785 | ) | ||||
|
|
|
|
|||||
Unearned revenue - end of period |
$ |
71,901 |
$ |
58,178 |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Computer software |
$ | 24 | $ | 24 | ||||
Computer equipment |
1,255 | 1,036 | ||||||
Furniture and fixtures |
119 | 117 | ||||||
Leasehold improvements |
80 | 78 | ||||||
|
|
|
|
|||||
Total property and equipment |
1,478 | 1,255 | ||||||
Accumulated depreciation and amortization |
(809 | ) | (248 | ) | ||||
|
|
|
|
|||||
Total property and equipment, net |
$ |
669 |
$ |
1,007 |
||||
|
|
|
|
For Years Ended, January 31 |
||||||||
2021 |
2020 |
|||||||
Internally developed software - capitalized |
$ | 2,819 | $ | — | ||||
Accumulated depreciation and amortization |
(80 | ) | — | |||||
|
|
|
|
|||||
Total internally developed software, net |
$ |
2,739 |
$ |
— |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Beginning goodwill |
$ | 373,825 | $ | — | ||||
SLP-SA acquisition |
— | 371,310 | ||||||
Zinc acquisition |
— | 2,515 | ||||||
|
|
|
|
|||||
Ending goodwill |
$ |
373,825 |
$ |
373,825 |
||||
|
|
|
|
Gross Amount |
Accumulated Amortization |
Net Carrying Value |
||||||||||
Intangible assets, net: |
||||||||||||
Trademark and trade name |
$ | 2,600 | $ | (1,733 | ) | $ | 867 | |||||
Developed technology |
103,700 | (41,400 | ) | 62,300 | ||||||||
Order backlog |
25,000 | (16,666 | ) | 8,334 | ||||||||
Customer relationships |
62,400 | (15,629 | ) | 46,771 | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
193,700 |
$ |
(75,428 |
) |
$ |
118,272 |
|||||
|
|
|
|
|
|
Gross Amount |
Accumulated Amortization |
Net Carrying Value |
||||||||||
Intangible assets, net: |
||||||||||||
Trademark and trade name |
$ | 2,600 | $ | (866 | ) | $ | 1,734 | |||||
Developed technology |
103,700 | (20,660 | ) | 83,040 | ||||||||
Order backlog |
25,000 | (8,333 | ) | 16,667 | ||||||||
Customer relationships |
62,400 | (7,813 | ) | 54,587 | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
193,700 |
$ |
(37,672 |
) |
$ |
156,028 |
|||||
|
|
|
|
|
|
For Years Ending, January 31, |
||||
2022 |
$ | 37,758 | ||
2023 |
28,557 | |||
2024 |
28,557 | |||
2025 |
7,896 | |||
2026 |
7,754 | |||
Thereafter |
7,750 | |||
|
|
|||
Total |
$ |
118,272 |
||
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Accrued payroll and benefits |
$ | 1,692 | $ | 1,005 | ||||
Accrued bonuses |
5,819 | 3,299 | ||||||
Accrued commissions |
3,394 | 1,420 | ||||||
Accrued severance |
— | 796 | ||||||
Accrued implementation partner fees |
373 | 259 | ||||||
Accrued sales taxes |
1,450 | 1,132 | ||||||
Accrued income taxes |
340 | 698 | ||||||
Other accrued expenses |
648 | 826 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ |
13,716 |
$ |
9,435 |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Operating Right-of-use |
$ |
7,141 |
$ |
10,129 |
||||
|
|
|
|
|||||
Liabilities |
||||||||
Lease liabilities |
$ | 2,440 | $ | 2,898 | ||||
Lease liabilities, non-current |
5,023 | 7,342 | ||||||
|
|
|
|
|||||
Total Operating lease liability |
$ |
7,463 |
$ |
10,240 |
||||
|
|
|
|
For Year Ending, January 31, |
||||
2022 |
$ | 2,884 | ||
2023 |
2,955 | |||
2024 |
1,573 | |||
2025 |
535 | |||
2026 |
343 | |||
Thereafter |
— | |||
|
|
|||
Total |
8,290 | |||
Less amount representing interest |
(827 | ) | ||
|
|
|||
Present value of lease liabilities |
$ |
7,463 |
||
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Supplemental Cash Flow Information |
||||||||
Operating lease right of use assets and lease liability recorded upon adoption of ASC 842 |
$ | — | $ | 11,284 | ||||
Operating lease right of use assets and lease liability recorded upon lease renewal |
$ | — | $ | 1,846 |
• | The first 25% of the time-based Class B Units vest on first anniversary of the date of hire, and for additional grants on the grant date; then 6.25% of the remaining time-based units vest each quarter thereafter. There is no acceleration of time-based units in the case of a liquidation event. Any time-based units that are unvested at the time of a liquidation event are not required to be but may be cashed out or converted to a different type of award, at our discretion. The vesting of the time-based Class B Units is subject to the employee’s continued employment through the applicable vesting date. |
• | Performance-based vesting occurs only if the holder is employed with us at the time of a liquidation event that returns at least 1.5 times the actual capital investment made by Silver Lake Partners (“SLP”) during the life of its investment. In the event of a sale of 100% of the stock held by SLP, the performance-based Class B Units will vest on a sliding scale in accordance with the multiple of money received by SLP: 25% of the grant will vest if SLP receives 1.5 times its investment, gradually rising on a linear basis for the remaining 75% if SLP receives up to 4.5 times its investment. Any Class B Units that remain unvested after SLP has disposed of 100% of its interest in ServiceMax will be cancelled. As of and for the years ended January 31, 2021 and 2020, the performance condition was not considered probable of being achieved and accordingly no expense was recorded associated with these awards. |
• | For our non-US employees, the Class B Units are settled in cash in accordance with the requirements of the foreign country and are subject to local country practices. |
2021 |
2020 | |||
Time to liquidity event (years) |
1.0 – 2.3 | 2.3 – 4.0 | ||
Equity volatility |
40% - 50% |
40% | ||
Risk-free interest rate |
0.10% - 1.32% |
1.32% - 2.47% | ||
Discount |
30% | 30% |
Class B Units Outstanding |
Weighted Average Exercise Price |
Aggregate Intrinsic Value |
Weighted Average Contractual Terms (Years) |
|||||||||||||
Outstanding, January 31, 2020 |
4,495 |
$ | 11.69 | $ | 10,384 | 3.10 | ||||||||||
Granted |
1,335 | $ | 13.74 | |||||||||||||
Canceled |
(544 | ) | $ | 11.98 | ||||||||||||
|
|
|||||||||||||||
Outstanding, January 31, 2021 |
5,286 |
$ | 12.23 | $ | 44,859 | 2.49 | ||||||||||
|
|
|||||||||||||||
Exercisable, January 31, 2021 |
836 | $ | 11.69 | $ | 7,550 | |||||||||||
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Cost of revenue |
$ | 151 | $ | 104 | ||||
Sales and marketing |
378 | 271 | ||||||
General and administrative |
821 | 634 | ||||||
Research and development |
250 | 240 | ||||||
|
|
|
|
|||||
Total stock-based compensation expense |
$ |
1,600 |
$ |
1,249 |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Current Tax Expense |
||||||||
Federal |
$ | — | $ | — | ||||
State |
104 | 143 | ||||||
Foreign |
731 | 822 | ||||||
|
|
|
|
|||||
Total current tax expense |
$ | 835 | $ | 965 | ||||
Deferred tax expense (benefit) |
||||||||
Federal |
(13,750 | ) | (22,792 | ) | ||||
State |
(3,944 | ) | (5,584 | ) | ||||
Foreign |
(147 | ) | 98 | |||||
|
|
|
|
|||||
Total deferred tax benefit |
$ | (17,841 | ) | $ | (28,278 | ) | ||
|
|
|
|
|||||
Income tax benefit |
$ |
(17,006 |
) |
$ |
(27,313 |
) | ||
|
|
|
|
For Years Ended, January 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Amount |
Percentage |
Amount |
Percentage |
|||||||||||||
Federal statutory tax rate |
$ | (14,037 | ) | 21.00 | % | $ | (22,785 | ) | 21.00 | % | ||||||
State tax - net of federal benefit |
(3,863 | ) | 5.78 | % | (5,471 | ) | 5.04 | % | ||||||||
Permanent items |
834 | (1.25 | %) | 750 | (0.69 | %) | ||||||||||
Return to provision adjustment |
(147 | ) | 0.22 | % | — | — | ||||||||||
Change in the valuation allowance |
13 | (0.02 | %) | — | — | |||||||||||
Foreign tax differential and permanent items |
194 | (0.29 | %) | 193 | (0.18 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Benefit income taxes and effective tax rate |
$ |
(17,006 |
) |
25.44 |
% |
$ |
(27,313 |
) |
25.17 |
% | ||||||
|
|
|
|
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss carryover |
$ | 27,104 | $ | 21,402 | ||||
Compensation accrual |
1,389 | 1,833 | ||||||
Lease liability |
1,262 | 1,864 | ||||||
Accrued expenses |
330 | 315 | ||||||
Unearned revenue |
806 | 1,130 | ||||||
Other |
134 | 65 | ||||||
Other (foreign) |
170 | 54 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
31,195 | 26,663 | ||||||
Valuation allowance |
(6,802 | ) | (6,789 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ |
24,393 |
$ |
19,874 |
||||
|
|
|
|
|||||
Deferred Tax liability: |
||||||||
Intangible assets |
(27,966 | ) | (40,646 | ) | ||||
ROU asset |
(1,222 | ) | (1,834 | ) | ||||
Other |
— | (30 | ) | |||||
|
|
|
|
|||||
Total deferred tax liabilities |
(29,188 | ) | (42,510 | ) | ||||
|
|
|
|
|||||
Net deferred tax liabilities |
$ |
(4,795 |
) |
$ |
(22,636 |
) | ||
|
|
|
|
TSA |
GESA |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Paid |
$ | 1,264 | $ | 2,114 | $ | 2,593 | $ | 3,634 | ||||||||
Payable balance |
$ | — | $ | 1,043 | $ | — | $ | 1,866 |
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
Money Market Fund |
$ | 288 | $ | 288 | $ | — | $ | — | ||||||||
Governmental Fund |
70,126 | — | 70,126 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
70,414 |
$ |
288 |
$ |
70,126 |
$ |
— |
||||||||
|
|
|
|
|
|
|
|
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
Money Market Fund |
$ | 288 | $ | 288 | $ | — | $ | — | ||||||||
Governmental Fund |
5,546 | — | 5,546 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
5,834 |
$ |
288 |
$ |
5,546 |
$ |
— |
||||||||
|
|
|
|
|
|
|
|
For Years Ended January 31, |
||||||||
2021 |
2020 |
|||||||
Numerator: |
||||||||
Net loss available to common shareholders |
$ | (49,836 | ) | $ | (81,184 | ) | ||
Denominator: |
||||||||
Weighted average common shares outstanding – basic and diluted |
100 | 100 | ||||||
|
|
|
|
|||||
Net loss per share attributable to common shareholders - basic and diluted loss per share |
$ |
(498 |
) |
$ |
(812 |
) | ||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
Americas |
$ | 55,543 | $ | 49,049 | ||||
Europe, Middle East, and Africa |
44,823 | 30,306 | ||||||
Asia Pacific |
8,784 | 7,523 | ||||||
|
|
|
|
|||||
Total revenues |
$ |
109,150 |
$ |
86,878 |
||||
|
|
|
|
For Years Ended, January 31, |
||||||||
2021 |
2020 |
|||||||
North America |
$ | 163 | $ | 311 | ||||
Europe, Middle East, and Africa |
60 | 170 | ||||||
Asia Pacific |
446 | 526 | ||||||
|
|
|
|
|||||
Total property and equipment, net |
$ | 669 | $ | 1,007 | ||||
|
|
|
|
As of July 31, |
As of January 31, |
|||||||
2021 |
2021 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 77,254 | $ | 81,169 | ||||
Accounts receivable, net |
27,853 | 35,977 | ||||||
Accounts receivable – related party |
1,406 | 3,600 | ||||||
Prepaid expenses |
1,992 | 2,062 | ||||||
Deferred sales commissions |
2,269 | 1,761 | ||||||
Other assets |
2,210 | 2,569 | ||||||
|
|
|
|
|||||
Total current assets |
112,984 | 127,138 | ||||||
Property and equipment, net |
436 | 669 | ||||||
Internally developed software, net |
2,529 | 2,739 | ||||||
Operating lease right-of-use |
8,094 | 7,141 | ||||||
Goodwill |
373,825 | 373,825 | ||||||
Intangible assets, net |
99,394 | 118,272 | ||||||
Deferred sales commissions, noncurrent |
4,568 | 3,755 | ||||||
Deferred public offering costs |
5,129 | — | ||||||
Deposits and other long-term assets |
894 | 1,318 | ||||||
|
|
|
|
|||||
Total assets |
607,853 |
634,857 |
||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDER’S EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
5,118 | 4,119 | ||||||
Accounts payable – related parties |
1,789 | 983 | ||||||
Accrued expenses |
14,922 | 13,716 | ||||||
Operating lease liabilities |
3,143 | 2,440 | ||||||
Unearned revenue |
68,476 | 66,971 | ||||||
|
|
|
|
|||||
Total current liabilities |
93,448 | 88,229 | ||||||
Operating lease liabilities, noncurrent |
5,266 | 5,023 | ||||||
Unearned revenue, noncurrent |
2,077 | 4,930 | ||||||
Deferred tax liability, net |
3,182 | 4,795 | ||||||
Other long-term liabilities |
413 | 177 | ||||||
|
|
|
|
|||||
Total liabilities |
104,386 | 103,154 | ||||||
Commitments and contingencies (Note 12) |
||||||||
Common stock $0.01 par, 100 shares issued and outstanding as of July 31, 2021 and January 31, 2021 |
— | — | ||||||
Additional paid-in capital |
663,540 | 662,723 | ||||||
Accumulated deficit |
(160,073 | ) | (131,020 | ) | ||||
|
|
|
|
|||||
Total stockholder’s equity |
503,467 | 531,703 | ||||||
|
|
|
|
|||||
Total liabilities and stockholder’s equity |
$ |
607,853 |
$ |
634,857 |
||||
|
|
|
|
For the Six Months Ended July 31, |
||||||||
2021 |
2020 |
|||||||
(Unaudited) |
||||||||
Revenue |
||||||||
Subscription |
$ | 53,237 | $ | 43,720 | ||||
Professional services |
8,958 | 9,398 | ||||||
|
|
|
|
|||||
Total revenue |
62,195 | 53,118 | ||||||
Cost of revenue |
||||||||
Subscription |
22,527 | 22,532 | ||||||
Professional services |
9,191 | 10,714 | ||||||
|
|
|
|
|||||
Total cost of revenue |
31,718 | 33,246 | ||||||
Subscription |
30,710 | 21,188 | ||||||
Professional services |
(233 | ) | (1,316 | ) | ||||
|
|
|
|
|||||
Gross profit |
30,477 | 19,872 | ||||||
Operating expenses |
||||||||
Sales and marketing |
33,385 | 32,954 | ||||||
Research and development |
15,691 | 13,731 | ||||||
General and administrative |
11,526 | 8,792 | ||||||
|
|
|
|
|||||
Total operating expenses |
60,602 | 55,477 | ||||||
Loss from operations |
(30,125 | ) | (35,605 | ) | ||||
Interest income |
9 | 96 | ||||||
Gain (loss) on foreign exchange transactions |
(150 | ) | (107 | ) | ||||
Other income (expense), net |
25 | (14 | ) | |||||
|
|
|
|
|||||
Total other income (expense), net |
(116 | ) | (25 | ) | ||||
Loss before income taxes |
(30,241 | ) | (35,630 | ) | ||||
Income tax benefit |
1,188 | 8,398 | ||||||
|
|
|
|
|||||
Net loss and comprehensive loss |
$ |
(29,053 |
) |
$ |
(27,232 |
) | ||
|
|
|
|
|||||
Loss per common share: |
||||||||
Basic and diluted |
(291 | ) | (272 | ) | ||||
Weighted average shares: |
||||||||
Basic and diluted |
100 | 100 |
Six Months Ended July 31, 2020 |
||||||||||||||||||||
Common Shares $ 0.01 par |
Additional Paid-in Capital |
Accumulated Deficit |
Total |
|||||||||||||||||
Shares |
Amount |
|||||||||||||||||||
Balance – January 31, 2020 |
100 | $ | — | $ | 576,678 | $ | (81,184 | ) | $ | 495,494 | ||||||||||
Capital contributions from ServiceMax, JV, LP |
— | — | 84,716 | — | 84,716 | |||||||||||||||
Stock-based compensation |
— | — | 769 | — | 769 | |||||||||||||||
Net loss |
— | — | — | (27,232 | ) | (27,232 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance – July 31, 2020 |
100 | $ | — | $ | 662,163 | $ | (108,416 | ) | $ | 553,747 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31, 2021 |
||||||||||||||||||||
Common Shares $ 0.01 par |
Additional Paid-in Capital |
Accumulated Deficit |
Total |
|||||||||||||||||
Shares |
Amount |
|||||||||||||||||||
Balance – January 31, 2021 |
100 | $ | — | $ | 662,723 | $ | (131,020 | ) | $ | 531,703 | ||||||||||
Stock-based compensation |
— | — | 817 | — | 817 | |||||||||||||||
Net loss |
— | — | — | (29,053 | ) | (29,053 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance – July 31, 2021 |
100 | $ | — | $ | 663,540 | $ | (160,073 | ) | $ | 503,467 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31, |
||||||||
2021 |
2020 |
|||||||
(Unaudited) |
||||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (29,053 | ) | $ | (27,232 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
257 | 262 | ||||||
Amortization of intangible assets |
18,878 | 18,878 | ||||||
Amortization of internally developed software |
277 | — | ||||||
Amortization of deferred sales commissions |
1,099 | 568 | ||||||
Stock-based compensation expense |
1,055 | 721 | ||||||
Bad debt expense/(recovery) |
(56 | ) | 389 | |||||
Noncash lease expense |
1,350 | 1,606 | ||||||
Deferred income tax benefit |
(1,613 | ) | (8,949 | ) | ||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
8,180 | 3,003 | ||||||
Accounts receivable – related party |
2,194 | 2,199 | ||||||
Prepaid expenses |
70 | (457 | ) | |||||
Other current assets |
359 | 180 | ||||||
Deferred sales commissions |
(2,421 | ) | (1,477 | ) | ||||
Deposits and other assets |
424 | 16 | ||||||
Accounts payable |
(870 | ) | (4,451 | ) | ||||
Accounts payable – related party |
806 | (900 | ) | |||||
Accrued expense |
256 | 1,609 | ||||||
Unearned revenue |
(1,348 | ) | 2,796 | |||||
Operating lease liabilities |
(1,357 | ) | (1,598 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
(1,513 |
) |
(12,837 |
) | ||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
(23 | ) | (105 | ) | ||||
Capitalization of internally developed software |
(70 | ) | (1,009 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(93 |
) |
(1,114 |
) | ||||
Cash flows from financing activities |
||||||||
Capital contributions from ServiceMax, JV, LP |
— | 84,716 | ||||||
Payments related to public offerings |
(2,309 | ) | — | |||||
|
|
|
|
|||||
Net cash flows provided by (used in) financing activities |
(2,309 |
) |
84,716 |
|||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
(3,915 |
) |
70,765 |
|||||
Cash and cash equivalents, beginning of period |
81,169 | 16,819 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ |
77,254 |
$ |
87,584 |
||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Income taxes paid |
845 | 25 | ||||||
Operating lease right of use assets and lease liability recorded for new lease |
2,303 | — | ||||||
Deferred public offering costs incurred and included in accounts payable |
2,820 | — |
For the Six Months Ended, July 31, |
||||||||
2021 |
2020 |
|||||||
Revenues: |
||||||||
Subscription |
$ | 53,237 | $ | 43,720 | ||||
Professional services |
8,958 | 9,398 | ||||||
|
|
|
|
|||||
Total |
$ |
62,195 |
$ |
53,118 |
||||
|
|
|
|
|||||
Percentage of revenues: |
||||||||
Subscription |
85.60 | % | 82.31 | % | ||||
Professional services |
14.40 | % | 17.69 | % | ||||
|
|
|
|
|||||
Total |
100.00 |
% |
100.00 |
% | ||||
|
|
|
|
As of |
||||||||
July 31, 2021 |
January 31, 2021 |
|||||||
Unbilled receivables |
$ | 29,183 | $ | 39,364 | ||||
Contract assets |
76 | 213 | ||||||
|
|
|
|
|||||
Total contract assets |
$ |
29,259 |
39,577 |
|||||
|
|
|
|
|||||
Unearned revenue - current |
68,476 | 66,971 | ||||||
Unearned revenue - noncurrent |
2,077 | 4,930 | ||||||
|
|
|
|
|||||
Total contract liabilities |
$ |
70,553 |
$ |
71,901 |
||||
|
|
|
|
As of |
||||||||
July 31, 2021 |
January 31, 2021 |
|||||||
Unearned revenue - beginning of period |
$ | 71,901 | $ | 58,178 | ||||
Billings and contributions from contract assets |
60,557 | 122,643 | ||||||
Revenue recognized |
(61,905 | ) | (108,920 | ) | ||||
|
|
|
|
|||||
Unearned revenue - end of period |
$ |
70,553 |
$ |
71,901 |
||||
|
|
|
|
As of |
||||||||
July 31, 2021 |
January 31, 2021 |
|||||||
Internally developed software - capitalized |
$ | 2,889 | $ | 2,819 | ||||
Accumulated depreciation and amortization |
(360 | ) | (80 | ) | ||||
|
|
|
|
|||||
Total internally developed software, net |
$ |
2,529 |
$ |
2,739 |
||||
|
|
|
|
Gross Amount |
Accumulated Amortization |
Net Carrying Value |
||||||||||
Intangible assets, net: |
||||||||||||
Trademark and trade name |
$ | 2,600 | $ | (2,166 | ) | $ | 434 | |||||
Developed technology |
103,700 | (51,770 | ) | 51,930 | ||||||||
Order backlog |
25,000 | (20,832 | ) | 4,168 | ||||||||
Customer relationships |
62,400 | (19,538 | ) | 42,862 | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
193,700 |
$ |
(94,306 |
) |
$ |
99,394 |
|||||
|
|
|
|
|
|
Gross Amount |
Accumulated Amortization |
Net Carrying Value |
||||||||||
Intangible assets, net: |
||||||||||||
Trademark and trade name |
$ | 2,600 | $ | (1,733 | ) | $ | 867 | |||||
Developed technology |
103,700 | (41,400 | ) | 62,300 | ||||||||
Order backlog |
25,000 | (16,666 | ) | 8,334 | ||||||||
Customer relationships |
62,400 | (15,629 | ) | 46,771 | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
193,700 |
$ |
(75,428 |
) |
$ |
118,272 |
|||||
|
|
|
|
|
|
July 31, 2021 |
January 31, 2021 | |||
Time to liquidity event (years) |
1.0 - 1.8 |
1.0 - 2.3 | ||
Equity volatility |
40% - 50% |
40% - 50% | ||
Risk-free interest rate |
0.10% - 1.32% |
0.10% - 1.32% | ||
Discount |
30% | 30% |
Class B Units Outstanding |
Weighted Average Exercise Price |
Aggregate Intrinsic Value |
Weighted Average Contractual Terms (Years) |
|||||||||||||
Outstanding, January 31, 2021 |
5,286 |
$ |
12.23 |
$ |
44,859 |
2.49 |
||||||||||
Granted |
426 | 20.72 | — | — | ||||||||||||
Canceled |
(430 | ) | 12.48 | — | — | |||||||||||
|
|
|||||||||||||||
Outstanding, July 31, 2021 |
5,282 |
$ |
12.90 |
$ |
62,709 |
2.19 |
||||||||||
|
|
|||||||||||||||
Exercisable, July 31, 2021 |
1,087 |
$ |
11.76 |
$ |
9,739 |
|||||||||||
|
|
For the Six Months Ended, July 31, |
||||||||
2021 |
2020 |
|||||||
Cost of revenue |
$ | 176 | $ | 70 | ||||
Sales and marketing |
219 | 133 | ||||||
General and administrative |
434 | 433 | ||||||
Research and development |
226 | 85 | ||||||
|
|
|
|
|||||
Total stock-based compensation expense |
$ |
1,055 |
$ |
721 |
||||
|
|
|
|
TSA For the Six Months Ended |
GESA For the Six Months Ended |
|||||||||||||||
July 31, 2021 |
July 31, 2020 |
July 31, 2021 |
July 31, 2020 |
|||||||||||||
Paid |
$ | — | $ | 1,203 | $ | — | $ | 1,744 |
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
Money Markets Fund |
$ | 288 | $ | 288 | $ | — | $ | — | ||||||||
Governmental Fund |
63,171 | — | 63,171 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
63,459 |
$ |
288 |
$ |
63,171 |
$ |
— |
||||||||
|
|
|
|
|
|
|
|
Carrying Amount |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
Money Market Fund |
$ | 288 | $ | 288 | $ | — | $ | — | ||||||||
Governmental Fund |
70,126 | — | 70,126 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
70,414 |
$ |
288 |
$ |
70,126 |
$ |
— |
||||||||
|
|
|
|
|
|
|
|
For the Six Months Ended July 31, |
||||||||
2021 |
2020 |
|||||||
Numerator: |
||||||||
Net loss available to common stockholders |
$ | (29,053 | ) | $ | (27,232 | ) | ||
Denominator: |
||||||||
Weighted average common shares outstanding — basic and diluted |
100 | 100 | ||||||
|
|
|
|
|||||
Net loss per share attributable to common stockholders - basic and diluted loss per share |
$ |
(291 |
) |
$ |
(272 |
) | ||
|
|
|
|
For the Six Months Ended, July 31, |
||||||||
2021 |
2020 |
|||||||
Americas |
$ | 31,419 | $ | 27,942 | ||||
Europe, Middle East, and Africa |
25,046 | 21,297 | ||||||
Asia Pacific |
5,730 | 3,879 | ||||||
|
|
|
|
|||||
Total revenues |
$ |
62,195 |
$ |
53,118 |
||||
|
|
|
|
As of |
||||||||
July 31, 2021 |
January 31, 2021 |
|||||||
North America |
$ | 47 | $ | 163 | ||||
Europe, Middle East, and Africa |
26 | 60 | ||||||
Asia Pacific |
363 | 446 | ||||||
|
|
|
|
|||||
Total property and equipment, net |
$ |
436 |
$ |
669 |
||||
|
|
|
|
ANNEXES AND EXHIBITS | ||
Annex A | Definitions | |
Exhibit A | Form of Amended and Restated Sponsor Letter Agreement | |
Exhibit B | Form of Amended and Restated Company Transaction Support Agreement | |
Exhibit C | Form of Amended and Restated Company Shareholder Transaction Support Agreement | |
Exhibit D | Form of Amended and Restated Strategic Investor Subscription Agreements | |
Exhibit E | Form of Pathfinder Post-Closing Certificate of Incorporation | |
Exhibit F | Form of Pathfinder Post-Closing Bylaws | |
Exhibit G | Form of Pathfinder 2021 Omnibus Incentive Plan | |
Exhibit H | Form of Pathfinder Executive Officer Severance Plan | |
Exhibit I | Form of Employee Stock Purchase Plan |
Attention: |
||
E-mail: |
Attention: |
| |
Email: |
||
Attention: |
| |
Email: |
Attention: |
| |
Email: |
PATHFINDER ACQUISITION CORPORATION | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
SERVE MERGER SUB, INC. | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
SERVICEMAX, INC. | ||
By: | /s/ Ellen O’Donnell | |
Name: | Ellen O’Donnell | |
Title: | Chief Legal Officer |
SERVICEMAX, INC. | ||
By: | ||
Name: |
||
Title: |
Page |
||||
C-1 | ||||
C-1 | ||||
C-1 | ||||
C-4 | ||||
C-4 | ||||
C-4 | ||||
C-5 | ||||
C-5 | ||||
C-5 | ||||
C-6 | ||||
C-6 | ||||
C-6 | ||||
C-6 | ||||
C-7 | ||||
C-7 | ||||
C-7 | ||||
C-7 | ||||
C-7 | ||||
C-7 | ||||
C-8 | ||||
C-8 | ||||
C-8 | ||||
C-8 | ||||
C-8 | ||||
C-9 | ||||
C-9 | ||||
C-9 | ||||
C-9 | ||||
C-9 | ||||
C-9 | ||||
C-10 | ||||
C-10 | ||||
C-10 | ||||
C-10 | ||||
C-10 | ||||
C-10 | ||||
C-10 | ||||
C-11 | ||||
C-11 |
Page |
||||
C-11 | ||||
C-11 | ||||
C-11 | ||||
C-12 | ||||
C-12 | ||||
C-12 | ||||
C-12 | ||||
C-12 | ||||
C-12 | ||||
C-12 |
1. |
DEFINED TERMS |
2. |
PURPOSE |
3. |
ADMINISTRATION |
4. |
LIMITS ON AWARDS UNDER THE PLAN |
5. |
ELIGIBILITY AND PARTICIPATION |
6. |
RULES APPLICABLE TO ALL AWARDS |
7. |
ADDITIONAL RULES APPLICABLE TO STOCK OPTIONS AND SARS |
8. |
EFFECT OF CERTAIN TRANSACTIONS |
9. |
LEGAL CONDITIONS ON DELIVERY OF STOCK |
10. |
AMENDMENT AND TERMINATION |
11. |
OTHER COMPENSATION ARRANGEMENTS |
12. |
MISCELLANEOUS |
13. |
RULES FOR PARTICIPANTS IN CERTAIN JURISDICTIONS |
14. |
GOVERNING LAW |
Name of Investor: | State/Country of Formation or Domicile: | |||||||
By: |
||||||||
Name: |
||||||||
Title: |
||||||||
Name in which Shares are to be registered (if different): | Date: | |||||||
Investor’s EIN: | ||||||||
Business Address-Street: | Mailing Address-Street (if different): | |||||||
City, State, Zip: | City, State, Zip: | |||||||
Attn: |
Attn: | |||||||
Telephone No.: | Telephone No.: | |||||||
Facsimile No.: | Facsimile No.: | |||||||
Number of Shares subscribed for: | ||||||||
Aggregate Subscription Amount: $ | Price Per Share: $10.00 |
PATHFINDER ACQUISITION CORPORATION | ||
By: | ||
Name: |
||
Title: |
SERVICEMAX INC. | ||
By: | ||
Name: |
||
Title: |
A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
☐ | Investor is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “ QIB ”)). |
☐ | Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such accounts is a QIB. |
B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS |
☐ | Investor is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, a corporation, Massachusetts or similar business trust, partnership, or limited liability company that was not formed for the specific purpose of acquiring the securities of PFDR being offered in this offering, with total assets in excess of $5,000,000. |
☐ | Investor is a “private business development company” as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. |
☐ | Investor is a “bank” as defined in Section 3(a)(2) of the Securities Act. |
☐ | Investor is a “savings and loan association” or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. |
☐ | Investor is a broker or dealer registered pursuant to Section 15 of the Exchange Act. |
☐ | Investor is an investment adviser registered pursuant to Section 203 of the Investment Advisers Act of 1940 or registered pursuant to the laws of a state. |
☐ | Investor is an investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of the Investment Advisers Act of 1940. |
☐ | Investor is an “insurance company” as defined in Section 2(a)(13) of the Securities Act. |
☐ | Investor is an investment company registered under the Investment Company Act of 1940. |
☐ | Investor is a “business development company” as defined in Section 2(a)(48) of the Investment Company Act of 1940. |
☐ | Investor is a “Small Business Investment Company” licensed by the U.S. Small Business Administration under either Section 301(c) or (d) of the Small Business Investment Act of 1958. |
☐ | Investor is a “Rural Business Investment Company” as defined in Section 384A of the Consolidated Farm and Rural Development Act. |
☐ | Investor is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5,000,000. |
☐ | Investor is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is one of the following. |
☐ | A bank; |
☐ | A savings and loan association; |
☐ | A insurance company; or |
☐ | A registered investment adviser. |
☐ | Investor is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 with total assets in excess of $5,000,000. |
☐ | Investor is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 that is a self-directed plan with investment decisions made solely by persons that are accredited investors. |
☐ | Investor is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered by PFDR in this offering, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the Securities Act. |
☐ | An entity in which all of the equity owners are accredited investors. |
☐ | An entity, of a type not listed in Rule 501(a)(1), (2), (3), (7), or (8), not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000 |
☐ | A “family office,” as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940: (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment;. |
☐ | A “family client,” as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, of a family office (as defined immediately above) and whose prospective investment in the issuer is directed by such family office pursuant to paragraph (iii) of such definition. |
C. | AFFILIATE STATUS |
☐ | is: |
☐ | is not: |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
PATHFINDER ACQUISITION CORPORATION | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
PATHFINDER ACQUISITION LLC | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
SERVICEMAX JV GP, LLC | ||
By: | SLP Snowflake Aggregator, L.P. | |
By: | SLP V Aggregator GP, L.L.C. | |
By: | Silver Lake Technology Associates V, L.P. | |
By: | SLTA V (GP), L.L.C. | |
By: | Silver Lake Group, L.L.C. | |
By: | /s/ Ken Hao | |
Name: | Ken Hao | |
Title: | Managing Director |
SERVICEMAX JV, LP | ||
By: | ServiceMax JV GP, LLC | |
By: | SLP Snowflake Aggregator, L.P. | |
By: | SLP V Aggregator GP, L.L.C. | |
By: | Silver Lake Technology Associates V, L.P. | |
By: | SLTA V (GP), L.L.C. | |
By: | Silver Lake Group, L.L.C. | |
By: | /s/ Ken Hao | |
Name: | Ken Hao | |
Title: | Managing Director |
SERVICEMAX, INC. | ||
By: | /s/ Ellen O’Donnell | |
Name: | Ellen O’Donnell | |
Title: | Chief Legal, Chief HR Officer |
Class/Series Securities |
Number of Shares |
|||
Common Stock |
100 |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
Attention: |
Email: |
PATHFINDER ACQUISITION CORPORATION | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
PATHFINDER ACQUISITION LLC | ||
By: | /s/ David Chung | |
Name: | David Chung | |
Title: | Chief Executive Officer |
SERVICEMAX, INC. | ||
By: | /s/ Ellen O’Donnell | |
Name: | Ellen O’Donnell | |
Title: | Chief Legal Officer |
SLP SNOWFLAKE AGGREGATOR, L.P. | ||
By: | SLP V Aggregator GP, L.L.C. | |
By: | Silver Lake Technology Associates V, L.P. | |
By: | SLTA V (GP), L.L.C. | |
By: | Silver Lake Group, L.L.C. |
By: | /s/ Ken Hao | |
Name: | Ken Hao | |
Title: | Managing Director |
Class/Series of Securities |
Number of Securities |
|||
Class A Units of ServiceMax JV, LP |
46,785,714 |
SERVICEMAX, INC. |
By: | /s/ Ellen O’Donnell |
Name: | Ellen O’Donnell | |
Title: | Chief Legal Officer |
PATHFINDER ACQUISITION CORPORATION |
By: | /s/ David Chung |
Name: | David Chung | |
Title: | Chief Executive Officer |
PATHFINDER ACQUISITION LLC |
By: | /s/ David Chung |
Name: | David Chung | |
Title: | Chief Executive Officer |
INSIDERS |
By: | /s/ Richard Lawson |
Name: | Richard Lawson |
Address: | ||
Email: | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ David Chung |
Name: | David Chung |
Address: | | |
|
Email: | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Lindsay Sharma |
Name: | Lindsay Sharma |
Address: | ||
|
Email: |
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Jon Steven Young |
Name: | Jon Steven Young | |
Address: | | |
|
Email: | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Hans Swildens |
Name: Hans Swildens | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Steve Walske |
Name: | Steve Walske |
Address: | | |
|
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Lance Taylor |
Name: Lance Taylor | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Omar Johnson |
Name: Omar Johnson | ||
Spouse (if any): |
By: | |
Name: |
INSIDERS |
By: | /s/ Paul Weiskopf |
Name: Paul Weiskopf | ||
Spouse (if any): |
By: | |
Name: |
Pathfinder Person |
Number of Pathfinder Class B Shares Held |
Number of Pathfinder Class A Shares Held |
||||||
Pathfinder Acquisition LLC |
8,050,000 | 0 | ||||||
Steve Walske |
25,000 | 0 | ||||||
Omar Johnson |
25,000 | 0 | ||||||
Paul Weiskopf |
25,000 | 0 |
Pathfinder Person |
Number of Pathfinder Warrants Held |
|||
Pathfinder Acquisition LLC |
4,250,000 |
c/o Pathfinder Acquisition LLC 1950 University Avenue, Suite 350 Palo Alto, CA 94303 | ||
Attention: |
||
E-mail: |
Kirkland & Ellis LLP 55 California Street, 27th Floor San Francisco, CA 94104 | ||
Attention: |
||
Email: |
c/o ServiceMax, Inc. 4450 Rosewood Drive Pleasanton, CA, 94588 | ||
Attention: |
||
Email: |
Ropes & Gray LLP Three Embarcadero Center San Francisco, CA 94111 | ||
Attention: |
||
E-mail: |
Company: |
PATHFINDER ACQUISITION CORPORATION | |||
By: | | |||
Name: | ||||
Title: |
ServiceMax: |
SERVICEMAX, INC. | |||||||
By: | /s/ Ellen O’Donnell | |||||||
Name: Ellen O’Donnell Title: Chief Legal Officer | ||||||||
SERVICEMAX JV, LP | ||||||||
By: | ServiceMax JV GP, LLC | |||||||
By: | SLP Snowflake Aggregator, L.P. | |||||||
By: | SLP V Aggregator GP, L.L.C. | |||||||
By: | Silver Lake Technology Associates V, L.P. | |||||||
By: | SLTA V (GP), L.L.C. | |||||||
By: | Silver Lake Group, L.L.C. | |||||||
By: | /s/ Ken Hao | |||||||
Name: |
Ken Hao | |||||||
Title: |
Managing Director | |||||||
SLP SNOWFLAKE AGGREGATOR, LP | ||||||||
By: | SLP V Aggregator GP, L.L.C. | |||||||
By: | Silver Lake Technology Associates V, L.P. | |||||||
By: | SLTA V (GP), L.L.C. | |||||||
By: | Silver Lake Group, L.L.C. | |||||||
By: | /s/ Ken Hao | |||||||
Name: |
Ken Hao | |||||||
Title: |
Managing Director |
Investors: |
PATHFINDER ACQUISITION LLC | |||
By: |
/s/ David Chung | |||
Name: David Chung | ||||
Title: Chief Executive Officer | ||||
GENERAL ELECTRIC COMPANY | ||||
By: |
/s/ Anselm Wong | |||
Name: Anselm Wong | ||||
Title: Authorized Signatory | ||||
Salesforce Ventures LLC | ||||
By: |
/s/ John Somorjai | |||
Name: John Somorjai | ||||
Title: President |
Ropes & Gray LLP Three Embarcadero Center San Francisco, CA 94111 | ||
Attention: |
||
Email: |
General Electric Company, 41 Farnsworth Street, Boston, MA 02210 | ||
Attention: |
||
Email: |
Salesforce Tower 415 Mission St., FL 3 | ||
San Francisco, CA 94105 | ||
Attention: |
||
Email: |
Covington & Burling LLP Salesforce Tower, 415 Mission Street, Suite 5400 San Francisco, CA 94105 | ||
Attention: |
||
Email: |
c/o Pathfinder Acquisition LLC 1950 University Avenue, Suite 350 Palo Alto, CA 94303 | ||
Attention: |
||
E-mail: |
Kirkland & Ellis LLP 55 California Street, 27th Floor San Francisco, CA 94104 | ||
Attention: |
|
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned, revoking any previous proxies relating to the ordinary shares of Pathfinder Acquisition Corporation (the “Company”), hereby acknowledges receipt of the Notice of Extraordinary General Meeting of the Company and accompanying Proxy Statement, dated [ ], 2021, and hereby appoints [ ] (the “Proxies”), and each of them independently, with full power of substitution, the attorneys-in-fact and proxies of the undersigned, as proxies of the undersigned to vote all of the ordinary shares of the Company (the “Company”) that the undersigned is entitled to vote (the “Shares”) at the extraordinary general meeting of shareholders of the Company to be held on [ ] at [ ] a.m., virtually at [ ], and any adjournment or postponement thereof with all the powers the undersigned would have if personally present. The undersigned acknowledges receipt of the enclosed proxy statement and revokes all prior proxies for said meeting. THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO SPECIFIC DIRECTION IS GIVEN AS TO THE PROPOSALS ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED “FOR” ALL PROPOSALS. PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY. | |
(Continued and to be marked, dated and signed on reverse side) |
Important Notice Regarding the Availability of Proxy Materials for the Extraordinary General Meeting of Pathfinder Acquisition Corporation to be held on [ ]. |
This notice of Extraordinary General Meeting of Shareholders and accompanying Proxy Statement are available at: [ ] |
PATHFINDER ACQUISITION CORPORATION — THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL PROPOSALS. |
Please mark vote as indicated in this example |
Proposal No. 1—The Business Combination Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 2 — The Domestication Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 3 — The Charter Amendment Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Advisory Governing Documents Proposals — Existing Governing Documents ”) and the proposed new certificate of incorporation, a copy of which is attached to the proxy statement/prospectus as Annex B (the “Proposed Certificate of Incorporation ”) and the proposed new bylaws, a copy of which is attached to the proxy statement/prospectus as Annex C (the “Proposed Bylaws ”) of “ServiceMax, Inc.” upon the Domestication (such proposals, collectively, the “Advisory Governing Documents Proposals ”). |
||||||
Proposal No. 4 — Advisory Governing Documents Proposal A — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 5 — Advisory Governing Documents Proposal B — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 6 — Advisory Governing Documents Proposal C — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 7 — Advisory Governing Documents Proposal D — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 8 — Advisory Governing Documents Proposal E — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ |
Proposal No. 9 — Advisory Governing Documents Proposal F — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 10 — The NASDAQ Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 11 — The Incentive Equity Plan Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 12 — The ESPP Proposal — RESOLVED |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ | |||
Proposal No. 13 — The Adjournment Proposal — RESOLVED resolution, that the adjournment of the extraordinary general meeting to a later date or dates (i) to solicit additional proxies for the purpose of obtaining approval by the Pathfinder Shareholders for each of the proposals necessary to consummate transactions contemplated by the Business Combination Agreement (ii) for the absence of a quorum, (iii) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosures that Pathfinder has determined, based on the advice of outside legal counsel, are reasonably likely to be required under applicable law and for such supplemental or amended disclosures to be disseminated and reviewed by the Class A ordinary shareholders prior to the extraordinary general meeting or (iv) if the holders of the Class A ordinary shares have elected to redeem a number of Class A ordinary shares as of such time that would reasonably be expected to result in the conditions required for the Closing of the Business Combination Agreement not to be satisfied; provided that, without the consent of ServiceMax, in no event shall the extraordinary general meeting of shareholders be adjourned on more than three occasions, to a date that is more than fifteen (15) business days later than the most recently adjourned meeting or to a date that is beyond the termination date of the Business Combination Agreement, at the extraordinary general meeting be approved. |
FOR ☐ |
AGAINST ☐ |
ABSTAIN ☐ |
Dated: |
, 2021 | |||
| ||||
Signature |
||||
| ||||
(Signature if held Jointly) |
||||
When Shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by the president or another authorized officer. If a partnership, please sign in partnership name by an authorized person. | ||||
The Shares represented by the proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). If no direction is made, this proxy will be voted FOR all Proposals. If any other matters properly come before the meeting, unless such authority is withheld on this proxy card, the Proxies will vote on such matters in their discretion. |
Item 20. |
Indemnification of directors and officers |
Item 21. |
Exhibits and Financial Statements Schedules |
* | Previously filed. |
** | Confidential treatment requested for the copy of the exhibit electronically filed with the SEC. |
(1) | Previously filed as an exhibit to Pathfinder Acquisition Corporation’s Current Report on Form 8-K filed on February 22, 2021. |
(2) | Previously filed as an exhibit to Pathfinder Acquisition Corporation’s Registration Statement on Form S-1, as amended (File No. 333-252498). |
(3) | Previously filed as an exhibit to Pathfinder Acquisition Corporation’s Current Report on Form 8-K filed on July 19, 2021 |
† | Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
+ | Certain confidential portions of this Exhibit were omitted pursuant to Item 601(b)(10) of Regulation S-K by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) are the type that the Registrant treats as private or confidential. |
Item 22. |
Undertakings |
(a) | To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. |
(b) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
PATHFINDER ACQUISITION CORPORATION | ||
By: | /s/ David Chung | |
Name: David Chung | ||
Title: Chief Executive Officer |
NAME |
POSITION |
DATE | ||
* |
Chairman | September 16, 2021 | ||
Richard Lawson | ||||
/s/ David Chung David Chung |
Chief Executive Officer and Director | September 16, 2021 | ||
( Principal Executive Officer |
||||
/s/ Lance Taylor |
Chief Financial Officer | September 16, 2021 | ||
Lance Taylor | (Principal Financial and Accounting Officer) |
|||
* |
Director | September 16, 2021 | ||
Lindsay Sharma | ||||
* |
Director | September 16, 2021 | ||
Hans Swildens | ||||
* |
Director | September 16, 2021 | ||
J. Steven Young | ||||
* |
Director | September 16, 2021 | ||
Omar Johnson | ||||
* |
Director | September 16, 2021 | ||
Paul Weiskopf | ||||
* |
Director | September 16, 2021 | ||
Steven Walske |
*By: |
/s/ David Chung | |
David Chung | ||
Attorney-in-Fact |
Exhibit 5.1
609 Main Street | ||||
Houston, TX 77002 | ||||
United States | ||||
Facsimile: | ||||
+1 713 836 3601 | ||||
+1 713 836 3600 | ||||
www.kirkland.com | ||||
September 16, 2021 |
Pathfinder Acquisition Corporation
1950 University Avenue, Suite 350
Palo Alto, CA 94303
Ladies and Gentlemen:
We have acted as special legal counsel to Pathfinder Acquisition Corporation, a Cayman Islands exempted company (the Company), in connection with the Registration Statement on Form S-4, initially filed with the U.S. Securities and Exchange Commission (the Commission) on August 12, 2021 (File No. 333-258769), as amended and supplemented through the date hereof pursuant to the Securities Act of 1933, as amended (the Act) (such Registration Statement, as amended or supplemented, is hereafter referred to as the Registration Statement), relating to the Business Combination Agreement, dated July 15, 2021, as amended and restated on August 11, 2021 (as it may be amended, supplemented or otherwise modified from time to time, the Business Combination Agreement), by and among the Company, Serve Merger Sub, Inc., a Delaware corporation (Merger Sub), and ServiceMax, Inc., a Delaware corporation (ServiceMax). Pursuant to the Business Combination Agreement, the Company will change its jurisdiction of incorporation through the transfer by way of continuation and deregistration of the Company from the Cayman Islands and the continuation and domestication of the Company as a corporation incorporated in the State of Delaware (the Domestication).
In connection with the Domestication, the Company will change its jurisdiction of incorporation by effecting a deregistration under Part XII of the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the General Corporation Law of the State of Delaware (the DGCL) by filing a certificate of corporate domestication simultaneously with a certificate of incorporation, in each case in respect of the Company with the Secretary of State of the State of Delaware (the Delaware Secretary of State). The Domestication is subject to the approval of the shareholders of the Company. We refer herein to the Company following effectiveness of the Domestication as New SM.
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Pathfinder Acquisition Corporation
September 16, 2021
Page 2
Promptly following the consummation of the Domestication, Merger Sub will merge with and into ServiceMax (the Merger and together with the Domestication and related transactions, the Business Combination), with ServiceMax as the surviving company in the Merger and, after giving effect to the Merger, ServiceMax will be a wholly-owned subsidiary of the Company (the time that the Merger becomes effective being referred to as the Effective Time). In connection with the Domestication, on the date of closing prior to the Effective Time, (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share, of the Company (the Class A ordinary shares) will convert automatically by operation of law, on a one-for-one basis, into shares of Class A common stock, par value $0.00001 per share, of New SM (the Class A Common Stock); (ii) each issued and outstanding Class B ordinary share, par value $0.0001 per share, of the Company (the Class B ordinary shares) will convert automatically by operation of law, on a one-for-one basis without giving effect to any rights of adjustment or other anti-dilution protections, into shares of Class A Common Stock; and (iii) each issued and outstanding whole warrant to purchase Class A ordinary shares of the Company (the Warrants), issued pursuant to that certain Warrant Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated February 16, 2021 (the Warrant Agreement), will automatically represent the right to purchase one share of Class A Common Stock.
This opinion is being rendered in connection with the registration under the above-referenced Registration Statement of (i) 40,625,000 shares of Class A Common Stock, representing (a) 32,500,000 shares of Class A Common Stock issuable upon the conversion of Class A ordinary shares and (b) 8,125,000 shares of Class A Common Stock issuable upon the conversion of Class B ordinary shares; (ii) 10,750,000 shares of Class A Common Stock to be issued upon the exercise of the Warrants (the Warrant Shares); and (iii) 10,750,000 Warrants.
In connection with the preparation of this opinion, we have, among other things, read:
(a) | a copy of the Business Combination Agreement, filed as Exhibit 2.1 to the Registration Statement; |
(b) | the Registration Statement; |
(c) | the form of proposed certificate of incorporation of New SM, to be filed with the Delaware Secretary of State (the Certificate of Incorporation), in the form filed as Exhibit 3.1 to the Registration Statement; |
(d) | the form of proposed bylaws of New SM, to be adopted by New SM in connection with the Domestication (the Bylaws), in the form filed as Exhibit 3.2 to the Registration Statement; |
(e) | the form of proposed certificate of corporate domestication of the Company, to be filed with the Delaware Secretary of State (the Certificate of Domestication); |
Pathfinder Acquisition Corporation
September 16, 2021
Page 3
(f) | a copy of the Warrant Agreement, including the specimen certificate included therein; and |
(g) | such other documents, records and other instruments as we have deemed necessary or appropriate in order to deliver the opinions set forth herein. |
For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto and the due authorization, execution and delivery of all documents by the parties thereto. We have not independently established or verified any facts relevant to the opinion expressed herein, but have relied upon statements and representations of officers and other representatives of the Company and others as to factual matters.
Subject to the assumptions, qualifications, exclusions and other limitations which are identified in this opinion, we advise you that:
1. | Upon (i) the effectiveness of the Domestication and (ii) the filing of the Certificate of Incorporation with the Delaware Secretary of State, the Class A ordinary shares and Class B ordinary shares will automatically convert by operation of law, on a one-for-one basis, into duly authorized, validly issued, fully paid and non-assessable shares of Class A Common Stock. |
2. | Upon (i) the effectiveness of the Domestication, (ii) the filing of the Certificate of Incorporation with the Delaware Secretary of State and (iii) the exercise by the holders of Warrants and the payment of the exercise price for the Warrant Shares pursuant to the Warrant Agreement, the Warrant Shares will be duly authorized, validly issued, fully paid and non-assessable. |
3. | Upon (i) the effectiveness of the Domestication and (ii) the filing of the Certificate of Incorporation with the Delaware Secretary of State, each issued and outstanding Warrant will be a valid and binding obligation of New SM, enforceable against New SM in accordance with its terms under the laws of the State of New York. |
Pathfinder Acquisition Corporation
September 16, 2021
Page 4
In addition, in rendering the foregoing opinions we have assumed that:
(a) | the Company (i) is duly incorporated and is validly existing and in good standing, (ii) has requisite legal status and legal capacity under the laws of the jurisdiction of its organization, and (iii) has complied and will comply with all aspects of the laws of the jurisdiction of its organization in connection with the transactions contemplated by, and the performance of its obligations under, the Warrant Agreement; |
(b) | the Company had the corporate power and authority to execute and deliver and has the corporate power and authority to perform all its obligations under the Warrant Agreement; |
(c) | neither the execution and delivery by the Company of the Warrant Agreement nor the performance by the Company of its obligations thereunder: (i) constitutes or will constitute a violation of, or a default under, any lease, indenture, instrument or other agreement to which the Company or its property is subject; (ii) contravenes or will contravene any order or decree of any governmental authority to which the Company or its property is subject; or (iii) violates or will violate any law, rule or regulation to which the Company or its property is subject (except that we do not make the assumption set forth in this clause (iii) with respect to the laws of the State of New York or the DGCL); |
(d) | neither the execution and delivery by the Company of the Warrant Agreement nor the performance by the Company of its obligations thereunder requires or will require the consent, approval, licensing or authorization of, or any filing, recording or registration with, any governmental authority under any law, rule or regulation of any jurisdiction; |
(e) | prior to effecting the Domestication and prior to the issuance of securities by New SM: (i) the shareholders of the Company will have approved, among other things, the Domestication; and (ii) all other necessary action will have been taken under the applicable laws of the Cayman Islands to authorize and permit the Domestication, and any and all consents, approvals and authorizations from applicable Cayman Islands governmental and regulatory authorities required to authorize and permit the Domestication will have been obtained; and |
(f) | the current draft of the Certificate of Incorporation, in the form thereof submitted for our review, without alteration or amendment (other than identifying the appropriate date), will be duly authorized and executed and thereafter be duly filed with the Delaware Secretary of State in accordance with Section 103 of the DGCL, that no other certificate or document, other than the Certificate of Domestication as required under Section 388 of the DGCL, has been, or prior to the filing of the Certificate of Incorporation will be, filed by or in respect of the Company with the Delaware Secretary of State and that the Company will pay all fees and other charges required to be paid in connection with the filing of the Certificate of Incorporation. |
Pathfinder Acquisition Corporation
September 16, 2021
Page 5
Our opinions expressed above are subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of (i) any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other similar law or judicially developed doctrine in this area (such as substantive consolidation or equitable subordination) affecting the enforcement of creditors rights generally, (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), (iii) an implied covenant of good faith and fair dealing, (iv) public policy considerations which may limit the rights of parties to obtain certain remedies, (v) any requirement that a claim with respect to any security denominated in other than U.S. dollars (or a judgment denominated in other than U.S. dollars in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined in accordance with applicable law, (vi) governmental authority to limit, delay or prohibit the making of payments outside of the United States or in a foreign currency or currency unit and (vii) any laws except the laws of the State of New York and the DGCL. We advise you that issues addressed by this letter may be governed in whole or in part by other laws, but we express no opinion as to whether any relevant difference exists between the laws upon which our opinions are based and any other laws which may actually govern. We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or Blue Sky laws of the various states to the issuance of the securities covered by this opinion.
This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. We assume no obligation to revise or supplement this opinion should the present laws of the State of New York or the DGCL be changed by legislative action, judicial decision or otherwise.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the heading Legal Matters in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
Very truly yours, |
/s/ Kirkland & Ellis LLP |
Kirkland & Ellis LLP |
Exhibit 8.1
300 North LaSalle Chicago, IL 60654 United States
+1 312 862 2000 |
Facsimile: +1 312 862 2200 | |||
www.kirkland.com
September 16, 2021 |
Pathfinder Acquisition Corporation
1950 University Avenue
Suite 350
Palo Alto, CA 94303
Ladies and Gentlemen:
We are United States tax counsel to Pathfinder Acquisition Corporation, a Cayman Islands exempted company (PFDR), in connection with the preparation of the registration statement on Form S-4 (as amended, and together with the Joint Proxy Statement/Prospectus filed therewith, the Registration Statement) (Registration No. 333-258769) originally filed with the Securities and Exchange Commission (the Commission) on August 12, 2021, under the Securities Act of 1933, as amended (the Securities Act), by PFDR. The Registration Statement relates to the registration of 51,375,000 shares of common stock and 10,750,000 warrants of PFDR (after giving effect to the Domestication, which will be renamed ServiceMax, Inc. (New SM) in connection the Domestication).
The Registration Statement is being filed in connection with the transactions contemplated by the Business Combination Agreement dated July 15, 2021, as amended and restated on August 11, 2021 (the Business Combination Agreement) by and among PFDR, Serve Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Pathfinder (Serve Merger Sub) and ServiceMax, Inc., a Delaware corporation (ServiceMax) (such transactions, including the Domestication, the Business Combination).
Capitalized terms not otherwise defined herein shall have the same meanings attributed to such terms in the Registration Statement.
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Pathfinder Acquisition Corporation
September 16, 2021
Page 2
You have requested our opinion concerning the discussion of the Domestication set forth in the section entitled U.S. Federal Income Tax ConsiderationsU.S. HoldersEffects of the Domestication on U.S. Holders in the Registration Statement. In providing this opinion, we have assumed (without any independent investigation or review thereof) that:
(a) All original documents submitted to us (including signatures thereto) are authentic, all documents submitted to us as copies conform to the original documents, all such documents have been duly and validly executed and delivered where due execution and delivery are a prerequisite to the effectiveness thereof, and all parties to such documents had or will have, as applicable, the requisite corporate powers and authority to enter into such documents and to undertake and consummate the Business Combination;
(b) All factual representations, warranties and statements made or agreed to by the parties to the Business Combination Agreement, the Sponsor Agreement, and the other agreements referred to in each of the foregoing (collectively, the Agreements and, together with the Registration Statement, the Documents), and in the representation letter provided to us by PFDR, are true, correct and complete as of the date hereof and will remain true, correct and complete through the consummation of Transactions (as defined below), in each case without regard to any qualification as to knowledge, belief, materiality, or otherwise;
(c) The descriptions of PFDR in the Registration Statement, the registration statement filed in connection with PFDRs initial public offering, and PFDRs other public filings are true, accurate and complete;
(d) The description of the Business Combination and other transactions related to the Business Combination (together, the Transactions) in the Registration Statement is and will remain true, accurate and complete, the Business Combination will be consummated in accordance with such description and with the Business Combination Agreement and the other Agreements, without any waiver or breach of any material provision thereof, and the Business Combination will be effective under applicable corporate law as described in the Business Combination Agreement and the other Agreements; and
(e) The Documents represent the entire understanding of the parties with respect to the Business Combination and other Transactions, there are no other written or oral agreements regarding the Transactions other than the Agreements, and none of the material terms and conditions thereof have been or will be waived or modified.
This opinion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended (the Code), the U.S. Treasury Regulations promulgated thereunder, and the interpretation of the Code and such regulations by the courts and the U.S. Internal Revenue
Pathfinder Acquisition Corporation
September 16, 2021
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Service, in each case, as they are in effect and exist at the date of this opinion. It should be noted that statutes, regulations, judicial decisions and administrative interpretations are subject to change at any time and, in some circumstances, with retroactive effect. Any change that is made after the date hereof in any of the foregoing bases for our opinion, or any inaccuracy in the facts or assumptions on which we have relied in issuing our opinion, could adversely affect our conclusion. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention or to supplement or revise our opinion to reflect any legal developments or factual matters arising subsequent to the date hereof. No opinion is expressed as to any transactions other than the Domestication in connection with the Business Combination, or any matter other than those specifically covered by this opinion. In particular, this opinion is limited to the matters discussed in the section entitled U.S. Federal Income Tax ConsiderationsU.S. HoldersEffects of the Domestication on U.S. Holders in the Registration Statement, subject to the assumptions, limitations and qualifications stated in the section entitled U.S. Federal Income Tax Considerations in the Registration Statement (the Tax Disclosure), and, as further described in the Tax Disclosure, does not address (i) the U.S. federal income tax treatment of any shareholder subject to special rules under the Code or the Treasury Regulations, as further described in the Tax Disclosure, (ii) any matter arising in connection with Section 367 of the Code, or (iii) any matter arising in connection with the passive foreign investment company rules of Sections 1291-1297 of the Code.
The U.S. federal income tax consequences of the transactions described in the Registration Statement are complex and are subject to varying interpretations. Our opinion is not binding on the U.S. Internal Revenue Service or any court, and there can be no assurance or guarantee that either will agree with our conclusions. Indeed, the U.S. Internal Revenue Service may challenge one or more of the conclusions contained herein and the U.S. Internal Revenue Service may take a position that is inconsistent with the views expressed herein. There can be no assurance or guarantee that a court would, if presented with the issues addressed herein, reach the same or similar conclusions as we have reached.
Based upon and subject to the foregoing, we confirm that the statements set forth in the Registration Statement under the heading U.S. Federal Income Tax ConsiderationsU.S. HoldersEffects of the Domestication on U.S. Holders, insofar as they address the material U.S. federal income tax considerations for beneficial owners of PFDR public shares and public warrants of the Domestication, and discuss matters of U.S. federal income tax law and regulations or legal conclusions with respect thereto, and except to the extent stated otherwise therein, are our opinion, subject to the assumptions, qualifications and limitations stated herein and the Tax Disclosure.
This opinion is furnished to you solely for use in connection with the Registration Statement. This opinion is based on facts and circumstances existing on the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us in the Registration Statement. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Pathfinder Acquisition Corporation
September 16, 2021
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Very truly yours,
/s/ Kirkland & Ellis LLP
Kirkland & Ellis LLP
Exhibit 10.15
SERVICEMAX, INC.
2021 ROLLOVER INCENTIVE PLAN
1. | DEFINED TERMS |
Exhibit A, which is incorporated by reference, defines certain terms used in the Plan and includes certain operational rules related to those terms.
2. | PURPOSE |
The Plan has been established to advance the interests of the Company by providing for the grant to the Participants of Stock and Stock-based Awards in connection with the merger and other transactions contemplated by that certain Business Combination Agreement, dated as of July 16, 2021, by and among Pathfinder Acquisition Corporation, a Cayman Islands exempted company incorporated with limited liability, the Company, and Stronghold Merger Sub, a Cayman Islands exempted company incorporated with limited liability and wholly owned Subsidiary of the Company (the BCA). The Plan is designed to provide for (a) grants to Participants following the Effective Date and coincident with or prior to the consummation of the transactions contemplated by the BCA, (b) Awards in replacement of grants previously made to Participants pursuant to certain profits interest awards subject to the ServiceMax JV, LP (the LP) Third Amended and Restated Limited Partnership Agreement, dated February 24, 2020 (LPA), and (c) rollovers of grants previously made to Participants under the LPA that are being substituted, assumed, or otherwise contributed or converted in connection with the transactions contemplated by the BCA. For the avoidance of doubt, in the event that the transactions contemplated by the BCA are not consummated following the grant of any Awards under the Plan, the Administrator may in its discretion provide that such Awards may be amended by the Administrator, without consent of the Participant (and notwithstanding anything in Section 10 to the contrary), to provide that such Awards will be settled in the form of Units issued under and subject to the terms of the LPA (and all references to Stock herein shall mean and refer to Units and all references to the Company shall mean and refer to the LP), or to provide for the issuance of Substitute Awards on terms and conditions consistent with Awards granted prior to the Effective Date.
3. | ADMINISTRATION |
The Plan will be administered by the Administrator. The Administrator has discretionary authority, subject only to the express provisions of the Plan: (i) to administer and interpret the Plan and any Awards; (ii) to determine eligibility for and grant Awards; (iii) to determine the exercise price or the base value from which appreciation is measured, or the purchase price, if any, applicable to any Award; (iv) to determine, modify, accelerate or waive the terms and conditions of any Award; (v) to determine the form of settlement of Awards (whether in cash, shares of Stock, other Awards or other property); (vi) to prescribe forms, rules and procedures relating to the Plan and Awards; and (vii) otherwise to do all things necessary or desirable to carry out the purposes of the Plan or any Award. Determinations of the Administrator made with respect to the Plan or any Award are conclusive and bind all Persons.
4. | LIMITS ON AWARDS UNDER THE PLAN |
4.1 Number of Shares. Subject to adjustment as provided in Section 8.2, the maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is 4,920,000 shares (the Share Pool). Without limiting the generality of the foregoing, the number of shares of Stock delivered in satisfaction of Awards will be determined (i) by excluding shares of Stock withheld by the Company in payment of the exercise price or purchase price of any Award or in satisfaction of tax withholding requirements with respect to any Award and (ii) by including only the number of shares of Stock delivered in settlement of a SAR any portion of which is settled in Stock. For the avoidance of doubt, the Share Pool will not be increased by any shares of Stock delivered under the Plan that are subsequently repurchased using proceeds directly attributable to Stock Option exercises, or by including any shares of Stock underlying Awards settled in cash or that expire, become unexercisable, terminate or are forfeited to or repurchased by the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock.
4.2 Substitute Awards. The Administrator may grant Substitute Awards under the Plan. To the extent consistent with applicable legal requirements (including applicable stock exchange requirements), shares of Stock delivered in respect of Substitute Awards will be in addition to and will not reduce the Share Pool. Notwithstanding the foregoing or anything in Section 4.1 to the contrary, if any Substitute Award is settled in cash or expires, becomes unexercisable, terminates or is forfeited to or repurchased by the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock, the shares of Stock previously subject to such Award will not increase the Share Pool or otherwise be available for future grant under the Plan. The Administrator will determine the extent to which the terms and conditions of the Plan apply to Substitute Awards, if at all.
4.3 Type of Shares. Stock delivered by the Company under the Plan may be authorized but unissued Stock, treasury Stock or previously issued Stock acquired by the Company. No fractional shares of Stock will be delivered under the Plan.
5. | ELIGIBILITY AND PARTICIPATION |
The Administrator will select the Participants from among Employees and Directors of, and consultants and advisors to, the Company and its Subsidiaries. Eligibility for Stock Options and SARs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Award to the Company or to a Subsidiary of the Company that would be described in the first sentence of Treasury Regulation § 1.409A-1(b)(5)(iii)(E).
6. | RULES APPLICABLE TO ALL AWARDS |
6.1 Award Provisions. The Administrator will determine the terms and conditions of all Awards, subject to the limitations provided herein. Each Award granted under the Plan will be evidenced by an Award agreement in such form as the Administrator determines (any such agreement, an Award Agreement). No term of an Award will provide for automatic reload grants of additional Awards upon the exercise of a Stock Option or SAR. By accepting (or, under
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such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms and conditions of the Award and the Plan. Notwithstanding any provision of the Plan to the contrary, Substitute Awards may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.
6.2 Term of Plan. No Awards may be made after the earlier of (i) the effective date of the ServiceMax Inc. 2021 Omnibus Incentive Plan, as contemplated by the BCA, and (ii) ten (10) years from the Date of Adoption, but in each case, previously granted Awards may continue beyond that date in accordance with their terms.
6.3 Transferability. Except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6.3, no Awards may be transferred other than by will or by the laws of descent and distribution. During a Participants lifetime, except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6.3, SARs and Stock Options may be exercised only by the Participant or the Participants legal representative. The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards, subject to applicable securities and other laws and such terms and conditions as the Administrator may determine.
6.4 Vesting; Exercisability. The Administrator will determine the time or times at which an Award vests or becomes exercisable and the terms and conditions on which a Stock Option or SAR remains exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting and/or exercisability of an Award (or any portion thereof), regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participants Employment ceases:
(a) Except as provided in subsections (b) and (c) below, immediately upon the cessation of the Participants Employment, each Stock Option and SAR (or portion thereof) that is then held by the Participant or by the Participants permitted transferees, if any, will cease to be exercisable and will terminate and each other Award that is then held by the Participant or by the Participants permitted transferees, if any, to the extent not then vested, will be forfeited.
(b) Subject to subsections (c) and (d) below, each Stock Option and SAR (or portion thereof) held by the Participant or the Participants permitted transferees, if any, immediately prior to the cessation of the Participants Employment, to the extent then vested and exercisable, will, unless otherwise required by applicable law, remain exercisable for the lesser of (i) a period of three (3) months following such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6.4, and will thereupon immediately terminate.
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(c) Subject to subsection (d) below, each Stock Option and SAR (or portion thereof) held by a Participant or the Participants permitted transferees, if any, immediately prior to the cessation of the Participants Employment due to his or her death or by the Company due to his or her Disability, to the extent then vested and exercisable, will remain exercisable for the lesser of (i) the one (1) year period ending on the first anniversary of such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6.4, and will thereupon immediately terminate.
(d) All Awards (whether or not vested or exercisable) held by a Participant or the Participants permitted transferees, if any, immediately prior to the cessation of the Participants Employment will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in circumstances that in the determination of the Administrator would have constituted grounds for the Participants Employment to be terminated for Cause (in each case, without regard to the lapsing of any required notice or cure periods in connection therewith).
6.5 Additional Restrictions. The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or if the Participant breaches any non-competition, non-solicitation, non-disparagement, confidentiality or other restrictive covenant by which he or she is bound.
6.6 Recovery of Compensation. The Administrator may provide in any case that any outstanding Award (whether or not vested or exercisable), the proceeds from the exercise or disposition of any Award or Stock acquired under any Award, and any other amounts received in respect of any Award or Stock acquired under any Award will be subject to forfeiture and disgorgement to the Company, with interest and other related earnings, if the Participant to whom the Award was granted (or such Participants permitted transferee) is not in compliance with any provision of the Plan or any applicable Award Agreement, or any non-competition, non-solicitation, no-hire, non-disparagement, confidentiality, invention assignment, or other restrictive covenant by which he or she is bound; provided that such forfeiture shall apply solely to any Award that became vested or exercisable within the three (3) years preceding the event that gave rise to such forfeiture or disgorgement. Each Award will be subject to any policy of the Company or any of its Subsidiaries that relates to trading on non-public information and permitted transactions with respect to shares of Stock, including limitations on hedging and pledging. In addition, each Award will be subject to any policy of the Company or any of its Affiliates that provides for forfeiture, disgorgement, or clawback with respect to incentive compensation that includes Awards under the Plan that was in effect on the grant date with respect to the applicable Award or which is otherwise adopted to comply with applicable law and will be further subject to forfeiture and disgorgement to the extent required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Exchange Act. Each Participant, by accepting or being deemed to have accepted an Award under the Plan, agrees (or will be deemed to have agreed) to the terms of this Section 6.6 and any clawback, recoupment or similar policy of the Company or any of its Subsidiaries and further agrees (or will be deemed to have further agreed) to cooperate fully with the Administrator, and to cause any and all permitted transferees of the Participant to cooperate fully with the Administrator, to effectuate any forfeiture or disgorgement described in this Section 6.6. Neither the Administrator nor the Company nor any other Person, other than the Participant and his or her permitted transferees, if any, will be responsible for any adverse tax or other consequences to a Participant or his or her permitted transferees, if any, that may arise in
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connection with this Section 6.6. For the avoidance of doubt, (i) nothing contained in this Section 6.6 or any Award Agreement limits, restricts or in any other way affects a Participants communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to such governmental agency or entity and (ii) the Participant will not be held to breach their obligations for disclosing a trade secret (y) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (z) in a complaint or other document filed under seal in a lawsuit or other proceeding; provided, however, that notwithstanding the foregoing, the Award shall be subject to forfeiture and disgorgement hereunder if the Participant unlawfully accesses trade secrets by unauthorized means.
6.7 Taxes. The grant of an Award and the issuance, delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon the full satisfaction by the Participant of all tax and other withholding requirements with respect to the Award. The Administrator will prescribe such rules for the withholding of taxes and other amounts with respect to any Award as it deems necessary. Without limitation to the foregoing, the Company or any parent or Subsidiary of the Company will have the authority and the right to deduct or withhold (by any means set forth herein or in an Award Agreement), or require a Participant to remit to the Company or a parent or Subsidiary of the Company, an amount sufficient to satisfy all U.S. and non-U.S. federal, state and local income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to participation in the Plan and any Award hereunder and legally applicable to the Participant and required by law to be withheld (including, any amount deemed by the Company, in its discretion, to be an appropriate charge to the Participant even if legally applicable to the Company or any parent or Subsidiary of the Company). The Administrator, in its sole discretion, may hold back shares of Stock from an Award or permit a Participant to tender previously-owned shares of Stock in satisfaction of tax or other withholding requirements (but not in excess of the maximum withholding amount consistent with the Award being subject to equity accounting treatment under the Accounting Rules). Any amounts withheld pursuant to this Section 6.7 will be treated as though such payment had been made directly to the Participant. In addition, the Company may, to the extent permitted by law, deduct any such tax and other withholding amounts from any payment of any kind otherwise due to a Participant from the Company or any parent or Subsidiary of the Company.
6.8 Dividend Equivalents. The Administrator may provide for the payment of amounts (on terms and subject to such restrictions and conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award; provided, however, that (i) the Administrator may provide (A) for the payment of current dividends or dividend equivalents in connection with an Award (whether or not vested), or (B) if the Award remains subject to a risk of forfeiture (time-based or performance-based), that dividends or dividend equivalents relating to such Award may be subject to the same risk of forfeiture as applies to the underlying Award, together with such additional limitations or restrictions as the Administrator may impose, and (ii) no dividends or dividend equivalents will be payable with respect to Stock Options or SARs. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the applicable requirements of Section 409A.
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6.9 Rights Limited. Nothing in the Plan or any Award will be construed as giving any Person the right to be granted an Award or to continued employment or service with the Company or any of its Subsidiaries, or any rights as a stockholder except as to shares of Stock actually delivered under the Plan. The loss of existing or potential profit in any Award will not constitute an element of damages in the event of a termination of a Participants Employment for any reason, even if the termination is in violation of an obligation of the Company or any of its Subsidiaries to the Participant.
6.10 Coordination with Other Plans. Shares of Stock and/or Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or any of its Subsidiaries. For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or any of its Subsidiaries may be settled in Stock (including, without limitation, Unrestricted Stock) under the Plan if the Administrator so determines, in which case the shares delivered will be treated as awarded under the Plan (and will reduce the number of shares thereafter available for delivery under the Plan in accordance with the rules set forth in Section 4).
6.11 Section 409A
(a) Without limiting the generality of Section 12.2 hereof, each Award will contain such terms as the Administrator determines and will be construed and administered in a manner intended to qualify for an exemption from the requirements of Section 409A or satisfy such requirements.
(b) Notwithstanding anything to the contrary in the Plan or any Award Agreement, the Administrator may unilaterally amend, modify or terminate the Plan or any outstanding Award, including, without limitation, changing the form of the Award, if the Administrator determines that such amendment, modification or termination is necessary or desirable to avoid the imposition of an additional tax, interest or penalty under Section 409A. If any provision of the Plan would otherwise frustrate or conflict with this intent, such provision will be interpreted and deemed amended so as to avoid such conflict. If an operational or documentation failure occurs with respect to the requirements of Section 409A, any affected Participant, by accepting an Award under the Plan, agrees to cooperate fully with the Company to correct such failure, to the extent possible, in accordance with any correction procedure established by the Internal Revenue Service. No provision of the Plan will be interpreted to transfer any liability for a failure to comply with Section 409A from a Participant or any other Person or entity to the Company or any of its Affiliates.
(c) If a Participant is determined on the date of the Participants termination of Employment to be a specified employee within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a separation from service, such payment will be made or provided on the date that is the earlier of (i) the first business day following the expiration of the six (6) month period measured from the date of such separation from service and (ii) the date of
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the Participants death (the Delay Period). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 6.11(c) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid, without interest, on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the Award will be paid in accordance with the normal payment dates specified for them in the applicable Award Agreement.
(d) For purposes of Section 409A, each payment made under the Plan or any Award will be treated as a separate payment.
(e) With regard to any payment considered to be nonqualified deferred compensation under Section 409A, to the extent applicable, that is payable upon a change in control of the Company or other similar event, to the extent required to avoid the imposition of an additional tax, interest or penalty under Section 409A, no amount will be payable unless such change in control constitutes a change in control event within the meaning of Treasury Regulation § 1.409A-3(i)(5).
7. | ADDITIONAL RULES APPLICABLE TO STOCK OPTIONS AND SARS |
7.1 Time and Manner of Exercise. Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Administrator receives a notice of exercise in a form acceptable to the Administrator that is signed by the appropriate Person and accompanied by any payment required under the Award. The Administrator may limit or restrict the exercisability of any Stock Option or SAR in its discretion, including in connection with any Covered Transaction. Any attempt to exercise a Stock Option or SAR by any Person other than the Participant will not be given effect unless the Administrator has received such evidence as it may require that the Person exercising the Award has the right to do so.
7.2 Exercise Price. Except with respect to Substitute Awards, the exercise price (or the base value from which appreciation is to be measured) per share of each Award requiring exercise must be no less than one hundred percent (100%) of the Fair Market Value of a share of Stock, determined as of the date of grant of the Award, or such higher amount as the Administrator may determine in connection with the grant. The exercise price for any Substitute Awards shall be determined consistent with the requirements of Section 409A of the Code, as applicable.
7.3 Payment of Exercise Price. Where the exercise of an Award (or portion thereof) is to be accompanied by payment, payment of the exercise price must be made by cash or check acceptable to the Administrator or, if so permitted by the Administrator and if legally permissible, (i) through the delivery of previously acquired unrestricted shares of Stock, or the withholding of unrestricted shares of Stock otherwise deliverable upon exercise, in either case that have a Fair Market Value equal to the exercise price; (ii) through a broker-assisted cashless exercise program acceptable to the Administrator; (iii) by other means acceptable to the Administrator; or (iv) by any combination of the foregoing permissible forms of payment. The delivery of previously acquired shares in payment of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe.
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7.4 Maximum Term. The maximum term of Stock Options and SARs must not exceed ten (10) years from the date of grant.
7.5 No Repricing. Except in connection with a corporate transaction involving the Company (which term includes, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares) or as otherwise contemplated by Section 8 below, the Company may not, without obtaining requisite stockholder approval, (i) amend the terms of outstanding Stock Options or SARs to reduce the exercise price or base value of such Stock Options or SARs; (ii) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs that have an exercise price or base value that is less than the exercise price or base value of the original Stock Options or SARs; or (iii) cancel outstanding Stock Options or SARs that have an exercise price or base value greater than the Fair Market Value of a share of Stock on the date of such cancellation in exchange for cash or other consideration.
8. | EFFECT OF CERTAIN TRANSACTIONS |
8.1 Mergers, etc. Except as otherwise expressly provided in an Award Agreement or other agreement or by the Administrator, the following provisions will apply in the event of a Covered Transaction:
(a) Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for (i) the assumption or continuation of some or all outstanding Awards or any portion thereof; or (ii) the grant of new awards in substitution therefor by the acquiror or survivor or an Affiliate of the acquiror or survivor.
(b) Cash-Out of Awards. Subject to Section 8.1(e) below, the Administrator may provide for payment (a cash-out), with respect to some or all Awards or any portion thereof (including only the vested portion thereof, with the unvested portion terminating as provided in Section 8.1(d) below), equal in the case of each applicable Award or portion thereof to the excess, if any, of (i) the Fair Market Value of one (1) share of Stock multiplied by the number of shares of Stock subject to the Award or such portion, minus (ii) the aggregate exercise or purchase price, if any, of such Award or such portion thereof (or, in the case of a SAR, the aggregate base value above which appreciation is measured), in each case, on such payment and other terms and subject to such conditions (which need not be the same as the terms and conditions applicable to holders of Stock generally) as the Administrator determines, including that any amounts paid in respect of such Award in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate. For the avoidance of doubt, if the per-share exercise or purchase price (or base value) of an Award or portion thereof is equal to or greater than the Fair Market Value of one (1) share of Stock, such Award or portion may be cancelled with no payment due hereunder or otherwise in respect thereof.
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(c) Acceleration of Certain Awards. Subject to Section 8.1(e) below, the Administrator may (but need not) provide that any Award requiring exercise will become exercisable, in full or in part, and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated, in full or in part, in each case, on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following the exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction.
(d) Termination of Awards upon Consummation of Covered Transaction. Except as the Administrator may otherwise determine or as set forth herein, each Award will automatically terminate (and in the case of outstanding shares of Restricted Stock, will automatically be forfeited) immediately upon the consummation of the Covered Transaction, other than (i) any Award that is assumed, continued or substituted for pursuant to Section 8.1(a) above, and (ii) any Award that by its terms, or as a result of action taken by the Administrator, continues following the Covered Transaction. Notwithstanding the foregoing, in the event of a Change of Control, to the extent not substituted, assumed, or continued, an Award shall vest immediately prior to and contingent on the consummation of the Change of Control, and shall be cashed out in accordance with Section 8.1(b) herein.
(e) Additional Limitations. Any share of Stock and any cash or other property or other award delivered pursuant to Section 8.1(a), Section 8.1(b) or Section 8.1(c) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate, including to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash-out under Section 8.1(b) above or an acceleration under Section 8.1(c) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest and is not forfeited in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.
(f) Non-Uniform Treatment. For the avoidance of doubt, the Administrator need not treat Participants or Awards (or portions thereof) in a uniform manner, and may treat different Participants and/or Awards differently, in connection with a Covered Transaction.
(g) Administrator. For purposes of making determinations under this Section 8.1, the Administrator shall be the Administrator as constituted prior to the Covered Transaction.
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8.2 Changes in and Distributions with Respect to Stock
(a) Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Companys capital structure that constitutes an equity restructuring within the meaning of the Accounting Rules, the Administrator will make appropriate adjustments to the maximum number of shares of Stock specified in Section 4.1 that may be delivered under the Plan, and will make appropriate adjustments to the number and kind of shares of stock or securities underlying Awards then outstanding or subsequently granted, any exercise or purchase prices (or base values) relating to Awards and any other provision of Awards affected by such change.
(b) Certain Other Adjustments. The Administrator may also make adjustments of the type described in Section 8.2(a) above to take into account distributions to stockholders other than those provided for in Sections 8.1 and 8.2(a), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan or any Award.
(c) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 8.
9. | LEGAL CONDITIONS ON DELIVERY OF STOCK |
The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. The Company may require, as a condition to the exercise of an Award or the delivery of shares of Stock under an Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of U.S. federal securities laws, or any applicable state or non-U.S. securities law. Any Stock delivered to the Participants under the Plan will be evidenced in such manner as the Administrator determines appropriate, including book-entry registration or delivery of stock certificates. In the event that the Administrator determines that stock certificates will be issued in connection with Stock issued under the Plan, the Administrator may require that such certificates bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending the lapse of the applicable restrictions.
10. | AMENDMENT AND TERMINATION |
The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by applicable law, and may at any time suspend or terminate the Plan as to any future grants of Awards; provided, however, that except as otherwise expressly provided in the Plan or the applicable Award Agreement, the Administrator may not, without the Participants consent, alter the terms of an Award so as to affect materially and adversely the Participants rights under the Award, unless the Administrator expressly reserved the right to do so in the applicable Award Agreement. Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by applicable law (including the Code), regulations or stock exchange requirements, as determined by the Administrator; provided, however, that, without stockholder approval, the Administrator shall not amend the prohibition on repricing contained in Section 7.5. For the avoidance of doubt, without limiting the Administrators rights hereunder, no adjustment to any Award pursuant to the terms of Section 8 or Section 13 will be treated as an amendment requiring a Participants consent.
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11. | OTHER COMPENSATION ARRANGEMENTS |
The existence of the Plan or the grant of any Award will not affect the right of the Company or any of its Subsidiaries to grant any Person bonuses or other compensation in addition to Awards under the Plan. The Company, in establishing and maintaining the Plan as a voluntary and unilateral undertaking, expressly disavows the creation of any rights in the Participants or others claiming entitlement under the Plan or any obligations on the part of the Company or any of its Subsidiaries, or the Administrator, except as expressly provided herein. No Award will be deemed to be salary or compensation for the purpose of computing benefits under any employee benefit, severance, pension or retirement plan of the Company or any of its Subsidiaries, unless the Administrator determines otherwise, applicable law provides otherwise or the terms of such plan expressly include such compensation.
12. | MISCELLANEOUS |
12.1 Waiver of Jury Trial. By accepting or being deemed to have accepted an Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.
12.2 Limitation of Liability. Notwithstanding anything to the contrary in the Plan or any Award, neither the Company, nor any of its Subsidiaries, nor the Administrator, nor any Person acting on behalf of the Company, any of its Subsidiaries, or the Administrator, will be liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee, or to any other Person by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to any Award.
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12.3 Unfunded Plan. Neither the Plan nor any Award will create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other Person or entity. The Companys obligations under the Plan are unfunded, and no Participant will have any right to specific assets of the Company in respect of any Award. Participants will be general unsecured creditors of the Company with respect to any amounts due or payable under the Plan.
12.4 Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any applicable law (as determined by the Administrator), such provision will be construed or deemed amended to conform to such applicable law or laws in the manner that most closely reflects the original intent of the Award or the Plan, or if it cannot be so construed or deemed amended without materially altering such intent (as determined by the Administrator), such provision will be construed or deemed stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award will remain in full force and effect.
13. | RULES FOR PARTICIPANTS IN CERTAIN JURISDICTIONS |
The Administrator may at any time and from time to time (including before or after an Award is granted) establish, adopt or revise any rules and regulations as it may deem necessary or advisable for purposes of satisfying applicable blue sky, securities, tax or other laws of various jurisdictions, including by establishing one or more sub-plans, supplements or appendices under the Plan or any Award Agreement setting forth (i) such limitations on the Administrators discretion under the Plan and (ii) such additional or different terms and conditions, in each case, as the Administrator deems necessary or advisable. Any such sub-plan, supplement, appendix, rule or regulation will be deemed to be a part of the Plan but will apply only to the Participants within the applicable jurisdiction (as determined by the Administrator); provided, however, that no sub-plan, supplement, appendix, rule or regulation established pursuant to this provision will increase the Share Pool.
14. | GOVERNING LAW |
14.1 Certain Requirements of Corporate Law. Awards and shares of Stock will be granted, issued and administered consistent with the requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case, as determined by the Administrator.
14.2 Other Matters. Except as otherwise provided by the express terms of an Award Agreement, under a sub-plan described in Section 13 or as provided in Section 14.1 above, the laws of the State of Delaware govern the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction.
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14.3 Jurisdiction. Subject to Section 12.1 and except as may be expressly set forth in an Award Agreement, by accepting (or being deemed to have accepted) an Award, each Participant agrees or will be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (ii) not commence any suit, action or other proceeding arising out of or based upon the Plan or any Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware; and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or any Award or the subject matter thereof may not be enforced in or by such court.
* * * *
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Exhibit A
DEFINED TERMS
The following terms, when used in the Plan, have the meanings and are subject to the provisions set forth below:
Accounting Rules: Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor provision.
Administrator: The Compensation Committee, except with respect to such matters that are not delegated to the Compensation Committee by the Board (whether pursuant to committee charter or otherwise). The Compensation Committee (or the Board, with respect to such matters over which it retains authority under the Plan or otherwise) may delegate (i) to one or more of its members (or one or more other members of the Board) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 152 or 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other Persons as it determines such ministerial tasks as it deems appropriate. For purposes of the Plan, the term Administrator will include the Board, the Compensation Committee, and the Person or Persons delegated authority under the Plan to the extent of such delegation, as applicable. For the avoidance of doubt, any action taken by the Compensation Committee may also be taken by the Board. Further, the Compensation Committee may not delegate its power and authority to a member of the Board or the President and Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, Director or other Person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, Director or other Person.
Affiliate: With respect to the Company, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company, including each subsidiary of the Company within the meaning of Section 424(f) of the Code.
Award: Any or a combination of the following:
(i) | Stock Options. |
(ii) | SARs. |
(iii) | Restricted Stock. |
(iv) | Unrestricted Stock. |
(v) | Stock Units, including Restricted Stock Units. |
(vi) | Performance Awards. |
(vii) Dividend Equivalents.
(viii) Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.
Board: The board of directors of the Company.
Cause: In the case of a Participant who is party to a currently effective employment, consulting, advisory, separation, severance or other agreement with the Company or any of its Subsidiaries in which cause (or a similar term) is defined, Cause means the occurrence of any circumstance constituting cause (or such similar term) pursuant to the terms of such agreement. In every other case, Cause means the occurrence of any of the following, as determined by the Administrator in its sole discretion: (i) the Participants material failure to perform (other than by reason of Disability), or substantial negligence or misconduct in the performance of, the Participants duties and responsibilities for the Company or any of its Subsidiaries; (ii) the Participants breach of any confidentiality, invention assignment, non-competition, non-solicitation, no-hire, non-disparagement or other restrictive covenant obligation set forth in any written agreement by and between the Participant and the Company or any of its Subsidiaries; (iii) the Participants material breach of any other provision of any written agreement by and between the Participant and the Company or any of its Subsidiaries; (iv) the Participants material violation of any applicable policy or code of conduct of the Company or any of its Subsidiaries; (v) the Participants indictment for or commission of, or plea of nolo contendere to, any felony or any crime involving moral turpitude; or (vi) other conduct by the Participant that is or reasonably could be expected to be materially harmful to the business interests or reputation of the Company or any of its Subsidiaries; provided, that if the Administrator determines, following termination of the Participants employment or other service for any reason other than Cause, that such termination could have been for Cause, then the Participants employment will be deemed to have been terminated for Cause for all purposes hereunder, retroactive to the date of such Participants termination of employment or other service.
Change of Control: The occurrence of any of the following events:
(i) any Person becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power of the Companys then outstanding voting securities, other than pursuant to a transaction described under subsection (ii) below that does not constitute Change of Control under subsection (ii);
(ii) the consummation by the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (in substantially the same proportions relative to each other as immediately prior to the transaction);
A-2
(iii) a change in the composition of the Board such that the individuals who, as of the Date of Adoption, constitute the Board (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the Date of Adoption whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual was a member of the Incumbent Board; but, provided, further, that any such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened election contest with respect to the removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be considered a member of the Incumbent Board; or
(iv) the consummation of a sale or disposition by the Company of all or substantially all of the Companys assets (it being understood that the sale or spinoff of one or more divisions of the Company will not necessarily constitute the sale or disposition of all or substantially all of the Companys assets).
Notwithstanding the foregoing, to the extent necessary to comply with Section 409A of the Code with respect to the payment of nonqualified deferred compensation, Change of Control shall be limited to a change in control event as defined under Section 409A of the Code. Further, for the avoidance of doubt, a transaction will not constitute a Change of Control if: (y) its sole purpose is to change the state of the Companys incorporation; or (z) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the Persons who held the Companys securities immediately before such transaction. In addition, the transactions contemplated by the BCA shall not constitute a Change of Control.
Code: The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to time in effect, including any applicable regulations and guidance thereunder.
Company: ServiceMax, Inc., a Delaware corporation.
Compensation Committee: The compensation committee of the Board.
Covered Transaction: Any of (i) a consolidation, merger or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Companys then outstanding common stock by a single Person or entity or by a group of Persons and/or entities acting in concert; (ii) a Change of Control; or (iii) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer. The transactions contemplated by the BCA shall not constitute a Change of Control.
A-3
Date of Adoption: The earlier of the date the Plan was approved by the Companys stockholders or adopted by the Board.
Director: A member of the Board who is not an Employee.
Disability: In the case of any Participant who is party to a currently effective employment, consulting, advisory, separation, severance or other agreement with the Company or any of its Subsidiaries in which disability (or a similar term) is defined, Disability means the occurrence of a disability (or such similar term) pursuant to the terms of such agreement. In every other case, Disability means, as determined by the Administrator, the Participants absence from work for a period in excess of ninety (90) days in any twelve-(12) month period due to a disability that would entitle the Participant to receive benefits under the Companys long-term disability program as in effect from time to time (if the Participant were a participant in such program).
Employee: Any person who is Employed by the Company or any of its subsidiaries.
Employment or Employed: A Participants employment or other service relationship with the Company or any of its Subsidiaries. Employment will be deemed to continue, unless the Administrator otherwise determines, so long as the Participant is Employed by, or otherwise is providing services in a capacity described in Section 5 to, the Company or any of its Subsidiaries. Except as provided otherwise in an Award Agreement, for purposes of this Plan, references to Employment by the Company shall also mean Employment by a Subsidiary, and references to Employment shall include service as a Director, consultant, or advisor. If a Participants employment or other service relationship is with any Subsidiary of the Company and that entity ceases to be a Subsidiary of the Company, the Participants Employment will be deemed to have terminated when the entity ceases to be a Subsidiary of the Company unless the Participant transfers Employment to the Company or one of its remaining Subsidiaries. Notwithstanding the foregoing, in construing the provisions of any Award relating to the payment of nonqualified deferred compensation (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a separation from service (as that term is defined in Treasury Regulation § Section 1.409A-1(h), after giving effect to the presumptions contained therein) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single service recipient with the Company under Treasury Regulation § 1.409A-1(h)(3). The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Treasury Regulation § 1.409A-1(h) for purposes of determining whether a separation from service has occurred. Any such written election will be deemed a part of the Plan.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fair Market Value: As of a particular date, (i) the closing price for a share of Stock reported on the Nasdaq Stock Market (or any other national securities exchange on which the Stock is then listed) for that date or, if no closing price is reported for that date, the closing price on the immediately preceding date on which a closing price was reported; or (ii) in the event that the Stock is not traded on a national securities exchange, the fair market value of a share of Stock determined by the Administrator, consistent with the rules of Section 409A to the extent applicable.
A-4
Participant: A Person who is granted an Award under the Plan.
Performance Award: An Award subject to performance vesting conditions, which may include Performance Criteria.
Performance Criteria: Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. A Performance Criterion and any targets with respect thereto need not be based upon an increase, a positive or improved result or avoidance of loss and may be applied to a Participant individually, or to a business unit or division of the Company or to the Company as a whole. A Performance Criterion may also be based on individual performance and/or subjective performance criteria. The Administrator may provide that one or more of the Performance Criteria applicable to an Award will be adjusted in a manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.
Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d)(3).
Plan: The ServiceMax Inc. 2021 Rollover Incentive Plan, as from time to time amended and in effect.
Restricted Stock: Stock subject to restrictions requiring that it be forfeited, redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied.
Restricted Stock Unit: A Stock Unit that is, or as to which the delivery of Stock or, if specified in the Award Agreement, of cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.
SAR: A right entitling the holder upon exercise to receive an amount (payable in cash or, if specified in the Award Agreement, in shares of Stock of equivalent value) equal to the excess of the Fair Market Value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.
Section 409A: Section 409A of the Code and the regulations thereunder.
Stock: Common stock of the Company, par value $0.0001 per share.
Stock Option: An option entitling the holder to acquire shares of Stock upon payment of the exercise price.
Stock Unit: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.
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Subsidiary: any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.
Substitute Awards: Awards granted under the Plan in substitution for one or more equity awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition.
Unrestricted Stock: Stock not subject to any restrictions under the terms of the Award.
A-6
Exhibit 10.17
[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
UNIT PURCHASE AGREEMENT
BY AND AMONG
LIQUID FIRE HOLDINGS, LLC
LIQUID FIRE INTERMEDIATE HOLDINGS, LLC
AND
SERVICEMAX, INC.
DATED AS OF MAY 26, 2021
TABLE OF CONTENTS
PAGE | ||||||
ARTICLE 1 CERTAIN DEFINITIONS |
1 | |||||
Section 1.1 |
Certain Definitions | 1 | ||||
Section 1.2 |
Interpretation | 15 | ||||
ARTICLE 2 PURCHASE AND SALE |
16 | |||||
Section 2.1 |
Purchase and Sale of the Units | 16 | ||||
Section 2.2 |
Closing of the Transactions Contemplated by this Agreement | 16 | ||||
Section 2.3 |
Deliveries at the Closing | 16 | ||||
Section 2.4 |
Purchase Price | 16 | ||||
Section 2.5 |
Withholding | 20 | ||||
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
21 | |||||
Section 3.1 |
Organization and Qualification; Subsidiaries | 21 | ||||
Section 3.2 |
Capitalization of the Group Companies | 21 | ||||
Section 3.3 |
Authority | 23 | ||||
Section 3.4 |
Financial Statements | 23 | ||||
Section 3.5 |
Consents and Approvals; No Violations | 24 | ||||
Section 3.6 |
Material Contracts | 25 | ||||
Section 3.7 |
Absence of Changes | 28 | ||||
Section 3.8 |
Litigation | 30 | ||||
Section 3.9 |
Compliance with Applicable Law | 30 | ||||
Section 3.10 |
Employee Plans | 31 | ||||
Section 3.11 |
Environmental Matters | 33 | ||||
Section 3.12 |
Intellectual Property | 33 | ||||
Section 3.13 |
Labor Matters | 36 | ||||
Section 3.14 |
Insurance | 37 | ||||
Section 3.15 |
Tax Matters | 37 | ||||
Section 3.16 |
Brokers | 39 | ||||
Section 3.17 |
Real Property | 39 | ||||
Section 3.18 |
Transactions with Affiliates | 40 | ||||
Section 3.19 |
Customers and Suppliers | 40 | ||||
Section 3.20 |
EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 41 | ||||
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER |
41 | |||||
Section 4.1 |
Organization | 41 | ||||
Section 4.2 |
Authority | 41 | ||||
Section 4.3 |
Consents and Approvals; No Violations | 42 | ||||
Section 4.4 |
Brokers | 42 | ||||
Section 4.5 |
Title to the Units; Ownership of Seller | 42 | ||||
Section 4.6 |
Litigation | 42 | ||||
Section 4.7 |
EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 43 |
i
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER |
43 | |||||
Section 5.1 |
Organization | 43 | ||||
Section 5.2 |
Authority | 43 | ||||
Section 5.3 |
Consents and Approvals; No Violations | 43 | ||||
Section 5.4 |
Brokers | 44 | ||||
Section 5.5 |
Financing | 44 | ||||
Section 5.6 |
Acquisition of Equity For Investment | 44 | ||||
Section 5.7 |
Solvency | 44 | ||||
Section 5.8 |
Acknowledgment and Representations by Buyer | 45 | ||||
ARTICLE 6 COVENANTS |
45 | |||||
Section 6.1 |
Conduct of Business of the Company | 45 | ||||
Section 6.2 |
Access to Information | 49 | ||||
Section 6.3 |
Efforts to Consummate | 49 | ||||
Section 6.4 |
Public Announcements | 51 | ||||
Section 6.5 |
[***] | 51 | ||||
Section 6.6 |
[***] | 53 | ||||
Section 6.7 |
Documents and Information | 54 | ||||
Section 6.8 |
Contact with Customers, Suppliers and Other Business Relations | 54 | ||||
Section 6.9 |
Employee Benefit Matters | 54 | ||||
Section 6.10 |
Transfer Taxes | 55 | ||||
Section 6.11 |
Debt Payoff Letters | 55 | ||||
Section 6.12 |
Tax Matters | 55 | ||||
Section 6.13 |
R&W Insurance Policy | 56 | ||||
Section 6.14 |
Termination of Affiliate Agreements | 57 | ||||
Section 6.15 |
Cooperation; Financial Statements | 57 | ||||
Section 6.16 |
Releases | 59 | ||||
Section 6.17 |
[***] | 59 | ||||
Section 6.18 |
[***] | 59 | ||||
Section 6.19 |
Notification | 60 | ||||
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT |
60 | |||||
Section 7.1 |
Conditions to the Obligations of the Company, Buyer and Seller | 60 | ||||
Section 7.2 |
Other Conditions to the Obligations of Buyer | 60 | ||||
Section 7.3 |
Other Conditions to the Obligations of the Company and Seller | 61 | ||||
ARTICLE 8 TERMINATION |
62 | |||||
Section 8.1 |
Termination | 62 | ||||
Section 8.2 |
Effect of Termination | 62 | ||||
ARTICLE 9 NON-SURVIVAL |
63 | |||||
Section 9.1 |
Non-Survival | 63 | ||||
Section 9.2 |
Non-Recourse | 65 | ||||
ARTICLE 10 MISCELLANEOUS |
66 | |||||
Section 10.1 |
Entire Agreement; Assignment; Amendment | 66 |
ii
Section 10.2 |
Notices | 66 | ||||
Section 10.3 |
Governing Law | 67 | ||||
Section 10.4 |
Fees and Expenses | 67 | ||||
Section 10.5 |
Construction | 67 | ||||
Section 10.6 |
Exhibits and Schedules | 68 | ||||
Section 10.7 |
Parties in Interest | 68 | ||||
Section 10.8 |
Extension; Waiver | 68 | ||||
Section 10.9 |
Severability | 68 | ||||
Section 10.10 |
Counterparts; Facsimile Signatures | 69 | ||||
Section 10.11 |
WAIVER OF JURY TRIAL | 69 | ||||
Section 10.12 |
Jurisdiction and Venue | 69 | ||||
Section 10.13 |
Remedies | 69 | ||||
Section 10.14 |
Waiver of Conflicts | 70 |
[***]
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | | R&W Insurance Policy | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
H | | Equity Commitment Letter |
iii
UNIT PURCHASE AGREEMENT
This UNIT PURCHASE AGREEMENT (this Agreement), dated as of May 26, 2021, is made by and among Liquid Fire Intermediate Holdings, LLC, a Delaware limited liability company (the Company), Liquid Fire Holdings, LLC, a Delaware limited liability company (Seller), and ServiceMax, Inc., a Delaware corporation (Buyer). The Company, Seller and Buyer shall be referred to herein from time to time collectively as the Parties.
RECITALS:
WHEREAS, as of the date hereof, Seller owns the Units, representing 100% of the issued and outstanding membership interests of the Company;
WHEREAS, the Parties desire that, upon the terms and subject to the conditions hereof, Buyer will purchase from Seller, and Seller will sell to Buyer, all of the Units;
WHEREAS, as a condition and material inducement to the willingness of Buyer to enter into this Agreement, concurrently with the execution and delivery of this Agreement, each of (a) the Persons set forth on Schedule 1.1(b) are entering into a form of [***] (each, a Non-Competition Agreement) in the form attached hereto as Exhibit F, and (b) the Persons set forth on Schedule 1.2 are entering into a form of Support and Restrictive Covenant Agreement (each, a Non-Solicitation Agreement) in the form attached hereto as Exhibit G; and
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to the willingness of the Company and the Seller to enter into the Agreement, Silver Lake Partners V, L.P. has delivered an Equity Commitment Letter to Buyer, dated as of the date hereof, in the form of Exhibit H (the Equity Commitment Letter).
NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby intending to be legally bound agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. As used in this Agreement, the following terms have the respective meanings set forth below.
Accounting Firm has the meaning set forth in Section 2.4(b)(ii).
Accounting Principles means the accounting principles, methodologies and policies used by the Company, in accordance with GAAP, in the preparation of the Latest Balance Sheet together with the accounting principles, methodologies and policies described on Exhibit A hereto; provided, that in the event of any conflict between any accounting principle, methodology or policy used in the preparation of the Latest Balance Sheet, on the one hand, and any accounting principle, procedure or methodology described on Exhibit A hereto, on the other hand, those on
Exhibit A shall govern. In addition, (i) the Example Statement of Net Working Capital will provide the form and format of the calculation of Net Working Capital, (ii) the Example Statement of Closing Date Indebtedness, will provide the form and format of the calculation of Closing Date Indebtedness and (iii) the Accounting Principles shall be based on facts and circumstances as they exist prior to the Closing and shall exclude the effect of any act, decision or event occurring on or after the Closing.
Acquisition Transaction has the meaning set forth in Section 6.6.
Actual Adjustment means an amount, which may be a negative number, equal to (x) the Purchase Price as finally determined pursuant to Section 2.4(b), minus (y) the Estimated Purchase Price.
Affiliate means, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms controlled and controlling have meanings correlative thereto.
Agreement has the meaning set forth in the preamble to this Agreement.
Anti-Money Laundering Laws means Laws relating to the prevention of money laundering applicable to any Group Company.
Anti-Bribery Legislation has the meaning set forth in Section 3.9(d).
Business means the business of the Group Companies as currently conducted and as proposed to be conducted, in each case, as of the date hereof.
Business Day means a day, other than a Saturday or Sunday, on which commercial banks in San Francisco, California and Houston, Texas are open for the general transaction of business.
Buyer has the meaning set forth in the preamble to this Agreement.
CARES Act means the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. 11613 and any similar or successor legislation, or executive order relating to the COVID-19 pandemic, as well as any applicable guidance issued thereunder or relating thereto (including, without limitation, IRS Notice 2020-65, 2020-38 IRB, Notice 2021-11, 2021-6 IRB, and the Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, dated August 8, 2020), and any subsequent law intended to address the consequences of the COVID-19 pandemic, including the Health and Economic Recovery Omnibus Emergency Solutions Act 6.
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Cash and Cash Equivalents means the sum of all cash and the fair market value (expressed in United States dollars) of cash equivalents (including marketable securities, checks and bank deposits) (other than Restricted Cash) of the Group Companies as of 11:59 PM Eastern Time on the day immediately preceding the Closing Date, in each case, calculated in accordance with the Accounting Principles; provided that such amount shall be reduced on a dollar-for-dollar basis by the amount of any Taxes paid on the Closing Date before the Closing that would otherwise be included in Indebtedness. For the avoidance of doubt, Cash and Cash Equivalents shall be calculated net of issued but uncleared checks and drafts and shall include checks, other wire transfers and drafts deposited or available for deposit for the account of any Group Company and shall exclude Restricted Cash.
Closing has the meaning set forth in Section 2.2.
Closing Date has the meaning set forth in Section 2.2.
Closing Date Indebtedness means the Indebtedness as of immediately prior to the Closing; provided that Taxes included in Indebtedness shall be measured as of the close of the Closing Date.
Code means the Internal Revenue Code of 1986, as amended.
Company has the meaning set forth in the preamble to this Agreement.
Company Intellectual Property Rights has he meaning set forth in Section 3.12(a).
Companys Knowledge means, as it relates to (x) the Company or any other Group Company, as of the applicable date, the knowledge after due inquiry of [***] and (y) the Seller, as of the applicable date, the knowledge after due inquiry of [***].
Company Material Adverse Effect means an effect, change, result, occurrence, fact, condition, event, circumstance, development, omission or act that has had or would reasonably be expected to have, individually or together with one or more other effects, changes, results, occurrences, facts, conditions, events, circumstances, developments, omissions or acts, a material adverse effect (x) upon the ability of any Group Company or Seller to fulfill their respective obligations hereunder or to consummate the transactions contemplated by this Agreement and the Transaction Documents or (y) upon the condition (financial or otherwise), business, liabilities, assets or results of operations of the Group Companies, taken as a whole; provided, however, that for purposes of clause (y) only, none of the following shall be taken into account, either alone or in combination in determining whether a Company Material Adverse Effect has occurred unless, in the case of clauses (i) through (v) and (ix) below, such effect, change, result, occurrence, fact, condition, event, circumstance, development, omission or act, or group of any of the foregoing, taken as a whole, has an adverse and disproportionate effect on the Group Companies relative to other businesses operating in the industry in which the Business operates, in which case, any adverse effect, change, result, occurrence, fact, condition, event, circumstance, development, omission or act arising from or related to any of the foregoing shall be taken into account in determining whether a Company Material Adverse Effect has occurred: (i) conditions generally affecting the United States economy or credit, securities, currency, financial, banking or capital
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markets (including any disruption thereof and any decline in the price of any security or any market index) in the United States or elsewhere in the world, (ii) any national or international political conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (iii) changes in GAAP after the date hereof, (iv) changes in any Laws, rules, regulations, orders, or other binding directives issued by any Governmental Entity after the date hereof, including any of the foregoing affecting the oil and gas industry, or any action required to be taken under any Law, rule, regulation, order or existing contract by which any Group Company (or any of their respective assets or properties) is bound, (v) any change that is generally applicable to the industries or markets in which the Group Companies operate, including the oil and gas industry and any substantial change in oil prices, (vi) the public announcement of the transactions contemplated by this Agreement (including by reason of the identity of Buyer or any communication by Buyer or any of its Affiliates regarding its plans or intentions with respect to the Business and, to the extent principally relating to, the impact thereof on relationships with customers, suppliers, distributors, partners or employees or others having relationships with any Group Company), (other than for purposes of any representation or warranty contained in Section 3.5 and Section 4.3), (vii) any failure by any Group Company to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending on or after the date of this Agreement (although the underlying reasons for such failure may be taken into account in determining whether there has been a Company Material Adverse Effect), (viii) the taking of any action by any Group Company to the extent required by this Agreement, including the completion of the transactions contemplated hereby, other than in the covenants and agreements in Section 6.1, (ix) any epidemic, pandemic, or disease outbreak (including COVID-19) or any Law, regulation, statute, directive, pronouncement or guideline issued by a Governmental Entity, the Centers for Disease Control and Prevention or the World Health Organization providing for business closures, sheltering-in-place or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including COVID-19) or (x) the matters set forth on Schedule 1.1(c) (it being understood that (a) the underlying facts giving rise or contributing to such matters may be taken into account in determining whether there has been a Company Material Adverse Effect if such facts are not otherwise excluded under this definition and (b) the mere occurrence of a matter set forth on Schedule 1.1(c) or a matter extending beyond a matter set forth on Schedule 1.1(c) shall not in and of itself be deemed to create an implication or inference that a Company Material Adverse Effect has occurred).
[***].
COVID-19 means SARS-CoV-2 or COVID-19, and any evolutions thereof or related or associated epidemics, pandemic or disease outbreaks.
Credit Facilities means the credit facilities established pursuant that certain Credit Agreement, dated as of December 11, 2018, among the Company, LiquidFrameworks, Inc., a Texas corporation, Webster Bank, National Association, a national banking association, as administrative agent and collateral agent for the several financial institutions and other lenders from time to time party thereto (collectively, the Lenders), and such Lenders, as amended, supplemented, or otherwise modified from time to time prior to the date hereof in accordance with the provisions thereof.
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Current Assets means the Companys and its Subsidiaries consolidated total current assets, as defined by and determined in accordance with the Accounting Principles, as set forth on the Example Statement of Net Working Capital, but excluding (a) cash and cash equivalents, (b) Seller Expenses and (c) all current income, franchise, margin or similar Tax assets and all deferred Tax assets.
Current Liabilities means the Companys and its Subsidiaries consolidated total current liabilities (including all current and long-term deferred revenue and, for the avoidance of doubt, will not exclude any amounts included in Indebtedness related to deferred revenue), as defined by and determined in accordance with the Accounting Principles, as set forth on the Example Statement of Net Working Capital, but excluding (a) any Indebtedness; (b) Seller Expenses; (c) any current income, franchise, sales, margin or similar Tax liabilities and all deferred Tax liabilities; (d) any obligations for borrowed money between the Company and any wholly-owned Subsidiary of the Company or between any two wholly-owned Subsidiaries of the Company; and (e) any obligation under a capitalized or operating lease or other leases other than normal course accrued but unpaid lease obligations.
Debt Payoff Letters has the meaning set forth in Section 6.11.
De-SPAC Transaction means the completion of a merger or consolidation of Buyer (or an Affiliate thereof designated in writing by Buyer to Seller) with a special purpose acquisition company or its subsidiary in which the common stock (or similar securities) of the surviving or parent entity are publicly traded in a public offering pursuant to an effective registration statement under the Securities Act.
De-SPAC Transaction Documents means the transaction documentation reasonably necessary to consummate the De-SPAC Transaction, including a business combination agreement, equity purchase agreement (or, in either case, similar definitive transaction agreement) and proxy/registration statement.
Employee Benefit Plan means any plan, program, arrangement, agreement or policy, whether or not subject to ERISA, that is: an employee benefit plan (as such term is defined in Section 3(3) of ERISA), and each other health, welfare, pension, retirement, employee assistance, wellness, employment (including offer letters to the extent they provide for severance), individual independent contractor, profit-sharing, bonus, incentive, deferred compensation, commission, vacation, paid-time off, stock purchase, stock option, stock bonus, phantom equity, equity appreciation, profits interests, or other equity or equity-based incentive, retention, change in control, severance, termination pay, material fringe benefit, or other employee benefit plan, program or arrangement, agreement or policy that is maintained, sponsored or contributed to, or required to be contributed to, by any Group Company or any Affiliate for the benefit of, or that covers, any current or former employee, director, manager, officer, individual independent contractor or other individual service provider of any Group Company or for which any Group Company has any actual or contingent liability.
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Enterprise Value means $145,000,000 (ONE HUNDRED FORTY FIVE MILLION UNITED STATES DOLLARS); provided that in the event that the Closing does not occur by 11:59 p.m. Eastern Time on September 30, 2021, the Enterprise Value shall increase as of 11:59 p.m. Eastern Time on each successive day following September 30, 2021 on which the Closing does not occur by $80,645.16 until the earlier of (x) November 1, 2021 or (y) the Closing Date; provided further that in no event shall the Enterprise Value exceed $147,500,000.
Environmental Laws means all federal, state, local and foreign statutes, regulations, and ordinances concerning pollution or protection of the environment or human health (in regards to exposure to Hazardous Materials), including all those relating to the generation, handling, transportation, treatment, storage, disposal, distribution, labeling, discharge, release, control, or cleanup of any Hazardous Materials.
Equity Commitment Letter has the meaning set forth in the recitals hereto.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate means any Person treated at any relevant time as a single employer under Section 414 of the Code or Section 4001 of ERISA with any of the Group Companies.
Escrow Account has the meaning set forth in Section 2.4(a)(i).
Escrow Agent has the meaning set forth in Section 2.4(a)(i).
Escrow Agreement has the meaning set forth in Section 2.4(a)(i).
Escrow Amount has the meaning set forth in Section 2.4(a)(i).
Escrow Funds means, at any time, the portion of the Escrow Amount then remaining in the Escrow Account.
Estimated Purchase Price means the Companys good faith estimate of the Purchase Price, which the Company shall calculate by using the Enterprise Value as of the Closing Date and the Companys good faith reasonable estimates of the (i) Closing Date Indebtedness, (ii) amount of Cash and Cash Equivalents, (iii) amount of Unpaid Seller Expenses and (iv) the Net Working Capital Adjustment.
Estimated Purchase Price Calculation has the meaning set forth in Section 2.4(a).
Example Statement of Closing Date Indebtedness means the illustrative calculation of the Closing Date Indebtedness attached hereto as Exhibit B to this Agreement (which calculates the Closing Date Indebtedness as of the Latest Balance Sheet Date).
Example Statement of Net Working Capital means the illustrative calculation of Net Working Capital attached hereto as Exhibit B (which calculates Net Working Capital as of the Latest Balance Sheet Date).
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Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
Excluded Payroll Taxes shall mean the employers share of any Taxes due under Section 3111(a) of the Code in the case of any current employee of any Group Company whose wages from any Group Company for the 2020 tax year exceeded $142,800.
Financial Statements has the meaning set forth in Section 3.4.
Fraud means actual and intentional common law fraud (not fraud based on recklessness or negligence) under Delaware law with specific intent to deceive solely based on a representation contained in this Agreement or a certificate described in Section 7.2(c) or Section 7.3(c) or any other Transaction Document.
Fundamental Representations has the meaning set forth in Section 7.2(a).
Funded Indebtedness means, as of any time, without duplication, the outstanding principal amount of, accrued and unpaid interest on, and other payment obligations (including any prepayment premiums payable as a result of the consummation of the transactions contemplated by this Agreement) arising under, any obligations of any Group Company consisting of (i) indebtedness for borrowed money or indebtedness issued in substitution or exchange for borrowed money (including under the Credit Facilities), or (ii) indebtedness evidenced by any note, bond, debenture or other debt security, in each case, as of such time. Notwithstanding the foregoing, Funded Indebtedness shall not include any (v) amounts included in Net Working Capital as a Current Liability, (w) obligations under operating leases or capitalized or other leases, (x) undrawn letters of credit (including any that are outstanding under the Credit Facilities), (y) obligations under any interest rate, currency or other hedging agreements (other than breakage costs payable upon termination thereof on the Closing Date) or (z) amounts included as Seller Expenses.
GAAP means United States generally accepted accounting principles.
Global Trade Laws means applicable Laws governing import and export controls and economic sanctions, including the Export Administration Regulations, the Arms Export Control Act, the International Traffic in Arms Regulations, the International Emergency Economic Powers Act, the United States Trading with the Enemy Act, the economic sanctions implemented by the Office of Foreign Assets Controls within the United States Department of the Treasury, and applicable laws governing imports and customs, including the U.S. customs regulations at 19 C.F.R. Chapter 1, and any regulations or orders issued thereunder.
Governing Documents means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the Governing Documents of a corporation are its certificate of incorporation and by-laws, the Governing Documents of a limited partnership are its limited partnership agreement and certificate of limited partnership and the Governing Documents of a limited liability company are its operating agreement and certificate of formation.
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Governmental Entity means any (i) United States federal, state local, municipal, foreign or other government, (ii) governmental, quasi-governmental, regulatory, administrative authority, agency, division, instrumentality or commission (including any governmental agency, branch, department, official or entity and any court or other tribunal), (iii) any judicial or arbitral body, arbitrator or mediator or any body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or Tax authority or power of any nature or (iv) any self-regulatory organization as defined in Section 3(a)(26) of the Exchange Act and any other U.S. or foreign securities exchange, futures exchange, contract market, any other exchange or corporation or similar self-regulatory body or organization.
Group Companies means, collectively, the Company and each of its Subsidiaries.
Hazardous Materials means any substance defined or regulated as a hazardous or toxic substance, material or waste or as a pollutant or contaminant, or words of similar intent or meaning, pursuant to any Environmental Law.
HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness means, as of any time, without duplication, (i) Funded Indebtedness, (ii) all obligations of the type referred to in the definition of Funded Indebtedness of any Person other than any Group Company the payment of which any Group Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations (other than obligations of the Company in respect of any of its Subsidiaries and obligations of any Subsidiary in respect of any other Subsidiary), (iii) any breakage costs payable upon termination on the Closing Date of, and any obligations of any Group Company under, any interest rate swap, currency swap, forward currency or interest rate contracts or other interest rate or currency hedging arrangements, (iv) all unpaid Taxes (separately calculated for each applicable taxing authority and each applicable Tax period (or portion thereof), with the applicable amount of Tax liabilities for each jurisdiction for each applicable Tax period not being an amount less than zero with respect to any of the Group Companies) that are income, franchise, margin or similar Taxes of the Group Companies in respect of jurisdictions in which a Group Company is currently filing (or has historically filed) Tax Returns or with respect to which a Group Company has established nexus after December 31, 2019, but before the Closing Date calculated (A) by taking into account any estimated Tax payments, (B) taking into account Transaction Tax Deductions that are at least more likely than not deductible in such Pre-Closing Tax Period and net operating losses and credits in lieu of Tax refunds or overpayments, in each case to the extent they actually reduce the Companys cash Tax liability for such Pre-Closing Tax Period, (C) otherwise in accordance with past practice of the Group Companies to the extent consistent with applicable Law, and (D) in accordance with the principles of Section 6.12(f), (v) any Taxes deferred prior to the Closing pursuant to the CARES Act to the extent attributable to a Pre-Closing Tax Period, (vi) all obligations in respect of any unpaid severance or other termination-related payments for any termination that occurs on or prior to the Closing, unfunded deferred compensation, or 100% of accrued but unpaid bonuses (including, committed spot bonuses (or any other bonuses granted or awarded prior to the Closing, whether or not payable on or prior to the Closing), but excluding, for the avoidance of doubt, spot bonuses that are otherwise uncommitted as of the Closing (or
8
have not been granted or awarded)) that are payable by any Group Company to any current or former employee, director, manager, officer, individual independent contractor or other individual service provider, including the employer portion of payroll Taxes arising from all such obligations (calculated without regard to the ability to defer such Taxes under the CARES Act), (vii) all outstanding reimbursement obligations in respect of drawn letters of credit issued for the account of any Group Company (but for the avoidance of doubt excluding any obligations in respect of undrawn letters of credit), (viii) all obligations under any capitalized lease calculated in accordance with GAAP, other than the Lease Agreement, (ix) all obligations under performance bonds, banker acceptances or similar obligations to the extent drawn, and (x) all accrued and unpaid interest on, and applicable prepayment premiums, breakages costs, penalties or similar contractual charges arising as a result of the discharge at Closing of, any such foregoing obligations. For the avoidance of doubt Indebtedness shall not include any item that would otherwise constitute Indebtedness that is (1) an obligation between the Company and any wholly-owned Subsidiary of the Company or between any two wholly-owned Subsidiaries of the Company (2) an obligation under any operating lease, (3) an undrawn letter of credit, (4) any deferred revenue obligation, (5) any amount included in Net Working Capital as a Current Liability, or (5) any severance or other termination related expenses arising as a result of any employment decisions of Buyer, including the employer portion of payroll Taxes arising from such obligations (calculated without regard to the ability to defer such Taxes under the CARES Act).
Intellectual Property Rights means all intellectual property rights throughout the world, including patents, copyrights, trademarks, service marks and trade names, all goodwill associated therewith and all registrations and applications therefor, Internet domain names, social media accounts, moral rights, database rights, trade secrets, rights in Software (whether in source or object code), and know-how, in each case, to the extent protectable by applicable law.
Latest Balance Sheet has the meaning set forth in Section 3.4(a)(ii).
Latest Balance Sheet Date means April 30, 2021.
Law means any law (federal, national, state or local, whether foreign, multi-national, or domestic law, including common law), statute, ordinance, treaty, rule, regulation, judgment, injunction, approval, permit, requirement or other governmental restriction, order or decree of any Governmental Entity, in each case having the force and effect of law, or any similar form of decision or approval of, or determination by, or any binding interpretation or administration of any of the foregoing by, any Governmental Entity that is issued, enacted, adopted, promulgated, implemented or otherwise put in effect by or under the authority of any Governmental Entity.
Lease Agreement [***].
Lien means any mortgage, pledge, security interest, encumbrance, lien (statutory or otherwise), claim, option, right of first refusal, right of first offer, attachment, easement, covenant, charge or other right, restriction or encumbrance of any kind, including any collateral security arrangements, conditional or installment sales agreements or other restriction of any kind.
Material Contracts has the meaning set forth in Section 3.6(b).
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Material Lease has the meaning set forth in Section 3.17.
Material Permit has the meaning set forth in Section 3.9.
Multiemployer Plan has the meaning set forth in Section 3(37) of ERISA.
Net Working Capital means Current Assets minus Current Liabilities as of 11:59 PM Eastern Time on the day immediately preceding the Closing Date, in each case, determined on a consolidated basis in accordance with the Accounting Principles.
Net Working Capital Adjustment means (i) the amount by which Net Working Capital exceeds (i.e., is less negative than) the Target Net Working Capital High Value or (ii) the amount by which Net Working Capital is less than (i.e., more negative than) the Target Net Working Capital Low Value, in each case, if applicable.
New Plans has the meaning set forth in Section 6.9.
Non-Competition Agreement has the meaning set forth in the recitals hereto.
Non-Solicitation Agreement has the meaning set forth in the recitals hereto.
Open Source Software means any Software that is licensed pursuant to: (i) any license that is, or is substantially similar to, a license now approved by the Open Source Initiative, a California public benefit corporation, and listed at http://www.opensource.org/licenses or (ii) any license under which Software or other materials are distributed or licensed as free software, open source software or under similar terms.
Order means any order, decision, writ, injunction, decree, law, statute, or other ruling entered or issued by any Governmental Entity.
Parties has the meaning set forth in the preamble to this Agreement.
Permitted Liens means (a) mechanics, materialmens, carriers, repairers and other Liens arising or incurred in the ordinary course of business for amounts that are not yet delinquent or are being contested in good faith, (b) Liens for Taxes, assessments or other governmental charges not yet due and payable as of the Closing Date or which are being contested in good faith and for which appropriate reserves have been established in accordance with GAAP, (c) encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that do not materially interfere with the Group Companies present uses or occupancy of such real property, (d) Liens securing the obligations of the Group Companies under the Credit Facilities which will be released on or prior to the Closing, (e) Liens granted to any lender at the Closing in connection with any financing by Buyer of the transactions contemplated hereby, (f) zoning, building codes and other land use laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by any Governmental Entity having jurisdiction over such real property and which are not violated by the current use or occupancy of such real property or the operation of the businesses of the Group Companies or any violation of which would not have a Company Material Adverse Effect, (g) nonexclusive licenses of Intellectual Property granted in the ordinary course of business, and (h) Liens described on Schedule 1.1(a).
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Person means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, association or other similar entity, whether or not a legal entity.
Personal Information means any data or information used or usable, alone or in combination with other available information, to identify, contact, or locate a natural person and has the same meaning as the term personal information or the equivalent under applicable Privacy Laws, such as, without limitation, last name with first name or first initial, address, telephone number, email address, account information, Social Security Number, health plan beneficiary identification number, fingerprints and other biometric identifiers.
Pre-Closing Tax Period means any taxable period that ends on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period.
Privacy Laws means all Laws that govern or relate to the (a) privacy, security, or confidentiality of any Personal Information or (b) collection, storage, use, Processing, disclosure and onward transfer of any Personal Information. Without limiting the generality of the foregoing, Privacy Laws include, as amended: the Fair Credit Reporting Act, 15 U.S.C. § 1681 et. seq.; the General Data Protection Regulation 2016/679; the California Consumer Privacy Act; the Telephone Consumer Protection Act, 47 U.S.C. § 227; the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108; the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15 U.S.C. 7701-7713; all state Law equivalents of such Laws; implementing regulations or rulemaking concerning such Laws; and all Laws requiring notification of a Security Breach or other unauthorized access, use or disclosure of Personal Information.
Proceeding has the meaning set forth in Section 3.8.
Process or Processing means any operation or set of operations which is performed on Personal Information or on sets of Personal Information, whether or not by automated means, such as the receipt, access, acquisition, collection, recording, organization, compilation, structuring, storage, adaption or alteration, retrieval, consultation, use disclosure by transfer, transmission, dissemination or otherwise making available, alignment or combination, restriction, disposal, erasure or destruction.
Proposed Closing Date Calculations has the meaning set forth in Section 2.4(b)(i).
Purchase Price means (i) the Enterprise Value, plus (ii) the Net Working Capital Adjustment (which may be a negative number), plus (iii) the amount of Cash and Cash Equivalents, minus (iv) the amount of Closing Date Indebtedness, minus (v) the amount of Unpaid Seller Expenses.
Purchase Price Dispute Notice has the meaning set forth in Section 2.4(b)(ii).
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R&W Insurance Policy means that certain Buyers representations and warranties insurance policy substantially in the form of Exhibit D attached hereto.
Required Information means (i) the audited financial statements of the Group Companies for the fiscal years ended December 31, 2020 and December 31, 2019, in each case, prepared in accordance with American Institute of Certified Public Accountants Accounting and Valuation Guide standards and (ii) the unaudited financial statements of the Group Companies for each quarterly period in fiscal year 2021 that ends 45 days or more before the Closing Date (to be prepared in accordance with GAAP consistently applied).
Restricted Cash means (i) all cash, cash equivalents, marketable securities, commercial paper, certificates of deposit and any other bank deposits, treasury bills or short term investments held by any of the Group Companies which is not freely usable by the Group Companies because it is subject to restrictions, limitations on use, distribution or repatriation by contractual obligation, (ii) amounts held in escrow or otherwise held as deposits, security or collateral with third parties (including security deposits) or (iii) cash held in a bank, lock-box or other deposit account located in a jurisdiction outside of the United States.
Review Period has the meaning set forth in Section 2.4(b)(ii).
Security Breach means any cyber or security incident that has resulted in unauthorized destruction, loss, alteration, Processing, disclosure of, acquisition of, or access to Personal Information or Sensitive Information.
Seller has the meaning set forth in the preamble to this Agreement.
Seller Expenses means, without duplication, (i) the aggregate amount due and payable by the Group Companies as of the Closing for all fees, Taxes, charges, payments, costs, expenses and other obligations incurred by or on behalf of any of the Group Companies or by or on behalf of Seller (to the extent such amounts are a liability of, or to be paid by, any member of the Group Companies) in connection with the preparation, negotiation and consummation of the transactions contemplated by this Agreement, the other Transaction Documents, and any alternative transaction contemplated by the Seller or the Group Companies, including (A) the fees and expenses of any Group Companies or the Sellers respective legal counsel, bankers, financial advisors, accountants, consultants, advisors, agents, representatives and other third party professional or advisor, including any Sponsor Fees, incurred by any of the Group Companies or by or on behalf of Seller (to the extent such amounts are a liability of any Group Company), (B) any sale, severance, success, retention, change in control, transaction or similar bonus (including the full amount of the Transaction Bonuses) to be paid by a Group Company to any current or former employee, director, manager, officer, individual independent contractor or other individual service provider of any of the Group Companies that is or becomes payable solely as a result of the execution of this Agreement or the consummation of the transactions contemplated hereby, (ii) any payroll Taxes associated with such payments (calculated without regard to the ability to defer such Taxes under the CARES Act and excluding any Excluded Payroll Taxes), (iii) [***] payable by the Group Companies in connection with the tail policy pursuant to Section 6.5(c), and (iv) any Sponsor Fees; provided, however, that Seller Expenses shall exclude (i) any amounts based upon or arising from any arrangements put in place by Buyer, or by any Group Company at the
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written request of Buyer, (ii) any severance-related expenses arising as a result of employment decisions of Buyer, (iii) any double trigger payments that are triggered by a termination of employment that occurs on or following the Closing at the direction of, or as a result of any acts or omissions by, the Buyer or its Affiliates, (iv) any fees, costs and expenses associated with the R&W Insurance Policy and (v) any Transfer Taxes.
Schedules means the disclosure schedules to this Agreement, dated as of the date hereof, delivered by the Company and Seller to Buyer concurrently with the execution and delivery of this Agreement.
Securities Act means the Securities Act of 1933, as amended.
Sensitive Information means (a) all Personal Information that is subject to Privacy Laws, and (b) material trade secrets.
Software means computer software, including object code, source code, firmware and embedded versions thereof and documentation related thereto.
Solvent when used with respect to any Person or group of Persons on a combined basis, means that, as of any date of determination, (A) the amount of the fair saleable value of the assets of such Person (or group of Persons on a combined basis) will, as of such date, exceed (1) the value of all liabilities of such Person as of such date, as such quoted terms are generally determined in accordance with applicable Laws governing determinations of the insolvency of debtors, and (2) the amount that will be required to pay its debts and obligations in the ordinary course of business as they become due, (B) such Person (or group of Persons on a combined basis) will have adequate capital for the operation of the businesses following such date and (C) such Person (or group of Persons on a combined basis) will be able to pay its liabilities, including contingent and other liabilities, as they mature.
Specified Party has the meaning set forth in Section 9.1(a).
Sponsor Fees means any transaction, exit, expense reimbursement, monitoring, management, operation, success or other fees or amounts under any agreement (a Sponsor Agreement) with any financial investor in any Group Company, including Luminate, its Affiliates and any Affiliate of Seller.
Subsidiary means, with respect to any Person, any corporation, company, limited liability company, partnership, association, or other business entity of which (i) if a corporation or a company, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation or a company), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation or a company) if such Person or Persons shall be allocated a majority of such business entitys gains or losses or shall be a, or control any, managing director or general partner of such business entity (other than a corporation or a company). The term Subsidiary shall include all Subsidiaries of such Subsidiary.
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Systems means all Software, databases, hardware, networks, electronics, platforms, servers, switches, and related information technology systems, services and equipment that are used, owned, purported to be owned by any of the Group Companies.
Target Net Working Capital High Value means [***].
Target Net Working Capital Low Value means [***].
Tax means any federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, real property gains, registration, value added, excise, natural resources, escheat, unclaimed property, severance, stamp, occupation, windfall profits, environmental, customs, duties, real property, personal property, capital stock, social security (or similar), unemployment, disability, payroll, license, employee or other withholding, or other tax of any kind or any charge of any kind in the nature of taxes, and any interest, penalties or additions to tax in respect of the foregoing (whether disputed or not).
Tax Return has the meaning set forth in Section 3.15(a).
Termination Date has the meaning set forth in Section 8.1(d).
Top Customers has the meaning set forth in Section 3.19(a).
Top Suppliers has the meaning set forth in Section 3.19(b).
Transaction Bonuses [***].
Transaction Documents [***].
Transaction Tax Deductions means any loss or deduction deductible (at least at a more likely than not level of comfort by any of the Group Companies, as determined by a Big 4 accounting firm) in a Pre-Closing Tax Period resulting from (A) the payment of bonuses, change in control payments, severance payments, retention payments or similar payments made by any of the Group Companies on or prior to the Closing Date or included in the computation of the Net Working Capital or Closing Date Indebtedness; (B) the payment of fees, expenses and interest (including amounts treated as interest for Tax purposes and any breakage fees or accelerated deferred financing fees) incurred by any of the Group Companies with respect to the payment of Indebtedness in connection with the transactions contemplated by this Agreement that were paid on or prior to the Closing Date or included in the computation of Closing Date Indebtedness or Net Working Capital; or (C) Seller Expenses (or amounts that would have been Seller Expenses if not paid on or prior to the Closing); provided that, in connection with the foregoing and the preparation of Tax Returns, Buyer shall cause the Group Companies to make an election under Revenue Procedure 2011-29, 2011-18 IRB, to treat 70% of any success-based fees that were paid by or on behalf of the Group Companies as an amount that did not facilitate the transactions contemplated under this Agreement and the calculation of Transaction Tax Deductions shall assume such election is timely and validly made and therefore treat 70% of such costs as deductible in the taxable year that includes the Closing Date for U.S. federal income tax purposes.
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Transfer Taxes has the meaning set forth in Section 6.10.
Unaudited Financial Statements has the meaning set forth in Section 3.4(a)(ii).
Union means any labor union or other employee representative body.
Units has the meaning set forth in Section 3.2(a).
Unpaid Seller Expenses means the aggregate amount of Seller Expenses incurred and unpaid as of immediately prior to the Closing; provided that Unpaid Seller Expenses shall exclude any amounts included in Net Working Capital as a Current Liability.
WARN Act means the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar applicable law.
Section 1.2 Interpretation. Unless otherwise indicated to the contrary herein by the context or use thereof: (i) the words, herein, hereto, hereof and words of similar import refer to this Agreement as a whole, including the Schedules and Exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause contained in this Agreement; (ii) masculine gender shall also include the feminine and neutral genders, and vice versa; (iii) words importing the singular shall also include the plural, and vice versa; (iv) the words include, includes or including shall be deemed to be followed by the words without limitation; (v) the words party or parties shall refer to parties to this Agreement; (vi) all references to Articles, Sections, Exhibits or Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement; (vii) the word or has the inclusive meaning represented by the phrase and/or and is disjunctive but not necessarily exclusive; (viii) the words writing, written and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (ix) references to any Person include the successors and permitted assigns of that Person; (x) references from or through any date mean, unless otherwise specified, from and including or through and including, respectively; (xi) the words dollar or $ shall mean U.S. dollars; (xii) the word threatened or any variation thereof means threatened in writing; (xiii) the word day means calendar day unless Business Day is expressly specified; (xiv) any reference in this Agreement to ordinary course of business means an action taken, or omitted to be taken, by any Person in the ordinary course of such Persons business consistent with past practice and (xv) if any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter. When calculating the period of time before which, within which or following which, any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. The phrase made available, provided to or similar phrases when used in reference to a document means that the document was made available for viewing in the Companys electronic data room hosted by Data Site no later than 12:01am Eastern Time one (1) day prior to the date hereof.
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ARTICLE 2
PURCHASE AND SALE
Section 2.1 Purchase and Sale of the Units. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer shall purchase, acquire and accept from Seller, and Seller shall sell, assign, transfer, convey and deliver to Buyer, the Units free and clear of all Liens (other than Liens arising under applicable securities Laws).
Section 2.2 Closing of the Transactions Contemplated by this Agreement. The closing of the transactions contemplated by this Agreement (the Closing) shall take place at 10:00 a.m. Eastern Time, on a date to be specified by the Parties, which shall be no later than the second Business Day after satisfaction (or waiver) of the conditions set forth in ARTICLE 7 (other than those conditions which are to be satisfied by the delivery of documents or taking of any other action at the Closing by any Party, but subject to the satisfaction or waiver of such conditions), (the date of Closing, the Closing Date), at the offices of Kirkland & Ellis LLP, 3330 Hillview Avenue, Palo Alto, California, unless another time, date or place is agreed to in writing by Buyer and Seller; provided that notwithstanding the foregoing and anything to the contrary in this Agreement, in no event shall the Closing occur before the earlier of (x) November 1, 2021 and (y) [***] De-SPAC Transaction[***] or (ii) [***] De-SPAC Transaction [***] unless otherwise agreed to in writing by Buyer; provided, further, that Buyer may, in its sole discretion, elect for the Closing to occur prior to [***] if it provides at least two Business Days prior written notice thereof to Seller and the Company, in which case, the Closing shall occur on the date specified in such notice, which shall not be earlier than two Business Days after the date thereof, provided all conditions set forth in ARTICLE 7 are satisfied or waived on such date.
Section 2.3 Deliveries at the Closing.
(a) Deliveries by Buyer. At the Closing, Buyer shall pay the Estimated Purchase Price in accordance with the provisions set forth in Section 2.4.
(b) Deliveries by Seller. At the Closing, Seller shall deliver to Buyer an instrument of transfer of the Units reasonably acceptable to Buyer.
(c) Other Deliveries. At the Closing, the closing certificates, the Transaction Documents and other documents required to be delivered pursuant to this Agreement with respect to the Closing pursuant to ARTICLE 7 will be executed and exchanged.
Section 2.4 Purchase Price.
(a) Estimated Purchase Price. No later than [***] prior to the Closing, Seller shall deliver to Buyer its good faith calculation of the Estimated Purchase Price (the Estimated Purchase Price Calculation). From and after the delivery of the Estimated Purchase Price, the Parties shall work in good faith to update the Estimated Purchase Price Calculation for changes thereto arising after the calculation thereof and prior to 11:59 PM Eastern Time on the date immediately preceding the Closing Date and Seller shall review and consider Buyers comments in good faith. Seller shall, and shall cause each Group Company to, reasonably promptly after a reasonable written request by the Buyer, make those portions of the Group Companys financial
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records, supporting documents and work papers and relevant personnel reasonably available to Buyer and its accountants and other representatives during the review by Buyer of, and the resolution of any objections with respect to, the Estimated Purchase Price Calculation. At the Closing, Buyer shall pay, or shall cause the Company to pay, in cash by wire transfer of immediately available funds, the Estimated Purchase Price as follows:
(i) [***] of cash (such amount, the Escrow Amount) shall be deposited into an escrow account (the Escrow Account), which shall be established pursuant to an escrow agreement (the Escrow Agreement), which Escrow Agreement shall be (x) entered into on the Closing Date by and among Seller, Buyer and Wilmington Trust, N.A. (the Escrow Agent) as security for the Sellers obligations pursuant to Section 2.4(c) and (y) substantially in the form of Exhibit C attached hereto;
(ii) on behalf of Seller and the Group Companies, an amount in cash equal to (x) the portion of the Closing Date Indebtedness that is Funded Indebtedness and (y) the Unpaid Seller Expenses, each in accordance with the Debt Payoff Letters, invoices or other documents evidencing such amounts delivered to Buyer at least one Business Day prior to the Closing Date; provided that all Taxes shall be paid at the times and in the manner prescribed by applicable law; and
(iii) to Seller, an amount equal to (A) the Estimated Purchase Price, minus (B) the Escrow Amount.
(b) Determination of the Final Purchase Price.
(i) As soon as practicable, but no later than [***] after the Closing Date, Buyer shall prepare and deliver to Seller, Buyers good faith (A) proposed calculation of the Net Working Capital (and the related Net Working Capital Adjustment, if any), (B) proposed calculation of the amount of Cash and Cash Equivalents, (C) proposed calculation of the amount of Closing Date Indebtedness, (D) proposed calculation of the amount of Unpaid Seller Expenses, and (E) proposed calculation of the Purchase Price, and, in each case, the components thereof and in a manner consistent with the definitions thereof. The proposed calculations described in the previous sentence shall collectively be referred to herein from time to time as the Proposed Closing Date Calculations. Buyer agrees to prepare the Proposed Closing Date Calculations in a manner consistent with the Accounting Principles. If Buyer fails to timely deliver any of the Proposed Closing Date Calculations in accordance with the foregoing, then, at the election of Seller in its sole discretion, either (i) the Actual Adjustment shall be deemed to equal zero or (ii) Seller may retain an independent accounting firm of national reputation to provide an audit or other review of the Group Companies books, review the calculation of the Estimated Purchase Price and make any adjustments necessary thereto consistent with the provisions of this Section 2.4(b), the determination of such accounting firm being conclusive and binding on the Parties; provided, however, that Seller reserves any and all other rights granted to it in this Agreement. The associated engagement fees for such independent accounting firm retained by Seller shall initially be borne by Buyer; provided that such fees shall ultimately be borne by Seller and Buyer in the same proportion as the aggregate amount of the disputed items that is unsuccessfully disputed by each such Party (as determined by the independent accounting firm) bears to the total amount of the disputed items submitted to the independent accounting firm. Except as provided in the preceding sentence, all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the independent accounting firm shall be borne by the Party incurring such cost and expense.
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(ii) Seller shall have [***] following receipt of the Proposed Closing Date Calculations to review such calculations (the Review Period). Seller may, on or prior to the last day of the Review Period, give to Buyer written notice of dispute, setting forth in reasonable detail with back-up calculations its objections to Buyers calculation of the Proposed Closing Date Calculations or any portion thereof (a Purchase Price Dispute Notice). Unless Seller delivers a Purchase Price Dispute Notice to Buyer on or before the last day of the Review Period, Seller and the other Parties agree that the Proposed Closing Date Calculations shall be deemed to set forth the final Net Working Capital (and the related Net Working Capital Adjustment, if any), Cash and Cash Equivalents, Closing Date Indebtedness, Unpaid Seller Expenses, and the Purchase Price, in each case, for all purposes hereunder (including the determination of the Actual Adjustment). Prior to the end of the Review Period, Seller may accept the Proposed Closing Date Calculations by delivering written notice to that effect to Buyer, in which case the Purchase Price will be finally determined when such notice is given. If Seller gives a Purchase Price Dispute Notice to Buyer on or prior to the last day of the Review Period, Buyer and Seller shall use commercially reasonable efforts to resolve any disputes set forth in the Purchase Price Dispute Notice in good faith during the [***] commencing on the date Buyer receives the applicable Purchase Price Dispute Notice from Seller. If Seller and Buyer do not agree upon a final resolution with respect to any disputed items set forth in the Purchase Price Dispute Notice within such [***] then the remaining items in dispute may be submitted promptly by Buyer and Seller to an independent accounting firm of national reputation mutually acceptable to Buyer and Seller (the Accounting Firm). The Accounting Firm shall be requested to render a written determination of the applicable dispute (acting as an expert and not as an arbitrator) within [***] after referral of the matter to such Accounting Firm, which determination must be in writing and must set forth, in reasonable detail, the basis therefor and must be based solely on (i) the definitions and other applicable provisions of this Agreement, (ii) a single presentation (which presentations shall be limited to the remaining items in dispute set forth in the Proposed Closing Date Calculations and Purchase Price Dispute Notice) submitted by each of Buyer and Seller to the Accounting Firm within [***] after the engagement thereof (which the Accounting Firm shall forward to the other Party) and (iii) one written response submitted to the Accounting Firm within [***] after receipt of each such presentation (which each Party shall forward to the other Party), and not on independent review, which such determination shall be conclusive and binding on Buyer and Seller. Other than as set forth above or as otherwise agreed by the Parties, the Buyer and Seller shall not engage in discussions with, or provide any materials or information to, the Accounting Firm during the determination of the dispute. The terms of appointment and engagement of the Accounting Firm shall be as reasonably agreed upon between Seller and Buyer, and any associated engagement fees shall initially be [***]; provided that such fees shall ultimately be borne by Seller and Buyer in the same proportion as the aggregate amount of the disputed items that is unsuccessfully disputed by each such Party (as determined by the Accounting Firm) bears to the total amount of the disputed items submitted to the Accounting Firm. Except as provided in the preceding sentence, all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Accounting Firm shall be borne by the Party incurring such cost and expense. The Accounting Firm shall only resolve any disputed items, and not any
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items that are not set forth in the Purchase Price Dispute Notice, and shall resolve each disputed item by choosing a value not in excess of, nor less than, the greatest or lowest value, respectively, set forth in the presentations (and, if applicable, the responses) delivered to the Accounting Firm pursuant to this Section 2.4(b)(ii) (which, for the avoidance of doubt, shall not be in excess of, nor less than, the items set forth in the Proposed Closing Date Calculations and Purchase Price Dispute Notice). Such determination of the Accounting Firm shall be conclusive and binding upon the Parties absent Fraud or manifest error. The Proposed Closing Date Calculations shall be revised as appropriate to reflect the resolution of any objections thereto pursuant to this Section 2.4(b)(ii), and, as so revised, such Proposed Closing Date Calculations shall be deemed to set forth the final Net Working Capital (and the related Net Working Capital Adjustment, if any), Cash and Cash Equivalents, Closing Date Indebtedness, Unpaid Seller Expenses, and Purchase Price, in each case, for all purposes hereunder (including the determination of the Actual Adjustment).
(iii) Buyer shall, and shall cause each Group Company to, in a manner so as to not interfere with the normal business operations of any Group Company, reasonably promptly after a written request of the Seller, make those portions of the Group Companys financial records, supporting documents and work papers and relevant personnel, in each case, that or who are reasonably necessary for Sellers review of the Proposed Closing Date Calculations, reasonably available to Seller and its accountants and other representatives (including the Accounting Firm) at reasonable times during business hours during the review by Seller of, and the resolution of any objections with respect to, the Proposed Closing Date Calculations; provided that in no event shall Buyer or any Group Company be required to provide any documents or other information covered by attorney-client privilege, the attorney work product doctrine or other similar protection absent the implementation of appropriate protections to preserve privilege over such documents or information.
(iv) Buyer and Seller agree that the procedures set forth in this Section 2.4 for resolving disputes with respect to the Proposed Closing Date Calculations shall be the sole and exclusive method for resolving any such disputes; provided, that this provision shall not prohibit either Party from instituting litigation to enforce any final determination of the Purchase Price by the Accounting Firm pursuant to Section 2.4(b)(ii) in any court of competent jurisdiction in accordance with Section 10.12. Except in the case of Fraud or manifest error, the substance of the Accounting Firms determination shall not be subject to review or appeal. It is the intent of the Parties to have any final determination of the Purchase Price by the Accounting Firm proceed in an expeditious manner; however, any deadline or time period contained herein may be extended or modified by the written agreement of the Parties and the Parties agree that the failure of the Accounting Firm to strictly conform to any deadline or time period contained herein shall not be a basis for seeking to overturn any determination rendered by the Accounting Firm which otherwise is rendered in compliance with the terms of this Section 2.4.
(c) Adjustment to Estimated Purchase Price.
(i) If the Actual Adjustment is a positive amount, Buyer shall pay, or shall cause the Company to pay, to Seller an amount equal to such positive amount; provided, that such positive amount shall in no event exceed the value of the Escrow Amount. Such amount shall be paid by Buyer by wire transfer of immediately available funds, in each case, within [***] after the date on which the Purchase Price is finally determined pursuant to Section 2.4(b) above. In the event that the full amount (if any) by which the absolute value of the Actual Adjustment is greater than the value of the Escrow Amount, Seller shall have no recourse against the Buyer or any other Person for such excess.
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(ii) If the Actual Adjustment is a negative amount, then within [***] after the date on which the Purchase Price is finally determined pursuant to Section 2.4(b), the Parties shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent (A) to deliver to the Company an amount equal to the absolute value of such negative amount from the Escrow Funds and (B) if the absolute value of such negative amount is less than the Escrow Funds, to deliver the remaining portion of the Escrow Funds to Seller following the distribution in clause (A). In the event that the full amount (if any) by which the absolute value of the Actual Adjustment is greater than the amount of available Escrow Funds, Buyer shall have no recourse against the Seller or any other Person for such excess.
(iii) Any amounts which become payable pursuant to this Section 2.4(c) will constitute an adjustment to the Purchase Price for all purposes hereunder to the extent permitted by Law.
(iv) After the determination of the Actual Adjustment, Buyer shall pay, or shall cause the Company to pay, to Seller any amounts under the Transaction Bonuses that have not been earned pursuant to the terms thereof, by wire transfer of immediately available funds within [***] after the date on which the Purchase Price is finally determined pursuant to Section 2.4(b).
Section 2.5 Withholding. Solely to the extent required by applicable law, the Buyer, the Group Companies or any applicable withholding agent may deduct and withhold any Tax from any amounts payable pursuant to this Agreement, which Tax amount shall promptly be paid over to the applicable Governmental Entity; provided, however, that, before making any such deduction or withholding that is not attributable to (x) amounts in the nature of compensation for services or (y) the failure of any person to timely provide a valid IRS Form W-8 or W-9 upon reasonable request, or the failure of the Company to timely provide the certificate described in Section 6.12(a), the applicable payor shall use commercially reasonable efforts to provide Seller with a written notice of the intention to make such deduction or withholding at least five (5) Business Days prior to such payment indicating the amount to be withheld or deducted with respect to each Person from which any amount is to be withheld or deducted (and the reason for such withholding or deduction), and such applicable payor shall use commercially reasonable efforts to provide Seller with a reasonable opportunity (and reasonably cooperate with Seller) to eliminate or minimize any such Taxes. To the extent any amounts are so withheld and are timely remitted to the applicable Governmental Entity, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as of the date hereof and as of the Closing, as follows:
Section 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Subsidiary of the Company is a corporation, partnership, limited liability company or other business entity, as the case may be, duly organized, validly existing and in good standing (or the equivalent thereof) under the laws of its respective jurisdiction of formation, except where the failure to be so organized, validly existing and in good standing (or the equivalent thereof) would not have a Company Material Adverse Effect. Each Group Company has the requisite corporate, partnership, limited liability company or other applicable power and authority to own, lease and operate its material assets and properties and to carry on its businesses as presently conducted, except where the failure to have such power or authority would not have a Company Material Adverse Effect.
(b) Except as set forth on Schedule 3.1(b), each Group Company is duly qualified or licensed to transact business and is in good standing (or the equivalent thereof) in each jurisdiction in which the assets and property owned, leased or operated by it, or the nature of the business conducted by it, makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing would not be, and would not be reasonably expected to be, material to any Group Company or the operation of the Business.
(c) The Company has made available to Buyer prior to the date hereof a true, complete and correct copy of each Governing Document of each Group Company, in each case, as in effect as of the date hereof.
Section 3.2 Capitalization of the Group Companies.
(a) The authorized capitalization of the Company consists of a membership interest in the Company (the Units), one hundred percent of which is held of record and beneficially by Seller. The Units comprise all of the Companys authorized equity interests that are issued and outstanding, which Units are held beneficially and of record by Seller. The Units have been duly authorized and validly issued and fully paid and nonassessable. Except for the Units, there are no outstanding (i) equity securities of the Company, (ii) securities of the Company convertible into or exchangeable for, at any time, or agreements or understandings with respect to, any equity securities of the Company, (iii) options, warrants, calls, subscriptions, purchase rights, subscription rights, restricted shares, phantom equity, profit participation rights, stock appreciation rights, preemptive rights, rights of first refusal or first offer, equity-based compensation or other rights, agreements or commitments obligating the Company to issue, transfer, redeem, purchase, return or sell any equity securities or giving any Person any benefit or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of the Company, including any participant right in the revenue or profits of the Company or requiring any payment based upon the value of any equity security, (iv) rights to acquire from the Company and no obligations of
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the Company to issue, purchase, redeem or otherwise acquire, or make any payments based on the value of, any equity securities or securities convertible into or exchangeable for equity securities of the Company, and (v) Liens, proxies, voting trusts, or voting agreements with respect to the sale, issuance or voting of any equity interests (whether outstanding or issuable upon the conversion, exchange or exercise of outstanding equity interests) of the Company. There are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any matter on which equityholders of any Group Company may vote. The Units have not been issued in violation of, and are not subject to, any preemptive, subscription or similar rights under any provision of Law, the Governing Documents of the Company, any contract, agreement or instrument to which any Group Company is subject, bound or a party thereto. Except as set forth on Schedule 3.2(a) or Schedule 3.10(a), the Company does not have any equity incentive plan. The Purchase Price paid to Seller shall be paid by Seller to all direct and indirect equityholders of Seller in accordance with applicable Governing Documents and Employee Plans.
(b) Except as set forth on Schedule 3.2(b), no Group Company directly or indirectly owns any equity, debt or similar interest in, or any interest convertible into or exchangeable or exercisable for, at any time, any equity or similar interest in, or control, directly or indirectly, any corporation, partnership, limited liability company, joint venture or other Person, business association or entity. Schedule 3.2(b) sets forth the name, owner, jurisdiction of formation or organization (as applicable) and percentages of outstanding equity securities owned, directly or indirectly, by the Company and each of its Subsidiaries, with respect to each Person of which any Group Company owns, directly or indirectly, equity, debt or similar interests in, or any interest convertible into or exchangeable for, at any time, any equity interest. Except as set forth on Schedule 3.2(b) or as set forth in its Governing Documents, all outstanding equity securities of each Subsidiary of the Company have been duly authorized and validly issued, are, to the extent applicable, fully paid and non-assessable, are free and clear of any Liens (other than Liens arising under applicable securities laws) and are owned, beneficially and of record, by another Group Company. Except as set forth on Schedule 3.2(b), there are no authorized or outstanding (i) equity securities of any Subsidiary of the Company, (ii) securities of any Subsidiary of the Company or subscriptions, preemptive rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, at any time, or agreements or understandings with respect to any equity interests of any Subsidiary of the Company, (iii) rights to acquire from any Subsidiary of the Company, and no obligation of any Subsidiary of the Company to issue, purchase, redeem or otherwise acquire, or make any payments based on the value of, any equity securities or securities convertible into or exchangeable for, at any time, equity securities of any Subsidiary of the Company, (iv) Liens, proxies, voting trusts, or voting agreements with respect to the sale, issuance or voting of any equity interests (whether outstanding or issuable upon the conversion, exchange or exercise of outstanding equity interests) of any Subsidiary of the Company, and (v) stock appreciation, phantom stock, profit participation or other similar rights with respect to capital stock of, or other equity or voting interests in, the Company or any Subsidiary of the Company; and whether or not in the case of clauses (ii) or (iv) above, pursuant to any applicable law (other than any limitations or restrictions on transferability under any federal or state securities or blue sky laws), any Governing Document of any Subsidiary of the Company or any contract to which any Subsidiary of the Company are party.
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(c) Upon delivery to Buyer at the Closing of the Units, good and valid title to the Units will pass to Buyer, free and clear of all Liens (other than Liens pursuant to applicable securities laws).
Section 3.3 Authority. The Company has the requisite limited liability company power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each Transaction Document to which it is a party and the consummation of the transactions contemplated thereby have been duly authorized by all necessary limited liability company action on the part of the Company, and no other actions on the part of the Company or any Group Company are or will be necessary. Each Transaction Document to which it is a party has been (and the execution and delivery of each Transaction Document to which the Company will be a party prior to Closing will be) duly executed and delivered by the Company and constitutes a valid, legal and binding agreement of the Company (assuming that each such Transaction Document has been duly and validly authorized, executed and delivered by the other parties thereto), enforceable against the Company in accordance with its terms, subject to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors rights generally and subject, as to enforceability, to general principles of equity. All corporate acts and other proceedings necessary or required to be taken by any Group Company to authorize the execution, delivery and performance of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have been duly and properly taken.
Section 3.4 Financial Statements.
(a) Attached hereto as Schedule 3.4 are true, complete and correct copies of the following financial statements (such financial statements, collectively, the Financial Statements):
(i) the audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2020 and December 31, 2019, and the related audited statements of income and cash flows for the respective periods then ended; and
(ii) the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as of the Latest Balance Sheet Date (the Latest Balance Sheet) and the related unaudited consolidated statements of income and cash flows for the four-month period then ended (collectively, the Unaudited Financial Statements).
(b) Except as set forth on Schedule 3.4, the Financial Statements (x) have been prepared from the books and records of the Company and in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, except as may be indicated in the notes thereto and except, in the case of Unaudited Financial Statements, for the absence of footnotes and subject to year-end adjustments, and (y) fairly present, in all material respects, the consolidated financial position of the Group Companies as of the dates thereof and their consolidated results of operations for the periods then ended (subject, in the case of the Unaudited Financial Statements, to the absence of footnotes and to normal year-end adjustments, none of which adjustments, footnotes or other presentations would be material individually or in the aggregate). The books
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and records of the Company and its Subsidiaries are true, complete and correct and have been maintained in accordance with sound business practices. All of the accounts receivable reflected in the Financial Statements represent bona fide transactions of the Company and its Subsidiaries that arose in the ordinary course of business, are not subject to setoffs or counterclaims and are current and collectible within 90 days of the date such account receivable was first booked (provided, that it is understood that this representation is not a guarantee of collectability of such accounts receivable). No Person has any Lien (other than Permitted Liens) on any account receivable that is outstanding, and, except in the ordinary course of business, no request or agreement for material deduction or material discount has been made with respect to any material account receivable. Neither the Company nor its Subsidiaries have received written notice from any customer or partner that such customer or partner does not intend to pay any material account receivable.
(c) Except as set forth in Schedule 3.4(c), the Group Companies maintain systems of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with managements general or specific authorization, (ii) transactions are recorded as necessary to permit the preparation of Financial Statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with managements general or specific authorization, and (iv) the recorded accountability for assets is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences.
(d) Neither the Company nor its Subsidiaries have, at any time, (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against it, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of its assets, (iv) admitted in writing its inability to pay its debts as they become due, or (v) been convicted of, or pleaded guilty or no contest to, any felony. Neither the Company nor its Subsidiaries are insolvent.
(e) Schedule 3.4(e) sets forth a true and complete description of all material actions taken by any Group Company outside of the ordinary course in response to COVID-19 prior to the date hereof (all such items, the COVID-19 Measures ).
Section 3.5 Consents and Approvals; No Violations. Except as set forth on Schedule 3.5, assuming the truth and accuracy of the representations and warranties of Buyer set forth in Section 5.3, no notice to, filing with, or authorization, consent or approval of any Governmental Entity is necessary for the execution, delivery or performance of this Agreement or any other Transaction Document by any Group Company or the consummation by any Group Company of the transactions contemplated hereby, except for (i) compliance with and filings under the HSR Act and (ii) those the failure of which to obtain or make would not, and would not reasonably be expected to, impair, delay or adversely affect the ability of the Company or Seller to enter into and perform its obligations under this Agreement and the other Transaction Documents or be material to any Group Company or the operation of the Business. Neither the execution, delivery and performance by the Company of any Transaction Document to which it is a party nor the consummation by the Company of the transactions contemplated thereby will (a) conflict with or result in any breach of any provision of the Governing Documents of any Group
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Company, (b) except as set forth on Schedule 3.5, result in a violation or breach of, or cause acceleration, result in any loss of rights or additional obligations under, require a consent under, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material contract, Material Permit or Material Lease to which any Group Company is a party, (c) violate any Order of any Governmental Entity having jurisdiction over any Group Company or any of their respective material properties or assets, (d) except with respect to Permitted Liens, result in the creation of any Lien upon any of the material assets of any Group Company, or (e) give rise to any payment or compensation to any Person, including any employee or other service provider to the Group Companies, which in the case of any of clause (b) above, individually or in the aggregate, would have a Company Material Adverse Effect.
Section 3.6 Material Contracts.
(a) Except for any Employee Benefit Plans, and except for agreements entered into by any Group Company after the date hereof in accordance with Section 6.1, no Group Company is party to any:
(i) note, indenture, other evidence of indebtedness, loan, credit or financing agreement or other contract relating to the borrowing of money or to mortgaging, pledging or otherwise placing a material Lien on any material portion of the assets of the Group Companies, including the Credit Facilities;
(ii) contract whereby any Group Company has guaranteed or otherwise agreed to cause, insure or become liable or indemnify for, or pledged any of its assets to secure, the performance or payment of, any obligation or other liability of any Person;
(iii) lease or contract under which it is lessee, or holds or operates or controls any personal property owned by any other party, for which the annual rent exceeds [***] (excluding the Material Leases);
(iv) lease or contract under which it is lessor of or permits any third party to hold or operate any personal property for which the annual rental exceeds [***] (excluding the Material Leases);
(v) Material Leases;
(vi) contract or group of related contracts with the same party for the purchase of products or services that provide for annual payments by a Group Company in [***];
(vii) contracts relating to any pending or completed acquisition, sale, divestiture merger, business combination or similar transaction involving any Group Company in excess of [***] under which there are any ongoing obligations;
(viii) license or royalty agreement relating to the use of any material third party Intellectual Property Rights, other than (A) licenses of commercially available Software that provide for annual payments by a Group Company less than [***], and (B) non-disclosure agreements entered into in the ordinary course of business;
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(ix) licenses of material Company Intellectual Property Rights granted to a third party, other than non-exclusive licenses granted to customers of a Group Company in the ordinary course of business, and any other contracts that affect a Group Companys use of, rights in or ability to enforce any material Company Intellectual Property Rights (including co-existence agreements or covenants not to sue);
(x) contracts related to the development of material Company Intellectual Property Rights by third parties, other than employees, consultants and contractors engaged by a Group Company in the ordinary course of business;
(xi) other than purchase and sale orders received by the Group Companies in the ordinary course of business, any contracts with any customer that provide for annual payments in excess of [***];
(xii) any marketing, resale, referral, or partnership contract involving annual payments to or from the Company and its Subsidiaries in excess of [***];
(xiii) contracts (A) including covenants by any Group Company not to compete or conduct business in a product line or lines of business, or operate in any geographic territory, or otherwise limiting in any material respect the freedom of a Group Company to compete or conduct business, (B) requiring the purchase of all or substantially all of the Companys or its Subsidiaries requirements of a particular product or service from a supplier, (C) containing any provision with respect to exclusivity in favor of a third party, (D) granting to any Person a right of first refusal or right of first offer on the sale of any part of the business of any Group Company or the Business, and (E) containing covenants that limit or purport to limit the ability of any Group Company to hire or solicit Persons for employment or incur or guarantee any Indebtedness or to grant a Lien on the assets of any Group Company, including, in each case, any nondisclosure, non-competition, settlement, coexistence, standstill or confidentiality agreement;
(xiv) contracts that provide any customer of the Company or its Subsidiaries or any other Person with pricing, discounts or benefits that change based on the pricing, discounts or benefits offered to other customers or other Persons, including, agreements containing most favored nation provisions or similar provisions;
(xv) contracts involving the settlement, conciliation or similar agreement of any Proceeding (A) with respect to which any Group Company owes any material unpaid amount or has any other material outstanding obligation or (B) which is with any Governmental Entity;
(xvi) contracts with a Governmental Entity (including any contracts providing for the provision of goods or services by any Group Company to a Governmental Entity);
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(xvii) any contract under which any Group Company is, or may become, obligated to incur any severance, retention or other compensation obligations that could become payable by reason of any Transaction Document or the transactions contemplated hereby or thereby;
(xviii) each joint venture, partnership, material strategic alliance or similar contract or other contract involving the sharing of profits, losses, costs or liabilities with any Person;
(xix) contract with (A) each Top Customer and (B) each Top Supplier;
(xx) contract that obligates any Group Company to provide indemnification or a guarantee that could result in payments in excess of [***];
(xxi) contract relating to capital expenditures and involving future payments by any Group Company in excess of [***];
(xxii) any Affiliate Agreement;
(xxiii) all powers of attorney, other than powers of attorney that are no longer in force;
(xxiv) contract that is otherwise material to the business of any Group Company; or
(xxv) agreements, understandings or commitments to enter into any contract of the type described in clauses (i) through (xxiv) of this Section 3.6(a) (excluding any quotes provided by the Company or any of its Subsidiaries to their respective customers in the ordinary course of business).
(b) The Buyer either has been supplied with, or has been given access to, a true, complete and correct copy of all written contracts, and true, complete and correct (in all material respects) written summaries of all oral contracts, in each case that are required to be referred to on Section 3.6(a) (collectively, the Material Contracts).
(c) No Group Company has, in any material respect, violated or breached, or committed any default under, any Material Contract. Except as would not be material to the Group Companies, taken as a whole, each Material Contract is (i) in full force and effect and enforceable against the Group Company party thereto, and, to the Companys Knowledge, the other parties thereto, and (ii) represent the valid and binding obligations of the applicable Group Company party thereto, and, to the Companys Knowledge, represent the valid and binding obligations of the other parties thereto. To the Companys Knowledge, no other Person has materially violated or breached, or committed any material default under, any Material Contract. No event has occurred and is continuing through any Group Companys actions or inactions that, to the Companys Knowledge, will, or is reasonably likely to, result in a material violation or breach of any of the provisions of any Material Contract.
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Section 3.7 Absence of Changes.
(a) During the period beginning on the Latest Balance Sheet Date and ending on the date of this Agreement, a Company Material Adverse Effect has not occurred or existed.
(b) Except as set forth on Schedule 3.7, during the period beginning on the Latest Balance Sheet Date and ending on the date of this Agreement, none of the Group Companies has:
(i) effected any recapitalization, reclassification, distribution, equity split or combination or like change in its capitalization or reincorporated or changed its form of legal entity;
(ii) subjected any of its properties or assets to any Lien, except for Permitted Liens;
(iii) sold, assigned or transferred any assets with a [***], except in the ordinary course of business or sales of obsolete assets or assets with de minimis or no book value;
(iv) sold, licensed, assigned, transferred, abandoned, allowed to lapse or otherwise disposed of any Company Intellectual Property Rights, except for non-exclusive licenses granted in the ordinary course of business;
(v) made any capital investment in, any capital expenditure or any loan to, any other Person, in excess of [***];
(vi) amended or authorized the amendment of its Governing Documents;
(vii) suffered any material damage, destruction or other casualty loss with respect to property owned by any Group Company that is not covered by insurance;
(viii) entered into, amended or terminated any contract that is or would constitute a Material Contract (other than purchase and sale orders received by the Group Companies or add-on items for new customers, discounts on sale orders and other standard adjustments to Material Contracts in the ordinary course of business, in each case, as further described on Schedule 3.7);
(ix) declared or paid any dividends or distributions or repurchased or redeemed any shares of capital stock or other equity interests;
(x) incurred any indebtedness that is not Funded Indebtedness or issued any long-term debt securities or assumed, guaranteed or endorsed such obligations of any other Person or any indebtedness that is not Funded Indebtedness, except for accounts payable incurred in the ordinary course of business and indebtedness incurred in the ordinary course of business pursuant to the Credit Facilities;
(xi) incurred any Funded Indebtedness in excess of [***];
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(xii) merged into, consolidated with, or sold any material assets or a substantial part of its assets to any other Person, made any acquisition of any capital stock or assets or business of any other Person (whether by merger, stock or asset purchase or otherwise), or permitted any other Person to be merged or consolidated with it;
(xiii) merged into or consolidated with any other Person, made any acquisition of any capital stock or business of any other Person (whether by merger, stock or asset purchase or otherwise), or permitted any other Person to be merged or consolidated with it;
(xiv) settled any Proceeding pending or threatened against the Company or any of its Subsidiaries (A) in excess of [***] (B) that resulted in any limitation on the conduct of the businesses of any of the Group Companies or any of their Affiliates or (C) pursuant to which the Company or any Subsidiary is subject to an injunction, specific performance or other equitable remedy;
(xv) implemented any layoffs, place any employees on unpaid leave or furlough, or materially reduce the hours or weekly pay of any employees;
(xvi) negotiated, entered into, amended or extended any collective bargaining agreement or other contractual obligation with a Union;
(xvii) except as otherwise required by law or by the terms of any existing Employee Benefit Plan set forth on Schedule 3.10(a) or in the ordinary course of business: (A) increased the compensation or benefits to be provided to any director, manager, officer, employee, individual independent contractor or other individual service provider (other than any increase adopted in the ordinary course of business in respect of the compensation of any non-officer employee whose annual base compensation does not exceed [***] after giving effect to such increase) or taken any action with respect to the grant of any severance or termination pay; (B) hired, engaged, or terminated (other than a termination for cause) the employment or engagement of any employee, director, manager, officer, individual independent contractor or other individual service provider with annual base compensation in excess of [***] or (C) established, adopted, entered into or amended any Employee Benefit Plan or any individual employment, individual consulting, retention, change in control bonus or severance agreement, in any case, in any material respect, or accelerated the time of payment, vesting or funding of any compensation or benefits under any Employee Benefit Plan (including any plan or arrangement that would be an Employee Benefit Plan if it was in effect on the date hereof) or otherwise; or
(xviii) entered into any agreement, understanding or contract to do any of the things described in Section 3.7; provided that Buyer acknowledges that the announcement by the Seller of its entry into this Agreement (as well as the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby) does not and will not constitute a breach of this Section 3.7 in and of itself.
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(c) No Group Company has any liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, except for (a) liabilities accrued or specifically reserved against in the date of the Latest Balance Sheet in the amount set forth therein, and (b) liabilities incurred in the ordinary course of business since the Latest Balance Sheet (none of which is a liability for breach of contract, tort, infringement, claim, lawsuit or Law) which are not, individually or in the aggregate, and would not reasonably be expected to be, material in amount.
Section 3.8 Litigation. Except as set forth on Schedule 3.8, there is no suit, litigation, arbitration, action, alternative dispute resolution procedure, administrative charge, mediation, investigation, claim, hearing, audit, inquiry, examination, investigation or other proceeding (each a Proceeding) pending or, to the Companys Knowledge, threatened (in writing) against any Group Company by or before any Governmental Entity which is, or would reasonably be expected to, (i) be material to the Group Companies or the Business or (ii) result in the granting of any injunction or other equitable relief to which any Group Company would be bound or subject. Except as set forth on Schedule 3.8, no Group Company is subject to any outstanding Order.
Section 3.9 Compliance with Applicable Law.
(a) Except as set forth on Schedule 3.9, the Group Companies hold all permits, licenses, approvals, certificates and other authorizations of and from all, and have made all declarations and filings with, Governmental Entities necessary for the lawful conduct of their respective businesses as presently conducted (each permit, license, approval, certificate or other authorization required to be listed on Schedule 3.9, a Material Permit), and all such Material Permits are in full force and effect, except where the failure to hold such Material Permits or of such Material Permits to be in full force in effect would not have a Company Material Adverse Effect. Since January 1, 2018, (x) no material violations have been recorded in respect of any Material Permit and (y) neither the Company nor any of its Subsidiaries have received written notice relating to the revocation or modification of any Material Permits or alleging that it is not or may not be in material compliance with, or has, or may have any, material liability under any Material Permits. No Proceeding is pending or, to the Companys Knowledge, threatened to revoke or limit any Material Permit, nor has any such Proceeding been pending at any time since January 1, 2018. Neither the Company nor any of its Subsidiaries or their respective properties or assets, or to the Companys Knowledge, neither the Company nor any of its Subsidiaries directors, officers or employees (solely in their capacities as such), are currently, nor have any such Persons been at any time since January 1, 2018, subject to any (i) material Orders or (ii) any Orders that would reasonably be expected to materially impair the Company or its Subsidiaries ability to operate its business as presently conducted. The business of the Group Companies is operated in compliance with all applicable Laws and Orders, except for instances of noncompliance that are not, and would not reasonably be expected to be, material to the Business or any Group Company. Except as set forth on Schedule 3.9, since January 1, 2018, neither the Company nor its Subsidiaries have received any written communication from a Governmental Entity that alleges that the Company or its Subsidiaries are not in material compliance with any applicable Laws which has not heretofore been cured or for which there is any remaining liability.
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(b) Since January 1, 2018, no Group Company, nor to the Companys Knowledge, any director, officer, agent, employee or other Person acting on behalf of any Group Company, has in an official capacity, used or authorized the use of any thing of value for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, or made any direct or indirect unlawful payments to government officials or employees, or established or maintained any unlawful or unrecorded funds, in each case, in violation of applicable Law.
(c) Each Group Company (i) is, and since January 1, 2018 has been, in compliance with all applicable Anti-Money Laundering Laws and Global Trade Laws, except for any noncompliance which would not be material to the Group Companies, and (ii) to the Companys Knowledge, is not under investigation by any Governmental Entity with respect to any violation by each Group Company of any applicable Anti-Money Laundering Laws or Global Trade Laws, and, to the Companys Knowledge, no such is pending or threatened.
(d) No Group Company nor, to the Companys Knowledge, any Affiliates, directors, officers, employees and agents of any Group Company, nor any other business entity or enterprise with which any Group Company engaged, affiliated or associated at any time since January 1, 2018 has, directly or indirectly, made, offered, promised or authorized, or caused to be made offered, promised or authorized, any payment, contribution, gift or favor of anything of value, including money, property or services, in contravention of the U.S. Foreign Corrupt Practices Act, as amended from time to time (the FCPA), or any similar other applicable Law prohibiting public or commercial bribery or corruption (collectively, including the FCPA, the Anti-Bribery Legislation), (i) as a kickback, gratuity, or bribe to any Person, including any foreign official as defined in the FCPA or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of any Group Company. Neither any Group Company nor, to the Companys Knowledge, any of the Affiliates, directors, officers, employees and agents of any Group Company (x) is under investigation for any potential violation of the Anti-Bribery Legislation, (y) has received any notice or other communication (in writing or otherwise) from any Governmental Entity regarding any actual, alleged, or potential violation of, or failure to comply with, any Anti-Bribery Legislation or (z) has committed any act that would constitute a violation of the Anti-Bribery Legislation, except in each case for any noncompliance which would not be material to the Group Companies. No Group Company nor any of its officers, directors, employees, agents or other representatives, nor any direct, indirect, or beneficial owners of the foregoing, is or has been a foreign official as defined under the FCPA (including any employee of a state-owned or state- controlled entity, business, or corporation).
Section 3.10 Employee Plans.
(a) Schedule 3.10(a) lists all material Employee Benefit Plans. With respect to each material Employee Benefit Plan, true, complete and correct copies of the following materials have been made available to Buyer, as applicable: (i) the plan document and any amendments thereto (or if unwritten, a written description of all material terms thereof), (ii) the current summary plan description and each summary of material modifications thereto, (iii) the annual report most recently filed with any Governmental Entity (e.g., Form 5500 and all schedules thereto), (iv) the nondiscrimination testing reports or safe harbor notice, as applicable, for each of the last three (3) years, (v) the most recent determination, advisory or opinion letter received from the Internal Revenue Service with respect to any of the Employee Benefit Plans intended to be qualified under Section 401(a) of the Code, and (vi) all material, non-routine notices, filings and correspondence with any Governmental Entity related to such Employee Benefit Plan in the past three (3) years.
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(b) No Employee Benefit Plan is, and none of the Group Companies maintains, contributes to, or is required to contribute to, or has any liability (contingent or otherwise), including on account of an ERISA Affiliate, with respect to, (i) any plan that is subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code, including any Multiemployer Plan, (ii) any multiple employer welfare arrangement, as defined in Section 3(40) of ERISA or (iii) any multiple employer plan, as described in Section 413(c) of the Code. No Group Company has any obligation to provide post-employment health, welfare or life insurance benefits other than as required under Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code or any similar applicable law and for which the covered individual pays the full cost of coverage.
(c) Each Employee Benefit Plan has been established, operated, maintained and administered in all material respects in compliance with its terms, ERISA, the Code and all other applicable Laws. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received, as to its qualification, a favorable determination letter from the Internal Revenue Service or is the subject of a favorable opinion letter from the Internal Revenue Service on the form of such Employee Benefit Plan and, to the Companys Knowledge, there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such Employee Benefit Plan, and each trust created thereunder has been determined by the IRS to be exempt from Tax under the provisions of Section 501(a) of the Code.
(d) There are no pending (or, to the Companys Knowledge threatened) Proceedings with respect to any Employee Benefit Plan other than routine claims for benefits. No Employee Benefit Plan is the subject of a formal examination or audit by a Governmental Entity, is, or within the last six (6) years has been, the subject of an application or filing under, or is a participant in, a government-sponsored amnesty, voluntary compliance, self-correction or similar program.
(e) No Group Company has engaged in any transaction with respect to any Employee Benefit Plan that would be reasonably likely to subject any Group Company to any material Tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable law. There have been no breaches of fiduciary duty with respect to any Employee Benefit Plan that would reasonably be expected to result in any material liability or material excise tax under ERISA or the Code being imposed on any of the Group Companies.
(f) Each Employee Benefit Plan that constitutes in any part a nonqualified deferred compensation plan (as defined in Section 409A of the Code) complies and has complied in all material respects (both in form and in operation) with the requirements of Section 409A of the Code.
(g) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated thereby (whether alone or in conjunction with any other event) could result in (i) the entitlement of any current or former employee, director, manager, officer, individual independent contractor, or other individual service provider of the Group Companies to any compensatory payment, (ii) the acceleration in the time of payment, funding or vesting, or
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increase the amount of compensation (including equity or equity-based compensation) due to any such individual, (iii) any limit or restriction on the right of the Group Companies to merge, amend or terminate any Employee Benefit Plan, (iv) the forgiveness of indebtedness of any current or former employee, director, manager, officer, individual independent contractor, or other individual service provider of the Group Companies, or (v) the payment or provision of any amount or benefit that, individually or in combination with any other payment or benefit, could be characterized as an excess parachute payment within the meaning of Section 280G of the Code (other than the Transaction Bonuses and the other payments provided in the preliminary 280G analysis that was previously provided to the Buyer).
(h) No Group Company has any obligation to gross up or otherwise make whole any current or former employee, director, manager, officer, individual independent contractor, or other individual service provider of the Group Companies with respect to any Tax or interest or penalty related thereto.
Section 3.11 Environmental Matters.
(a) The Group Companies are, and since January 1, 2019 have been, in material compliance with all applicable Environmental Laws. The Group Companies hold and are in material compliance with all material permits, licenses and other authorizations that are required pursuant to Environmental Laws for the lawful conduct of their respective businesses as presently conducted. Except for matters that have been resolved and with respect to which no Group Company has any further obligation, monetary or otherwise, no Group Company has received any written notice of any violation of, or liability or investigatory, corrective or remedial obligation under, any Environmental Laws, and to the Companys Knowledge no such claims or proceedings are threatened. There has been no release by any Group Company, or to the Companys Knowledge, by any other person, of any Hazardous Materials at, on, upon, into or from any real property now or formerly owned, leased or operated by any Group Company, which such release occurred in a manner or to a degree that requires reporting, investigation, remediation or other response by any Group Company pursuant to any Environmental Law or otherwise reasonably could be expected to give rise to material liability for any Group Company under any Environmental Law.
(b) The Company has made available to Buyer true, complete and correct copies of all material assessments, reports, studies, correspondence and other documents relating to the environmental condition of any real property currently or formerly owned or operated by the Company, or to the compliance of the Group Companies with Environmental Law, in each case that are in the Companys possession or reasonable control.
Section 3.12 Intellectual Property.
(a) The Group Companies own, license or otherwise have a right to all Intellectual Property Rights that are used to the conduct of the business of the Group Companies as currently conducted (the Company Intellectual Property Rights), free and clear of all Liens, other than Permitted Liens. Immediately following the Closing, the Group Companies will continue to own, license or otherwise have a right to use all material Company Intellectual Property Rights in substantially the same manner as immediately prior to the Closing. Schedule 3.12(a) sets forth a list of (a) patents, trademark registrations, domain name registrations, and copyright registrations owned by any Group Company and (b) patent applications and trademark applications owned by any Group Company. The Group Companies rights in the Intellectual Property Rights set forth on Schedule 3.12(a) are subsisting, and, to the Companys Knowledge, valid and enforceable.
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(b) Except as set forth on Schedule 3.12(b), (i) there is not pending and has not, since January 1, 2018, been made against any Group Company before any Governmental Entity any claim by any Person contesting the use or ownership of any Company Intellectual Property Rights owned or purported to be owned by such Group Company, or alleging that any Group Company is infringing, misappropriating or conflicts with or has infringed, misappropriated or conflicted with any Intellectual Property Rights of any Person in any material respect, and (ii) there are no claims pending and have not, since January 1, 2018, been any claims before any Governmental Entity that have been brought by any Group Company against any Person alleging infringement or misappropriation of, or conflict with any Company Intellectual Property Rights owned or purported to be owned by such Group Company.
(c) Except as set forth on Schedule 3.12(c), or as would not reasonably be expected to be material to the Business or the Group Companies the operation of the business of the Group Companies, as conducted since January 1, 2018, does not infringe, misappropriate or otherwise conflict with and has not infringed, misappropriated or conflicted with, any Intellectual Property Rights of any third party. Except as would not have a Company Material Adverse Effect, no third party is infringing on, misappropriating, or otherwise conflicting with or has, since January 1, 2018, infringed, misappropriated or conflicted with any material Intellectual Property Rights owned or purported to be owned by any of the Group Companies.
(d) For any Software owned or purported to be owned by a Group Company (Company Software), (i) the Group Companies have in their possession all source code and documentation as reasonably necessary to enable competently skilled programmers and engineers to operate and maintain the Company Software. To the Companys Knowledge, there has been no unauthorized theft, reverse engineering, decompiling, disassembling, or other unauthorized disclosure of or access to the source code for any Company Software. Except as set forth on Schedule 3.12(d), the Group Companies have not disclosed or delivered to any escrow agent or any other Person any of the source code relating to any Company Software, and no other Person has the right, contingent or otherwise, to obtain access to any such source code.
(e) The Group Companies have not used any Open Source Software in a manner that would require the Group Companies to distribute, allow a third party to distribute or access, or otherwise make available any (i) proprietary source code to any downstream recipients or (ii) of the Company Software at no or nominal cost. The Group Companies are in material compliance with their contracts and licenses relating to Open Source Software, including attribution and notice obligations.
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(f) The Group Companies have maintained commercially reasonable practices to protect the confidentiality of their material confidential information and trade secrets and have required all employees and other Persons with access to their material confidential information or trade secrets to execute contracts requiring such Persons to maintain the confidentiality of such information and use such information only for the benefit of the Group Companies. The Group Companies have not materially breached any of their obligations of confidentiality owed to any Person. Since January 1, 2018, each current and former employee and contractor of a Group Company who developed any material Company Intellectual Property Rights owned or purported to be owned by the Group Companies has executed a contract under which such employee or contractor has assigned their rights in such Company Intellectual Property Rights to the Group Companies.
(g) Schedule 3.12(g) sets forth a list of material agreements whereby (i) any of the Group Companies is granted a right or license to the Intellectual Property Rights of any other Person, but excluding any licenses for unmodified, commercially available off-the-shelf Software that is used generally in the Companys operations for which the Company pay a license fee of no more than [***] or (ii) any of the Group Companies grants to any other Person any rights in any Intellectual Property Rights owned by the Group Companies, but excluding non-exclusive licenses granted to the Group Companies customers in the ordinary course of business, or (iii) a Group Companys use of, rights in or ability to enforce any Company Intellectual Property Rights is affected (including co-existence agreements or covenants not to sue).
(h) The Group Companies own or have sufficient rights to use and, immediately following the Closing, will continue to own or have sufficient rights to use all Systems and such Systems are reasonably sufficient for the needs of the Group Companies as currently conducted. Since January 1, 2018, there has been no failure of any System that has caused a material disruption to a Group Company. Since January 1, 2018, the Group Companies maintain, or is provided through a third party vendor, commercially reasonable backup and data recovery, disaster recovery, and business continuity plans and procedures for the Systems. To the Companys Knowledge, the Company Software and Systems do not contain any material virus, malware or other routines or components intentionally designed to permit unauthorized access to, maliciously disable, encrypt, erase or otherwise harm Software, hardware, or data. The Group Companies have not been subject to any license or similar audit in connection with any of the Companys licenses for the Systems, nor received any notice of intent to conduct any such audit.
(i) Since January 1, 2018, the Group Companies collection, Processing and storage of any Personal Information and the conduct of the business of the Group Companies has been in compliance in all material respects with (i) applicable Privacy Laws, (ii) the Group Companies external policies and procedures (including their public-facing online privacy policies), and (iii) any contracts to which any Group Company is bound, relating to privacy, data security and data protection that are binding on the relevant Group Company (collectively Privacy Obligations). The Group Companies maintain policies and procedures regarding privacy and data security standards and has implemented and maintains commercially reasonable safeguards to protect the Personal Information and Sensitive Information stored in the Systems, and to the Companys Knowledge, all third-party service providers, outsourcers, processors or any other third parties Processing Personal Information on behalf of the Group Companies have such measures and materially complies with applicable Privacy Laws when processing Personal Information on behalf of the Group Companies.
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(j) To the Companys Knowledge, except as set forth on Schedule 3.12(g), since January 1, 2018, there have not been any actual Security Breach or other compromise of the privacy, integrity, confidentiality or security of Personal Information that required notification to an affected individual, or a Governmental Entity or any other remedial action under any applicable Privacy Obligation. The Group Companies have not received any written notice of or been subject to any complaints, claims, proceedings, investigations, by any Person or Governmental Entity for any alleged violation of any applicable Privacy Obligation.
Section 3.13 Labor Matters.
(a) Except as disclosed on Schedule 3.13(a), (i) no Group Company is bound by, or a party or otherwise subject to, any collective bargaining agreement or collective bargaining relationship with respect to its employees, and no such contract is being negotiated by any Group Company, (ii) no employee of a Group Company is represented by a Union, (iii) for the past three years, there has not been, nor to the Companys Knowledge, has there been any threat of, any labor strike, slowdown, lockout, picketing, work stoppage or walkout, petition filed or demand made seeking recognition of a bargaining representative, or other material labor activity or dispute against any Group Company, and (iv) to the Companys Knowledge, for the past three years, there has been no, nor any threat of any, union organization campaigns with respect to any employees of any Group Company. For the past three (3) years, no Group Company has engaged in any plant closing or employee mass layoff activities without complying in all material respects with the WARN Act.
(b) Except as disclosed on Schedule 3.13(b), since March 1, 2020, no Group Company has implemented any reductions in force or layoffs affecting ten (10) or more employees, placed ten (10) or more employees on unpaid leave or furlough, or materially reduced the hours or weekly pay of ten (10) or more employees.
(c) The Group Companies are, and for the past three (3) years have been, in material compliance with all applicable laws respecting employment and employment practices and terms and conditions of employment, including wages and hours and the classification and compensation of employees and independent contractors.
(d) True, complete and correct information as to the name or employee ID number, current job title and base salary or wage rate and annual target cash bonus opportunities for all current employees of the Group Companies has been made available to Buyer. No current officer or employee of any Group Company (i) or group of employees of any Group Company, to the Companys Knowledge, has given notice of termination or otherwise disclosed plans to terminate employment with the Company or any of its Subsidiaries within the twelve (12)-month period following the date hereof, (ii) is employed under a non-immigrant work visa or other work authorization that is limited in duration, or (iii) has been the subject of any sexual harassment, sexual assault, or sexual discrimination allegations in relation to his or her employment with any Group Company in the past three (3) years.
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Section 3.14 Insurance. Schedule 3.14 contains a list of all material policies of fire, liability, workers compensation, property, casualty and other forms of insurance (collectively, the Insurance Policies) owned or held by the Group Companies as of the date of this Agreement. The Group Companies have made available to Buyer complete copies of all such Insurance Policies (including, without limitation, copies of all written amendments, supplements, waivers of rights and other modifications). All such Insurance Policies are, as of the date of this Agreement, in full force and effect, all premiums with respect thereto covering all periods up to and including the Closing Date will have been paid, and no notice of cancellation or termination has been received by any Group Company with respect to any such Insurance Policy. Since January 1, 2018, (i) no policy limits of the Insurance Policies have been exhausted or materially eroded or reduced and insurance policies providing substantially similar insurance coverage have been in effect continuously, (ii) no insurer has denied, rejected, questioned or disputed or made any reservation of rights regarding any pending claims, and (iii) no Group Company has failed to give any notice or present any claims under any applicable Insurance Policy in a due and timely fashion. No Group Company or its respective assets and properties are insured in an amount that is less than the amount that is required by applicable Law or by any contract or agreement to which such Group Company is a party. Assets of the Group Companies are insured to full replacement cost value. As if the date of this Agreement, there are no open claims with any insolvent insurance carriers.
Section 3.15 Tax Matters. Except as set forth on Schedule 3.15:
(a) Each Group Company has prepared and duly and timely filed with the appropriate domestic, federal, state, local and foreign taxing authorities all income and other material Tax returns, information returns, statements, forms, filings and reports filed or required to be filed by it (together with any amendments thereof and any attachment thereto filed or required to be filed with a taxing authority with respect to each Group Company, a Tax Return and, collectively, the Tax Returns), and all such Tax Returns were true, complete and correct in all material respects;
(b) each Group Company has timely paid all income and other material Taxes (whether or not shown as due on any Tax Return) owed by it, including material Taxes which any Group Company was obligated to withhold (and each of the Group Companies has complied in all material respects with all associated reporting and record keeping requirements);
(c) no Group Company is currently the subject of a Tax audit, dispute, investigation, claim, proceeding or examination;
(d) no Group Company has consented to extend the time, or is the beneficiary of any extension of time, in each case, beyond the date hereof in which any Tax may be assessed or collected by any taxing authority;
(e) the Company is classified as a C corporation for U.S. federal income tax purposes, and it does not file a consolidated, combined or similar Tax Return with any of its Subsidiaries;
(f) (i) the unpaid Taxes of the Group Companies did not as of the Latest Balance Sheet Date exceed the reserve for Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Latest Balance Sheet (rather than in any notes thereto), and (ii) since the Latest Balance Sheet Date, neither Group Company has incurred any liability for Taxes outside the ordinary course of business except as arising in connection with the transactions contemplated by this Agreement;
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(g) no Group Company has received from any taxing authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other such written notice which has not been resolved or withdrawn;
(h) within the last three (3) years, no written claim has been made by any taxing authority in a jurisdiction where any Group Company does not file Tax Returns that any such Group Company is or may be subject to taxation by that jurisdiction;
(i) there are no Liens for Taxes (other than Liens described in clause (b) of the definition of Permitted Liens) upon any of the assets of any Group Company;
(j) since December 31, 2020, no Group Company has made, changed or revoked any material Tax election, filed any amended Tax Return, consented to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or adopted or changed any Tax accounting method, settled any material audit, assessment, dispute, proceeding or investigation in respect of Taxes, surrendered any material right to claim a Tax refund or entered into any contractual obligation in respect of material Taxes with any governmental entity, except, in each case, for any election, filing, consent, adoption, contractual obligation or settlement that has been made available to Buyer;
(k) none of the Group Companies has ever been a member of an affiliated group within the meaning of Code Section 1504(a) (or similar provision of state, local or non-U.S. Law) filing a consolidated income Tax Return;
(l) none of the Group Companies is a party to or bound by any Tax sharing, allocation or indemnification agreement or obligation, other than any customary agreement or obligation entered into in the ordinary course of business, the primary purpose of which is not related to Taxes;
(m) none of the Group Companies has any liability for the Taxes of any person (other than a Group Company) under Treasury Regulations section 1.1502-6 (or any similar provision of state, local or non-U.S. law), as a transferee or successor, by contract (other than commercial contracts entered into in the ordinary course of business) or otherwise by operation of applicable law;
(n) none of the Group Companies will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of: (i) an adjustment under either Section 481(a) of the Code (or any corresponding or similar provision of state, local or non-U.S. law) by reason of use of an improper method of accounting for a Taxable period (or portion thereof) ending on or prior to the Closing Date or a change in method of accounting made prior to the Closing; (ii) a closing agreement described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign Tax law) executed before the Closing; (iii) an installment sale or open transaction disposition made prior to the Closing; (iv) a prepaid amount received prior to the Closing; (v) any intercompany transaction or excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or foreign Tax law);
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(o) none of the Group Companies has executed any power of attorney with respect to any Tax, other than powers of attorney that are no longer in force;
(p) no closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings relating to Taxes, Tax items or Tax Returns have been entered into or issued by a taxing authority with or in respect of any Group Company;
(q) none of the Group Companies has (a) made any election to defer any payroll Taxes under the CARES Act or (b) taken out any loan, received any loan assistance or received any other financial assistance, or requested any of the foregoing, in each case under the CARES Act, including pursuant to the Paycheck Protection Program or the Economic Injury Disaster Loan Program;
(r) within the past two (2) years, no Group Company has distributed stock or equity of another Person, or has had its stock or equity distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code; and
(s) no Group Company is or has been a party to any listed transaction, as defined in Section 6707A(c)(2) of the Code.
No representation or warranty is made with respect to the availability of any net operating loss, or Tax credit carryforward in any period (or portion thereof) beginning after the Closing Date.
Section 3.16 Brokers. No broker, finder, financial advisor or investment banker, other than AGC Partners (whose fees shall be included as Seller Expenses), is entitled to any brokers, finders, financial advisors or investment bankers fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of the Company. None of the Buyer or any Group Company will have any liability or obligation of any kind to, or will be subject to any claim of, any broker, finder, financial advisor or investment banker in connection with the Transaction Documents and the transactions contemplated hereby and thereby following the consummation of the same, except for those which will be borne by the Seller.
Section 3.17 Real Property; Personal Property.
(a) No Group Company owns any real property. Schedule 3.17 sets forth (whether as lessee or lessor) a list of all leases (each lease required to be listed on Schedule 3.17, a Material Lease) of real property to which any Group Company is a party or by which any of them is bound involving [***]. Except as set forth on Schedule 3.17, each Material Lease is valid and binding on the Group Company party thereto, enforceable in accordance with its terms (subject to proper authorization and execution of such Material Lease by the other party thereto and subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally
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the enforcement of creditors rights and subject to general principles of equity). Except as set forth on Schedule 3.17, each Material Lease is valid and binding on the applicable Group Company and enforceable in accordance with its terms against such Group Company (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors rights and subject to general principles of equity). Except as set forth on Schedule 3.17, during the period beginning on Latest Balance Sheet Date and ending on the date of this Agreement, no Group Company has received written notice of any default under any Material Lease, except for defaults that would not have a Company Material Adverse Effect. Each Group Company has good and valid title to all material tangible assets, including personal property, reflected on the Latest Balance Sheet or thereafter acquired, except those sold or otherwise disposed of since the date of the Latest Balance Sheet in the ordinary course of business and not in violation of this Agreement, in each case free and clear of all Liens, other than Permitted Liens. All tangible personal property used by any Group Company in the operation of its business is in reasonably good condition and repair, subject to reasonable wear and tear considering the age and ordinary course of use of such property.
Section 3.18 Transactions with Affiliates. Schedule 3.18 sets forth all contracts or arrangements (other than employment agreements, equity or incentive equity documents, in each case, entered into in the ordinary course of business, and Governing Documents) between any Group Company, on the one hand, and any Affiliates, officers, directors (or equivalents), equityholders or employees of the Group Companies or a member of the immediate family of the foregoing Persons, on the other hand (each contract or arrangement required to be listed on Schedule 3.18, an Affiliate Agreement). Except as disclosed on Schedule 3.18, none of the Group Companies and their respective Affiliates, directors, officers, equityholders or employees possesses, directly or indirectly, any financial interest in, or is a director, officer or employee of, any Person (other than any Group Company) which is a material client, supplier, customer, lessor, lessee, or competitor of any Group Company; provided, that ownership of five percent (5%) or less of any class of securities of a company whose securities are registered under the Exchange Act, shall not be deemed to be a financial interest for purposes of this Section 3.18.
Section 3.19 Customers and Suppliers.
(a) Schedule 3.19(a) sets forth the names of the ten (10) most significant customers (by revenue) of the Group Companies for calendar years 2019 and 2020 (collectively, the Top Customers) and the amount for which each Top Customer was invoiced during each such period. No Top Customer has ceased, or, to the Companys Knowledge, intends to cease to use, reduce or change in any material respect the terms or conditions under which it uses, the services and products of the Group Companies, or has substantially reduced the use of such services or products at any time during such period.
(b) Schedule 3.19(b) sets forth the names of the ten (10) most significant vendors and suppliers (by fees paid or payable) of the Group Companies for calendar years 2019 and 2020 (collectively, the Top Suppliers) and the amount for which the Group Companies were invoiced during each such period in connection with each such supplier or vendor. No such Top Supplier has ceased, or, to the Companys Knowledge, intends to cease to provide, reduce or change in any material respect the terms or conditions under which it provides, services or products to the Group Companies, or has substantially reduced the provision of such services or products at any time during such period.
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Section 3.20 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 3 AND IN ANY OTHER TRANSACTION DOCUMENTS OR CERTIFICATE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, THE GROUP COMPANIES EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THEIR BUSINESSES OR THEIR ASSETS, AND THE GROUP COMPANIES SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THEIR ASSETS, ANY PART THEREOF, THE WORKMANSHIP THEREOF, AND THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT SUCH SUBJECT ASSETS ARE BEING ACQUIRED AS IS, WHERE IS ON THE CLOSING DATE, AND IN THEIR PRESENT CONDITION. FURTHER, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 3 OR IN ANY OTHER TRANSACTION DOCUMENTS OR CERTIFICATE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, THE GROUP COMPANIES HEREBY EXPRESSLY DISCLAIM ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, LEGAL OR CONTRACTUAL, EXPRESS OR IMPLIED.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the date hereof and as of the Closing, as follows:
Section 4.1 Organization. Seller has been duly formed and is validly existing and in good standing as a limited liability company under the Laws of the State of Delaware and has the power and authority to own its assets and properties and conduct its business as it is now being conducted.
Section 4.2 Authority. Seller has the requisite limited liability company power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each Transaction Document to which Seller is a party and the consummation of the transactions contemplated thereby have been duly authorized by all necessary limited liability company action on the part of Seller, and no other actions on the part of the Seller are or will be necessary. Each Transaction Document to which Seller is a party has been duly executed and delivered by Seller and constitutes a valid, legal and binding agreement of Seller (assuming that each such Transaction Document to which Seller is a party has been duly and validly authorized, executed and delivered by the other parties thereto), enforceable against Seller in accordance with its terms, subject to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors rights generally and subject, as to enforceability, to general principles of equity. All corporate acts and other proceedings required to be taken by the Seller to authorize the execution, delivery and performance of this Agreement and each Transaction Document and the consummation of the transactions contemplated hereby and thereby have been duly and properly taken.
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Section 4.3 Consents and Approvals; No Violations. Except as set forth on Schedule 4.3, assuming the truth and accuracy of the representations and warranties of Buyer set forth in Section 5.3, no notice to, filing with, or authorization, consent or approval of any Governmental Entity is necessary for the execution, delivery or performance of this Agreement by Seller or the consummation by Seller of the transactions contemplated hereby, except for (i) compliance with and filings under the HSR Act, and (ii) those the failure of which to obtain or make would not, and would not reasonably be expected to, impair, delay or adversely affect the ability of the Company or Seller to enter into and perform its obligations under this Agreement and the other Transaction Documents or be material to any Group Company or the operation of the Business. Neither the execution, delivery and performance of each Transaction Document to which Seller is a party nor the consummation by Seller of the transactions contemplated hereby will (a) conflict with or result in any breach of any provision of Sellers Governing Documents, (b) result in a violation or breach of, or cause acceleration, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material agreement to which Seller is a party or (c) violate any Order of any Governmental Entity having jurisdiction over Seller or any of its properties or assets, which in the case of any of clauses (b) and (c) above, would not have a material adverse effect on Sellers ownership of the Units, or otherwise prevent or materially delay the Closing.
Section 4.4 Brokers. No broker, finder, financial advisor or investment banker, other than AGC Partners (whose fees shall be included as Seller Expenses), is entitled to any brokers, finders, financial advisors or investment bankers fee or commission in connection with the transactions contemplated based upon arrangements made by or on behalf of Seller or its Affiliates. None of the Buyer or any Group Company will have any liability or obligation of any kind to, or will be subject to any claim of, any broker, finder, financial advisor or investment banker in connection with the Transaction Documents and the transactions contemplated hereby and thereby following the consummation of the same, other than those which will be borne by the Seller.
Section 4.5 Title to the Units; Ownership of Seller. Seller owns, and at all times from and after the date hereof and until the Closing will own, of record and beneficially all of the Units, and Seller has, and at all times after the date hereof and prior to the Closing, will have, good and marketable title to the Units, free and clear of all Liens (other than under applicable securities laws).
Section 4.6 Litigation. There is no Proceeding pending or, to the Companys Knowledge, threatened against Seller by or before any Governmental Entity relating to, or which otherwise could reasonably be expected to, affect Sellers ownership of the Units, or otherwise prevent or materially delay the Closing. Seller is not subject to any outstanding Order that would have a material adverse effect on Sellers ownership of the Units, or otherwise prevent or materially delay the Closing.
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Section 4.7 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN THIS ARTICLE 4 AND IN ANY OTHER TRANSACTION DOCUMENTS OR CERTIFICATE DELIVERED IN CONNECTION HEREWITH OR THEREWITH ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES. FURTHER, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 4 OR IN ANY OTHER TRANSACTION DOCUMENTS OR CERTIFICATE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, SELLER HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, LEGAL OR CONTRACTUAL, EXPRESS OR IMPLIED.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the date hereof and as of the Closing, as follows:
Section 5.1 Organization. Buyer is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all requisite power and authority to carry on its business as now being conducted, except where the failure to have such power or authority would not prevent or materially delay the consummation of the transactions contemplated hereby.
Section 5.2 Authority. Buyer has all necessary power and authority to execute and deliver each Transaction Document to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each Transaction Document to which Buyer is a party and the consummation of the transactions contemplated thereby have been duly authorized by all necessary action on the part of Buyer, and no other actions on the part of Buyer is necessary to authorize each Transaction Document to which Buyer is a party or to consummate the transactions contemplated thereby. No vote of Buyers equityholders is required to approve this Agreement or for Buyer to consummate the transactions contemplated hereby. Each Transaction Document to which Buyer is a party has been, or will be, as of the Closing, duly and validly executed and delivered by Buyer and constitutes a valid, legal and binding agreement of Buyer (assuming that each such Transaction Document to which Buyer is a party has been duly and validly authorized, executed and delivered by the other parties thereto), enforceable against Buyer in accordance with its terms, subject to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors rights generally and subject, as to enforceability, to general principles of equity.
Section 5.3 Consents and Approvals; No Violations. No notices to, filings with, or authorizations, consents or approvals of any Governmental Entity is necessary for the execution, delivery or performance of any of the Transaction Documents to which Buyer is a party or the consummation by Buyer of the transactions contemplated thereby, except for (i) compliance with and filings under the HSR Act (ii) those set forth on Schedule 5.3 and (iii) those the failure of which to obtain or make would not and would not reasonably be expected to, prevent or materially
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delay the ability of the Buyer to perform its obligations under this Agreement and the other Transaction Agreements or prevent or materially delay the consummation of the transactions contemplated hereby. Neither the execution, delivery and performance of any of the Transaction Documents to which Buyer is a party nor the consummation by Buyer of the transactions contemplated thereby will (a) conflict with or result in any breach of any provision of Buyers Governing Documents, (b) except as set forth in Schedule 5.3, result in a violation or breach of, or cause acceleration, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material agreement to which Buyer is a party or (c) violate any Order of any Governmental Entity having jurisdiction over Buyer or any of its properties or assets, which in the case of any of clauses (b) and (c) above, for violations which would not prevent or materially delay the consummation of the transactions contemplated thereby.
Section 5.4 Brokers. No broker, finder, financial advisor or investment banker other than Centerview Partners LLC is entitled to any brokerage, finders, financial advisors or investment bankers fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of Buyer or its Affiliates for which Seller or any Group Company may become liable. The Seller will not have any liability or obligation of any kind to, or will be subject to any claim of, any broker, finder, financial advisor or investment banker in connection with the Transaction Documents and the transactions contemplated hereby and thereby following the consummation of the same as a result of any contract or arrangement entered into by Buyer.
Section 5.5 Financing. Buyer will have on the Closing Date sufficient cash on hand that is available to consummate the transactions contemplated hereby, including to pay the Purchase Price, any Funded Indebtedness, the Unpaid Seller Expenses and the fees and expenses of Buyer related to the transactions contemplated hereby. The obligations of Buyer under this Agreement are not subject to any conditions regarding the Buyers, its Affiliates or any other Persons ability to obtain any financing for the consummation of the transactions contemplated hereby or the consummation of any De-SPAC Transaction.
Section 5.6 Acquisition of Equity For Investment. Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its purchase of the Units. Buyer confirms that it can bear the economic risk of its investment in the Units and can afford to lose its entire investment in the Units. Buyer is acquiring the Units for investment and not with a view toward or for sale in connection with any distribution thereof, or with any present intention of distributing or selling such Units. Buyer agrees that the Units may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without compliance with applicable United States prospectus and registration requirements, except pursuant to an exemption therefrom under applicable United States securities laws.
Section 5.7 Solvency. Buyer is not entering into the transactions contemplated by this Agreement with the actual intent to hinder, delay or defraud either present or future creditors of the Group Companies. Buyer is Solvent as of the date of this Agreement and, assuming the satisfaction of the condition to Sellers and the Companys obligation to consummate the transactions contemplated hereby, Buyer and each of the Group Companies (on both a stand-alone
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and on a combined basis) will, after giving effect to all of the transactions contemplated by this Agreement, including the payment of the Purchase Price, Funded Indebtedness, Unpaid Seller Expenses, all other amounts required to be paid, borrowed or refinanced in connection with the consummation of the transactions contemplated by this Agreement and all related fees and expenses, be Solvent at and immediately after the Closing.
Section 5.8 Acknowledgment and Representations by Buyer. Subject to Fraud, Buyer acknowledges and agrees that, it (i) has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets, condition, operations and prospects of the Group Companies, and (ii) has been furnished with or given full access to all information about the Group Companies and their respective businesses and operations as Buyer and its representatives and advisors have requested. In entering into this Agreement, Buyer has relied solely upon its own investigation and analysis and the representations and warranties of the Company and Seller set forth in this Agreement, the other Transaction Documents and the certificates and other instruments delivered pursuant hereto and thereto, and Buyer acknowledges that, other than as set forth in this Agreement, the other Transaction Documents, and in the certificates or other instruments delivered pursuant hereto and thereto, none of the Group Companies or any of their respective directors, officers, employees, Affiliates, equityholders, agents or representatives makes or has made any representation or warranty, either express or implied, (a) as to the accuracy or completeness of any of the information provided or made available to Buyer or any of its respective agents, representatives, lenders or Affiliates prior to the execution of this Agreement and (b) with respect to any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of any Group Company heretofore or hereafter delivered to or made available to Buyer or any of its respective agents, representatives, lenders or Affiliates. Nothing contained in this Section 5.8 shall in any manner limit or restrict a claim for Fraud.
ARTICLE 6
COVENANTS
Section 6.1 Conduct of Business of the Company.
(a) Except as contemplated by this Agreement or in Schedule 6.1(a), from and after the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Company shall and shall cause each other Group Company to, except as consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) (i) use its commercially reasonable efforts to operate in the ordinary course of business (including any conduct that is reasonably related, complementary or incidental thereto), it being acknowledged and provided that the Company may determine that it needs to take measures or will sustain impacts on its business as a result of COVID-19 that is outside of the control of the Company or its Affiliates and is outside the ordinary course of business of the Group Companies, and notwithstanding the foregoing, the Company may take all reasonable measures in response to COVID-19 that the Company determines are reasonably necessary to preserve its business or the health and safety of any Group Companys employees if such reasonable measures are consistent with the COVID-19 Measures and prior to taking such action, the Company notifies
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Buyer of such proposed action and consults with Buyer in good faith, (ii) not take or omit to take any action which would have or result in, individually or in the aggregate, a Company Material Adverse Effect, and (iii) use commercially reasonable efforts to preserve substantially intact its business organization and to preserve in all material respects the present commercial relationships with key Persons with whom it does business. Without limiting the generality of the foregoing, except as set forth on Schedule 6.1(a) or as consented to by Buyer in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), from and after the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Company shall not, and the Company shall cause each of the other Group Companies not to:
(i) effect any recapitalization, reclassification, distribution, or combination or like change in its capitalization or incorporation, or change its form of legal entity;
(ii) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of any equity interests or grant any option or issue any warrant to purchase or subscribe for any such securities or issue any securities convertible into such securities;
(iii) subject any portion of its properties or assets to any Lien, except for Permitted Liens or other Liens that will be released prior to Closing;
(iv) sell, assign or transfer any assets with a fair market value [***] except in the ordinary course of business or sales of obsolete assets or assets with de minimis or no book value;
(v) sell, license, assign, transfer, abandon, allow to lapse or otherwise dispose of any Company Intellectual Property Rights, except for non-exclusive licenses granted in the ordinary course of business;
(vi) make any capital investment in, any capital expenditure or any loan to, any other Person, in each case, in excess of [***] except in the ordinary course of business consistent with the budgeted capital expenditures of the Group Companies or pursuant to any existing agreement, in ease case made available to Buyer prior to the date hereof;
(vii) (a) amend or authorize the amendment of its Governing Documents, (b) create, form or dissolve any Subsidiaries or (c) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(viii) enter into, amend or terminate any contract that is or would constitute a Material Contract or Material Lease if entered into prior to the date hereof (other than purchase and sale orders received by the Group Companies or add-on items for new customers, discounts on sale orders and other standard adjustments to Material Contracts in the ordinary course of business, in each case, as described on Schedule 3.7);
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(ix) declare, set aside or pay any non-cash dividends or distributions;
(x) incur any indebtedness (other than Funded Indebtedness that can be fully satisfied and repaid at or prior to Closing), or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person or any other indebtedness (other than Funded Indebtedness that can be fully satisfied and repaid at or prior to Closing), except for accounts payable incurred in the ordinary course of business and indebtedness incurred in the ordinary course of business pursuant to the Credit Facilities;
(xi) incur any Funded Indebtedness in excess of [***] provided such Funded Indebtedness can be fully satisfied and repaid at or prior to Closing;
(xii) merge into, consolidate with, or sell assets with a fair market value exceeding [***] to any other Person, make any acquisition of any capital stock or assets with a fair market value exceeding [***] or business of any other Person (whether by merger, stock or asset purchase or otherwise), or permit any other Person to be merged or consolidated with it;
(xiii) acquire or agree to acquire in any manner (whether by merger or consolidation, the purchase of an equity interest in or assets with a fair market value exceeding [***] of any business or any corporation, partnership, association, Person or other business organization or division thereof of any other Person;
(xiv) (x) settle any Proceeding pending or threatened against the Company or any of its Subsidiaries (a) in excess of [***], (b) that results in any limitation on the conduct of the businesses of any of the Group Companies or any of their Affiliates or (c) pursuant to which the Company or any Subsidiary is subject to an injunction, specific performance or other equitable remedy, or (y) initiate any Proceedings;
(xv) make, change or revoke any material Tax election; change or revoke any method of Tax accounting or adopt any material method of Tax accounting; file any amended income or other material Tax Return, enter into any closing agreement with any Governmental Entity; settle any material Tax claim or assessment; or prepare or file any Tax Return in a manner materially inconsistent with past practice;
(xvi) implement any layoffs affecting five (5) or more employees, place five (5) or more employees on unpaid leave or furlough, or materially reduce the hours or weekly pay of five (5) or more employees;
(xvii) (x) make any change in its Accounting Principles or the methods by which such principles are applied for financial reporting purposes, (y) write-down or write-up, in any material respect, the value of any asset, or, other than in the ordinary course of business, write-off any accounts receivable or notes receivable or (z) accelerate or delay the payment of accounts payable, accelerate or delay the collection of any notes or accounts receivable or otherwise fail to pay accounts payable and other business obligations or to collect accounts receivable, in each case in the ordinary course of business;
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(xviii) negotiate, enter into, amend or extend any collective bargaining agreement or other contractual obligation with a Union;
(xix) except as otherwise required by law or by the terms of any Employee Benefit Plan set forth on Schedule 3.10(a): (A) increase the compensation or benefits to be provided to any director, manager, officer, employee, individual independent contractor or other individual service provider (other than any increase adopted in the ordinary course of business in respect of the compensation of any non-officer employee whose annual base compensation does not exceed [***] after giving effect to such increase) or taken any action with respect to the grant of any severance or termination pay; (B) hire, engage, or terminate (other than a termination for cause) the employment or engagement of any employee, director, manager, officer, individual independent contractor or other individual service provider with annual compensation in excess of [***], other than replacements for individual who had annual compensation not in excess of [***] and have left the Company, provided that the Company notifies Buyer and consults with Buyer in good faith with respect to the replacement of such individuals; or (C) establish, adopt, enter into or amend any Employee Benefit Plan or any individual employment, individual consulting, retention, change in control bonus or severance agreement, or accelerate the time of payment, vesting or funding of any compensation or benefits under any Employee Benefit Plan; or
(xx) authorize, commit or agree to take or do, whether in writing or otherwise, any of the actions specified in this Section 6.1(a).
(b) From and after 11:59 p.m. Eastern Time on the date immediately preceding the Closing Date, neither Seller nor any Group Company shall cause any Cash and Cash Equivalents to be used outside of the ordinary course of business, including to reduce the amount of Indebtedness or Seller Expenses, provided, however that after the date hereof until 11:59 p.m. Eastern Time on the date immediately preceding the Closing Date, the Seller or any Group Company may cause any Cash and Cash Equivalents to be used to reduce Indebtedness or Seller Expenses.
(c) The parties shall use commercially reasonable efforts to open an escrow account pursuant to the Escrow Agreement on or prior to the Closing Date, and to provide the escrow agent with all required know your customer and other diligence information reasonably requested by the escrow agent in connection therewith.
(d) During the period beginning on the date hereof and until the earlier of (i) the termination of this Agreement or (ii) the Closing, the Group Companies shall, and shall cause their respective directors and officers to, use reasonable best efforts to implement the employee hiring plan designed by the Group Companies and made available to Buyer prior to the date hereof.
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Section 6.2 Access to Information. From and after the date hereof until the earlier of the Closing and the termination of this Agreement in accordance with its terms, upon reasonable notice, and subject to restrictions contained in any confidentiality agreement to which any Group Company is subject, each Group Company shall provide to Buyer and its authorized representatives during normal business hours reasonable access to all books and records of the Group Companies (in a manner so as to not interfere with the normal business operations of any Group Company). All of such information shall be treated as confidential information [***]. Notwithstanding anything to the contrary set forth in this Agreement, during the period from the date hereof until the Closing, neither Seller nor any of its Affiliates (including the Group Companies) shall be required to disclose to Buyer or any of its representatives that portion of any information (i) to the extent related to the sale or divestiture process conducted by Seller or its Affiliates for the Group Companies vis-à-vis any Person other than Buyer and its Affiliates, or Sellers or its Affiliates (or their representatives) evaluation of the business of the Group Companies in connection therewith, including projections, financial and other information relating thereto, (ii) the sharing of which would violate any law to which Seller or any of its Affiliates (including the Group Companies) is a party or is subject or which it reasonably determined upon the advice of counsel could result in the loss of the ability to successfully assert attorney-client and work product privileges, (iii) if Seller or any of its Affiliates, on the one hand, and Buyer or any of its Affiliates, on the other hand, are adverse parties in a litigation and such information is reasonably pertinent thereto, or (iv) if Seller reasonably determines upon the advice of counsel that such information should not be so disclosed due to its competitively sensitive nature; provided, however, that the Group Companies shall, in the case of clauses (ii) and (iv), to the extent permissible under applicable Law, share such information via a clean room or on an outside counsel basis.
Section 6.3 Efforts to Consummate.
(a) Subject to the terms and conditions herein provided, each of Seller and Buyer shall use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all reasonable things reasonably necessary and proper under applicable laws and regulations to consummate and make effective as promptly as practicable the transactions contemplated hereby (including the satisfaction, but not waiver, of the closing conditions set forth in ARTICLE 7 and obtaining consents of all Governmental Entities necessary to consummate the transactions contemplated hereby). The HSR Act filing fee will be paid by Buyer. Each Party shall make an appropriate filing, if necessary, pursuant to the HSR Act (which filing shall specifically request early termination of the waiting period prescribed by the HSR Act) with respect to the transactions contemplated by this Agreement promptly (and in any event, within ten (10) Business Days) after the date of this Agreement and shall supply as promptly as practicable to the appropriate Governmental Entities any additional information and documentary material that may be requested pursuant to the HSR Act. Each of Buyer and Seller shall use its reasonable best efforts to obtain all necessary and appropriate consents, approvals, waivers, actions, non-actions, or other authorizations from Governmental Entities, with respect to any antitrust clearance under the HSR Act and any foreign antitrust laws, as promptly as reasonably practicable, and in any event prior to Closing, and that any conditions set forth in or established by any such consents, clearances, approvals, waivers, actions, or non-actions or other authorizations from Governmental Entities are satisfied on or prior to Closing Date.
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(b) Notwithstanding the foregoing, nothing in this Section 6.3 or otherwise in this Agreement shall require Buyer or any of its Affiliates to: (i) propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by Order, consent decree, hold separate order, trust or otherwise, the sale, divestiture, license, disposition or hold separate of such assets or businesses of Buyer or its Subsidiaries or Affiliates (including such properties, assets, or operations of the Business and the Company), or otherwise offer or offer to commit to any action, non-action, condition or conduct requirement (including those that limit Buyers or its Subsidiaries or Affiliates freedom of action, ownership or control with respect to, or its ability to retain or hold, any of the businesses, assets, product lines, properties or services of Buyer or its Subsidiaries or Affiliates (including such properties, assets, or operations of the Business and the Group Companies)), (ii) terminate, relinquish, modify or waive existing relationships, ventures, contractual rights, obligations or other arrangements of Buyer or its Subsidiaries or Affiliates (including such properties, assets, or operations of the Business and the Group Companies), (iii) create any relationships, ventures, contractual rights, obligations or other arrangements of Buyer or its Subsidiaries or Affiliates (including such properties, assets, or operations of the Business and the Company) or (iv) enter or offer to enter into agreements and stipulate to the entry of an Order or decree or file appropriate applications with any Governmental Entity in connection with any of the actions contemplated by the foregoing clauses (i) through (iii). Seller shall not make any offer, acceptance or counter-offer to or otherwise engage in negotiations or discussions with any Governmental Entity with respect to any proposed settlement, consent decree, commitment, or remedy, or, in the event of litigation, discovery, admissibility of evidence, timing, or scheduling, except as specifically requested by or agreed with Buyer.
(c) In the event any Proceeding by a Governmental Entity or other Person is commenced which questions the validity or legality of the transactions contemplated hereby or seeks damages in connection therewith, the Parties agree to cooperate and use all reasonable efforts to defend against such Proceeding and, if an injunction or other Order is issued in any such action, suit or other proceeding, to use all reasonable efforts to have such injunction or other Order lifted, and to cooperate reasonably regarding any other impediment to the consummation of the transactions contemplated hereby.
(d) Seller and Buyer shall permit counsel for the other Party reasonable opportunity to review in advance, and consider in good faith the views of the other Party in connection with, any proposed written communication to any Governmental Entity relating to the transactions contemplated by this Agreement. Each of Seller and Buyer agrees not to participate in any substantive meeting or discussion, either in person or by telephone with any Governmental Entity in connection with the transactions contemplated by this Agreement unless it consults with the other Party in advance and, to the extent not prohibited by such Governmental Entity, gives the other Party the opportunity to attend and participate in such meeting or discussion.
(e) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, except as required by this Agreement, Seller and the Company (and their respective controlled Affiliates) and Buyer and its controlled Affiliates shall not engage in any action or enter into any transaction or permit any action to be taken or transaction to be entered into, that would materially impair or materially delay Buyers ability to consummate the transactions contemplated by this Agreement or perform its obligations hereunder; it being understood and agreed that Buyers or its Affiliates consideration of, entry into and/or consummation of a De-SPAC Transaction (and entry into any related documents, including any De-SPAC Transaction Documents), and the transactions related thereto, shall not be a violation of this sentence.
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Section 6.4 Public Announcements. Buyer, on the one hand, and the Company and Seller, on the other hand, shall consult with one another and seek one anothers approval (not to be unreasonably withheld, conditioned or delayed) before issuing any press release, or otherwise making any public statements, with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation and approval; provided that, the Parties agree to issue a mutually agreeable press release or public statement regarding the transactions contemplated by this Agreement [***]; provided further, that each Party may make any such announcement which it in good faith believes, based on advice of counsel, is necessary or advisable in connection with any Law or regulation, it being understood and agreed that, to the extent reasonably practicable, each Party shall provide the other Parties with copies of any such announcement in advance of such issuance and consider in good faith any comments received by the other Party; and provided further that the foregoing shall not restrict Buyer or its Affiliates from making any statements or disclosures in connection with a De-SPAC Transaction, including in any De-SPAC Transaction Documents. [***]. Notwithstanding anything to the contrary in this Section 6.4, Buyer and its Affiliates may disclose information about the subject matter of this Agreement in connection with a potential De-SPAC Transaction and related transactions to the counterparties thereto subject to applicable non-disclosure and confidentiality obligations, including to their and any counterpartys respective advisors, counsel, representatives and agents and as is otherwise reasonably necessary in connection with any filings or other statements to be made by Buyer, its Affiliates or the relevant counterparty to the De-SPAC Transaction in connection with the De-SPAC Transaction or De-SPAC Transaction Documents.
Section 6.5 Indemnification; Directors and Officers Insurance.
(a) Buyer agrees that all rights to indemnification, exculpation and advancement of expenses now existing in favor of the directors and officers of each Group Company, as provided in the Group Companies Governing Documents in effect as of the date hereof with respect to any matters occurring prior to the Closing Date, shall survive the transactions contemplated by this Agreement and shall continue in full force and effect and that Buyer shall cause the Group Companies (on their own or on Sellers behalf) to perform and discharge the Group Companies obligations to provide such indemnification, exculpation and advancement of expenses. The indemnification, liability limitation, exculpation or advancement of expenses provisions of the Group Companies Governing Documents shall not be amended, repealed or otherwise modified after the Closing Date in any manner that would adversely affect the rights thereunder of individuals who, as of the Closing Date or at any time prior to the Closing Date, were directors and officers of Seller or any Group Company, unless such modification is required by applicable law.
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(b) Without limiting any additional rights that any director, officer, fiduciary, trustee or agent may have under any agreement, arrangement, Employee Benefit Plan or under any Group Companys Governing Documents, from and after the Closing Date, Buyer shall cause the applicable Group Company, to the fullest extent permitted under applicable Law as in effect from time to time, to indemnify and hold harmless each present and former director, officer, fiduciary, trustee or agent of any Group Company against any and all losses in connection with any Proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that such Person is or was a director, officer, fiduciary, trustee or agent of any Group Company or arising out of actions taken (or failed to be taken) by such Person at the request of any Group Company with respect to any matters occurring prior to the Closing Date, in each case, to the extent, and consistent with, the provisions set forth in the Group Companies Governing Documents or any indemnification agreements in effect as of the date hereof, made available to Buyer prior to the date hereof, including, to the extent provided therein, with respect to any and all such losses arising out of or relating to this Agreement or the transactions contemplated hereby, for a period of six (6) years after the Closing Date. The Buyer or the Group Companies shall promptly advance expenses to any such director, officer, fiduciary, trustee or agent of any Group Company, as incurred, to the fullest extent permitted under applicable law as in effect from time to time, to the extent, and consistent with, the provisions set forth in the Group Companies Governing Documents or any indemnification agreements in effect as of the date hereof, made available to Buyer prior to the date hereof. Neither the Buyer nor any Group Company shall settle, compromise or consent to the entry of any judgment in any actual or threatened Proceeding or investigation in respect of which indemnification has been sought by a Person hereunder unless such settlement, compromise or judgment includes an unconditional release of such Person from all liability arising out of such Proceeding or investigation. Neither Buyer nor any Group Company shall have any obligation hereunder to any Person when and if a court of competent jurisdiction shall ultimately determine (and such determination shall have become final and non-appealable) that the indemnification of such Person in the manner contemplated hereby is prohibited by applicable Law.
(c) The Group Companies may purchase, prior to the Closing a tail policy providing directors and officers liability insurance coverage for a period of six (6) years after the Closing Date for the benefit of those Persons who are covered by any Group Companys directors and officers liability insurance policies as of the date hereof or at the Closing, with respect to matters occurring prior to the Closing at a cost borne equally by Seller and Buyer. Such a policy shall provide coverage that is at least equal to the coverage provided under Sellers or the Group Companies current directors and officers liability insurance policies; provided that the Group Companies may substitute therefor policies of at least the same coverage containing terms and conditions which are no less advantageous to the beneficiaries thereof so long as such substitution does not result in gaps or lapses in coverage with respect to matters occurring prior to the Closing Date.
(d) Buyer agrees, and will cause the Group Companies, not to take any action that would have the effect of limiting the aggregate amount of insurance coverage required to be maintained for the individuals referred to in this Section 6.5. If Buyer, any Group Company or any of their respective successors or assigns (i) shall merge or consolidate with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series of related transactions to any individual, corporation or other entity, then in each such case, proper provisions shall be made so that the successors or assigns of Buyer or such Group Company shall assume all of the obligations set forth in this Section 6.5; provided that neither Buyer nor such Group Company shall be relieved from such obligation.
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(e) The directors, officers, fiduciaries, trustees and agents of Seller and each Group Company entitled to the indemnification, liability limitation, exculpation and insurance set forth in this Section 6.5 are intended to be third party beneficiaries of this Section 6.5. This Section 6.5 shall survive the consummation of the transactions contemplated by this Agreement and shall be binding on all successors and assigns of Buyer.
Section 6.6 Exclusive Dealing. During the period from the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, neither Seller nor the Company shall take, nor shall either authorize or permit any of their respective Affiliates, officers, directors, employees, representatives, consultants, financial advisors, attorneys, accountants or other agents (collectively, the Company Representatives) to: (i) solicit, initiate, enter into, participate in or continue any discussions or engage in negotiations with any Person (whether such negotiations are initiated by the Company, an Affiliate, a third party, a Company Representative or otherwise), other than Buyer or its Affiliates, relating to an Acquisition Transaction; (ii) provide non-public information or documentation with respect to any Group Company to any Person, other than Buyer or its Affiliates or its or their representatives, relating to an Acquisition Transaction; (iii) encourage the submission of or take any action to facilitate any inquiries or the making of an Acquisition Transaction or (iv) enter into any agreement, letter of intent, agreement in principal, or any definitive agreement with any Person, other than Buyer or its Affiliates effecting an Acquisition Transaction. The Company shall immediately cease all discussions, negotiations and other activities described in the immediately preceding sentence to the extent they are occurring or have occurred on or prior to the date hereof. The term Acquisition Transaction means any proposal, transaction or offer by a Person (other than Buyer): (a) for any merger, consolidation, share exchange, business combination, joint venture, liquidation, dissolution, recapitalization, reorganization or other similar transaction directly or indirectly involving the Company, its Subsidiaries or its equityholders pursuant to which the equityholders of the Company or any Group Company immediately preceding such transaction hold less than eighty-five percent (85%) of the aggregate equity interests in the surviving or resulting entity of such transaction or any direct or indirect parent thereof; (b) for any initial public offering or private placement of securities of the Company; (c) a merger or consolidation with a special purpose acquisition company or its subsidiary; (d) for the acquisition or exchange of any material assets of the Group Companies (other than any such transactions in the ordinary course of the Companys business, but which in any event do not exceed 10% of the Group Companies consolidated assets or revenues, individually or in the aggregate); or (e) for any transaction similar to, or having a similar effect as, any of the transactions described in the foregoing clauses (a), (b), (c) or (d); and in any of the preceding clauses, in one transaction or in a series of transactions.
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Section 6.7 Documents and Information. After the Closing Date, Buyer and the Company shall, and shall cause the Companys Subsidiaries to, until the seventh anniversary of the Closing Date, retain all material books, records and other documents pertaining to the business of the Group Companies in existence on the Closing Date in a manner that is consistent with the ordinary course document retention policies of the Buyer, and to make the applicable portion of the same available for inspection and copying by Seller (at Sellers expense) during normal business hours of the Company or any of its Subsidiaries, as applicable, upon reasonable request and upon reasonable notice to the extent such materials are necessary or useful in connection with any financial or tax audits or filings.
Section 6.8 Contact with Customers, Suppliers and Other Business Relations.
During the period from the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, Buyer hereby agrees that it is not authorized to and shall not (and shall not permit any of its employees, agents, representatives or Affiliates to) contact any material customer or supplier of any Group Company if the purpose of such discussions is to discuss the Business or the transactions contemplated by this Agreement without the prior consent of, or coordination with, Seller; provided, that, in no event shall the foregoing prohibit or restrict Buyer or any of its Affiliates, agents, employees or other representatives from operating in the ordinary course of business, including contacting or engaging in business relationships with any Person unrelated to the Business.
Section 6.9 Employee Benefit Matters. During the period beginning on the Closing Date and ending on the first anniversary of the Closing Date (or, if shorter, the applicable Continuing Employees period of employment), Buyer shall provide employees of each Group Company who are employed by the Group Companies on the Closing Date (the Continuing Employees) with base salary or base wages and cash bonus opportunities (excluding, for the avoidance of doubt, equity-based compensation, long-term incentives, and transaction and retention bonus opportunities) that are no less favorable in the aggregate than those being provided to such employees immediately prior to the Closing Date and with employee benefits that are substantially comparable in the aggregate to the Employee Benefit Plans and any other benefits, plans, programs, policies, agreements, or arrangements maintained by Seller and the Group Companies as of the Closing (including severance, but for the avoidance of doubt, excluding equity-based compensation, long-term incentives, and transaction- and retention-related benefits). Buyer further agrees that, from and after the Closing Date, Buyer shall grant Continuing Employees credit for any service with any Group Company earned prior to the Closing Date (i) for eligibility and vesting purposes and (ii) for purposes of vacation accrual and severance benefit determinations under any benefit or compensation plan, program, agreement or arrangement that may be established or maintained by Buyer or a Group Company or any of its or their Subsidiaries on or after the Closing Date (the New Plans), without duplication of benefits. In addition, Buyer hereby agrees that Buyer shall use commercially reasonable efforts to (A) cause to be waived all pre-existing condition exclusion and actively-at-work requirements and similar limitations, eligibility waiting periods and evidence of insurability requirements under any New Plans to the extent waived or satisfied by an employee under any Employee Benefit Plan as of the Closing Date and (B) cause any deductible, co-insurance and out-of-pocket covered expenses paid on or before the Closing Date by any employee (or covered dependent thereof) of any Group Company to be taken into account for purposes of satisfying applicable deductible, coinsurance and maximum out-of-pocket provisions after the Closing Date under any applicable New Plan in the year of initial participation. Nothing contained herein, express or implied, is intended to confer upon any employee of any Group Company any third-party beneficiary or other right to enforce the
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provisions of this Section 6.9 or any right to employment or continued employment for any period or continued receipt of any specific employee benefit or any term or condition of employment, or shall constitute an amendment to or any other modification of any New Plan or Employee Benefit Plan. Buyer agrees that Buyer and the Group Companies shall be solely responsible for satisfying the continuation coverage requirements of Section 4980B of the Code for all individuals who are M&A qualified beneficiaries as such term is defined in Treasury Regulation Section 54.4980B-9. Nothing in this Section 6.9 shall be deemed to limit the right of Buyer, the Company or any of their respective Affiliates to terminate the employment of any employee at any time or to amend or terminate any benefit or compensation plan. Notwithstanding the foregoing, nothing herein shall prevent Buyer or any of its Affiliates (including any Group Company) from adjusting the compensation or benefits of any Continuing Employee if the Buyer or its Affiliate (as applicable) deems, in its reasonable judgment, that such adjustments are necessary due to the business impact of COVID-19 and consistent with the treatment of Buyers similarly situated current employees.
Section 6.10 Transfer Taxes. All transfer, sales, use, value added, excise, stamp, recording, registration and any and other similar Taxes and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) that are imposed on any of the Parties hereto by any Governmental Entity in connection with the transactions contemplated by this Agreement (collectively, Transfer Taxes) shall be [***]. All necessary Tax Returns and other documentation with respect to any Transfer Taxes shall be [***] in the execution of any such Tax Returns and other documentation.
Section 6.11 Debt Payoff Letters. The Company shall, and shall cause each other Group Company to, use commercially reasonable efforts to (a) obtain from each holder of Closing Date Indebtedness that is Funded Indebtedness a payoff letter in a customary form (collectively, the Debt Payoff Letters) and (b) provide Buyer with a copy of such Debt Payoff Letters at least one Business Day prior to the Closing Date.
Section 6.12 Tax Matters.
(a) On the Closing Date, the Company shall deliver to Buyer a certificate in the form of Exhibit E attached hereto in compliance with Section 1.897-2(h) and 1.1445-2(c)(3)(i) of the Treasury Regulations, duly executed and acknowledged, certifying that no interest in the Company is a U.S. real property interest, as defined in Section 897 of the Code; provided, that [***].
(b) Buyer shall not make an election pursuant to Section 336 or 338 of the Code (or any corresponding providing of state, local, or non-U.S. Tax Law) with respect to the transactions contemplated by this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, to the extent that an amount is paid or is payable to the Seller pursuant to this Agreement for the benefit of any service provider of the Group Companies and such amount may be subject to payroll and employment tax withholding under applicable law (e.g., such amounts are payable by the Seller to an employee or former employee of the Group Companies and those amount are treated as wages under Code Sections 3121, 3306, or 3402), then, at the written request and direction of the Seller (or otherwise at the Buyers discretion if required under applicable law), the Buyer shall, or shall
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cause the Group Companies to, pay such amounts through the applicable payroll system of the Buyer or the Group Companies and make all applicable employment and payroll tax withholding on such amounts in accordance with applicable law, provided that, if such amount has already been paid to the Seller, then the Seller agrees to promptly deliver to an account or accounts (as instructed by the Buyer) of one or more of the Buyer or the Group Companies such amount.
(d) Buyer shall (and shall cause the Group Companies to), and the Seller shall, cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the preparation and filing of any Tax Return and any audit, litigation or other proceeding with respect to Taxes and the computation and verification of any amounts paid or payable under this Agreement (including any supporting work papers, schedules and documents). Such cooperation shall include the retention and (upon the other Partys request) the provision of records and information which are reasonably relevant to any such Tax Return, audit, litigation or other proceeding or any tax planning and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.
(e) The Buyer shall not take any action with respect to any of the Group Companies that would cause the transactions contemplated by this Agreement to constitute part of a transaction that is the same as, or substantially similar to, the Intermediary Transaction Tax Shelter described in Internal Revenue Service Notices 2001-16 and 2008-111.
(f) In the case of any taxable period of any Group Company including but not ending on the Closing Date (each, a Straddle Period), for all purposes of this Agreement, any Taxes of the Group Companies for such period imposed on or with respect to income, sales, receipts or payments shall be apportioned between the portion of such period ending on the Closing Date and the portion of such period beginning after the Closing Date based on a closing of the books as of the close of the Closing Date (and for such purpose, the taxable period of any partnership or other pass-through entity shall be deemed to terminate at such time) (provided that exemptions, allowances, deductions or other items that are calculated on an annual basis (including, but not limited to, depreciation and amortization deductions) shall be allocated on the per diem basis), and in the case of any other Taxes, the amount of such Taxes apportioned to the portion of such period ending on the Closing Date shall equal the full amount of such Taxes for such period multiplied by the number of days in the portion of such period that ends on the Closing Date and divided by the total number of days in such period. Notwithstanding the foregoing, the Parties agree that all Transaction Tax Deductions shall be allocated to the Pre-Closing Tax Period to the extent allowed by applicable Law (at least at a more likely than not level of comfort, as determined by a Big 4 accounting firm).
Section 6.13 R&W Insurance Policy. At or before the Closing, the Buyer shall use reasonable best efforts to obtain and bind the R&W Insurance Policy. The R&W Insurance Policy shall, if procured, provide that the insurer shall waive and not pursue any subrogation rights against the Seller, other than in the case of claims of, or causes of action arising from, Fraud. Buyer shall pay for all fees, costs and expenses due and payable under the R&W Insurance Policy.
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Section 6.14 Termination of Affiliate Agreements. At or before the Closing, each Group Company shall take all actions necessary to terminate, or cause to be terminated, in full each contract or arrangement Notwithstanding anything to the contrary in this Agreement, to the extent that an amount is paid or is payable to the Seller pursuant to this Agreement for the benefit of any service provider of the Group Companies and such amount may be subject to payroll and employment tax withholding under applicable law (e.g., such amounts are payable by the Seller to an employee or former employee of the Group Companies and those amount are treated as wages under Code Sections 3121, 3306, or 3402), then, at the written request and direction of the Seller (or otherwise at the Buyers discretion if required under applicable law), the Buyer shall, or shall cause the Group Companies to, pay such amounts through the applicable payroll system of the Buyer or the Group Companies and make all applicable employment and payroll tax withholding on such amounts in accordance with applicable law, provided that, if such amount has already been paid to the Seller, then the Seller agrees to promptly deliver to an account or accounts (as instructed by the Buyer) of one or more of the Buyer or the Group Companies such amount., in each case, pursuant to documentation in form and substance reasonably acceptable to Buyer and providing that such contract and arrangements shall have no further force and effect and that the applicable member of the Group Company party thereto shall have no further liability or obligations thereunder. Prior to the Closing, the Company shall deliver to Buyer evidence satisfactory to Buyer of the termination of all such agreements, including Sponsor Agreements, effective as of the Closing, without any further action by the parties thereto and without any further liability of the Company or any other Group Company thereunder.
Section 6.15 Cooperation; Financial Statements.
(a) Prior to the Closing, each of Seller, the Company and their respective Affiliates shall use commercially reasonable efforts to provide to Buyer and its Affiliates, and shall use its commercially reasonable efforts to cause its representatives, including legal and accounting, to provide all cooperation reasonably requested by Buyer that is customary or reasonably necessary in connection with arranging, negotiating and consummating the De-SPAC Transaction or a debt financing in connection with the transactions contemplated by this Agreement (a Debt Financing), including: (i) preparing and furnishing to Buyer and its representatives as promptly as reasonably practicable with all available pertinent information and disclosures relating to the Group Companies (including their businesses, operations, financial projections and prospects) as may be reasonably requested by the Buyer, its Affiliates and their respective representatives to assist in preparation of the De-SPAC Transaction Documents or Debt Financing documents; (ii) having the Company designate members of senior management of the Company to execute customary authorization letters with respect to proxy/registration statement for the De-SPAC Transaction and participate in a reasonable number of management presentations, due diligence sessions and drafting sessions in connection with the De-SPAC Transaction or Debt Financing; provided that none of the Companys officers, directors, managers, employees, equityholders or representatives shall otherwise be required to execute or adopt any certificate, document or instrument on behalf of the Buyer in connection with the De-SPAC Transaction or Debt Financing; (iii) requesting the Companys independent auditors to cooperate with Buyers commercially reasonable efforts to obtain customary accountants consents and audit opinions (including any reissuance thereof) from the Companys independent auditors; and (iv) furnishing Buyer and its Affiliates with the all documentation and other information reasonably requested by Buyer in connection with the De-SPAC Transaction or Debt Financing, including any documentation and other information required by Governmental Entities and the Required Information. Buyer shall indemnify and hold harmless the Company and its Subsidiaries and their respective representatives
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from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred in connection with this Section 6.15(a), except to the extent arising or resulting from such Persons gross negligence or willful misconduct. Buyer shall, promptly upon request by the Company, reimburse the Company for all reasonable out-of-pocket costs (including reasonable attorneys fees) incurred by the Company or its Subsidiaries in connection with this Section 6.15(a). For the avoidance of doubt, other than in respect of any financial statements or other documents or information that has or would be prepared by the Company in the ordinary course, Buyer shall be responsible for all reasonable out-of-pocket costs, expenses and fees associated with the De-SPAC Transaction, De-SPAC Transaction Documents, the Debt Financing and any other reasonable out-of-pocket costs, expenses incurred by any Group Company in connection with this Section 6.15, including any reasonable out-of-pocket costs and expenses incurred by the Company to generate and deliver the Required Information to the extent such information is not already prepared as of the date hereof.
(b) The Company hereby consents to the use of the Companys name, trademarks and logos in connection with the De-SPAC Transaction and Debt Financing in substantially the same manner currently being used. In connection with any De-SPAC Transaction Documents or Debt Financing documents prepared by Buyer or its Affiliates, the Company will, upon request of Buyer, use its commercially reasonable efforts to periodically update any information provided by the Company and to be included in such De-SPAC Transaction Documents or Debt Financing documents so that Buyer may ensure that such information, when taken as a whole, does not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements contained therein not materially misleading.
(c) From the date hereof to the Closing Date, the Company shall furnish to Buyer as soon as practicable, but in no event later than the 45th day after the last day of the preceding fiscal quarter, the unaudited quarterly balance sheets, income statements, statements of cash flow and supporting documentation relating to the quality of earnings of the Company and its Subsidiaries (all to be prepared in accordance with GAAP consistently applied) showing its financial condition as of the close of such quarter and the results of operations during such quarter and for the elapsed portion of the Companys fiscal year. The Company and its Subsidiaries will, upon the request and expense of Buyer, cause their independent auditors to review the Group Companies unaudited quarterly balance sheets, income statements and statements of cash flow and provide Buyer with the results thereof.
(d) Notwithstanding this Section 6.15 or anything else in this Agreement, subject to the occurrence of the Inside Date, Buyer affirms that (i) it is not a condition to the Closing or to any of its other obligations under this Agreement that Buyer undergo and consummates the De-SPAC Transactions or Debt Financing and (ii) Buyer shall not be entitled to terminate this Agreement as a result of the Companys and the Sellers breach of obligations under this Section 6.15 (other than a breach of Section 6.15(c)) if such breach (or breaches) is promptly cured, is otherwise immaterial or is not, and would not reasonably be expected to be, the primary cause of any failure, material delay or impairment on or to Buyer or its Affiliates ability to enter into, perform its obligations under or consummate a De-SPAC Transaction or Debt Financing.
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Section 6.16 Releases. Effective as of the Closing, each of the Seller, and its Affiliates and their respective employees, officers, directors, Subsidiaries, successors and assigns, hereby fully and unconditionally releases, acquits and forever discharges each of the Group Companies, Buyer, SL, the current and former directors and officers of the foregoing and their respective Affiliates, and their and their Affiliates respective former, current and future equityholders, controlling persons, directors, officers, employees, agents, representatives, members, managers, general or limited partners, or assignees (or any former, current, or future equityholder, controlling person, director, officer, employee, agent, representative, Affiliate, member, manager, general or limited partner, or assignee of any of the foregoing) from any and all manner of actions, causes of actions, claims, obligations, demands, damages, costs, expenses, compensation or other relief, whether known or unknown, whether in law or equity, arising out of or relating to or accruing from their relationship with any Group Company prior to the Closing.
Section 6.17 280G Matters. (A) At least five (5) Business Days prior to the Closing Date, the Company shall use its reasonable best efforts to solicit from each Person to whom any payment or benefit is required or proposed to be made in connection with the transactions contemplated by this Agreement that would constitute parachute payments under Section 280G(b)(2) of the Code (each such Person, a Disqualified Individual, and such payments Parachute Payments) a written agreement waiving such Disqualified Individuals right to receive some or all of such payment or benefit (the Waived Benefits), to the extent necessary so that all remaining payments and benefits applicable to such Disqualified Individual shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the stockholders of the Company in a manner that complies with Section 280G(b)(5)(B) of the Code and (B) at least two (2) days prior to the Closing submit the Waived Benefits of each Disqualified Individual who has executed a waiver in accordance with this Section 6.17 for approval of the stockholders and such Disqualified Individuals right to receive the Waived Benefits shall be conditioned upon receipt of the requisite approval by the stockholders in a manner that complies with Section 280G(b)(5)(B) of the Code. At least fifteen (15) Business Days prior to the Closing Date, the Company shall provide Buyer and its counsel with a list of disqualified individuals (as defined in Section 280G(c) of the Code). At least ten (10) Business Days prior to the Closing Date, the Buyer will provide the Company with the information to be included in the calculations and disclosure related to arrangements to be entered into between Buyer or any of its Affiliates and any Disqualified Individual (Buyer Arrangements). At least seven (7) Business Days prior to the Closing, the Company shall finalize the calculation, and provide the waiver agreement and the disclosure statement prepared in connection with the actions contemplated by this Section 6.17 to Buyer for review and comment. If the information contained in the calculations is incorrect by reason of the information provided by Buyer in connection with the calculation and disclosure of the Buyer Arrangements, then the Companys failure to include the Buyer Arrangements in the stockholder voting materials described in this Section 6.17 will not result in a breach of the covenants set forth in this Section 6.17.
Section 6.18 [***]. At the request of Buyer, at [***], the Company shall take all necessary actions to [***] contingent on the consummation of the transactions contemplated hereby, other than the final distribution of assets in connection such termination, with such termination to be effective prior to the Closing Date [***].
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Section 6.19 Notification. From the date hereof until the Closing Date, each of the Company and the Seller, on the one hand, and Buyer, on the other hand, shall give prompt written notice to the other Parties of the occurrence, or failure to occur, of any event, which occurrence or failure to occur would be reasonably likely to cause (a) any of the representations and warranties of the (i) Company set forth in ARTICLE 3, (ii) Seller set forth in ARTICLE 4 or (iii) Buyer in ARTICLE 5 to not be true and correct such that the condition to Closing set forth in Section 7.2(a) or Section 7.3(a), as applicable, would not be satisfied or (b) such Party to fail to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Person under this Agreement or any Transaction Document such that the condition set forth in Section 7.2(b) or Section 7.3(b), as applicable would not be satisfied.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
Section 7.1 Conditions to the Obligations of the Company, Buyer and Seller. The obligations of the Company, Buyer and Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, if permitted by applicable law, waiver by the Party for whose benefit such condition exists) of the following conditions:
(a) any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated; and
(b) no Order (including by temporary restraining order or preliminary or permanent injunction) issued by any court of competent jurisdiction or other Governmental Entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement shall be in effect.
Section 7.2 Other Conditions to the Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver by Buyer of the following further conditions:
(a) (i) each of the representations and warranties of the Company set forth in ARTICLE 3 hereof and Seller set forth in ARTICLE 4 hereof (except for the Fundamental Representations, as defined below, and the representations and warranties in Section 3.7(a)) shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are made on and as of a specified date, in which case the same shall continue on the Closing Date to be true and correct as of the specified date and to the extent the failure of any such representations and warranties to be true and correct as of such dates would not (disregarding all qualifications or limitations therein as to materiality or Company Material Adverse Effect) have a Company Material Adverse Effect; (ii) the representations and warranties in Section 3.7(a) (Absence of Changes) shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date and (iii) each of the representations and warranties set forth in Section 3.1 (Organization and Qualifications; Subsidiaries), Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority), Section 3.16 (Brokers), Section 3.18
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(Transactions with Affiliates), Section 4.1 (Organization), Section 4.2 (Authority), Section 4.4 (Brokers) and Section 4.5 (Title to the Units; Ownership of Seller) (collectively, the Fundamental Representations) shall be true and correct as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that such representations and warranties that are made as of a specific date need only be true and correct as of the specified date), except for de minimis inaccuracies.
(b) Seller and the Company shall have performed and complied in all material respects with all covenants and agreements required to be performed or complied with by Seller and the Company under this Agreement on or prior to the Closing Date;
(c) prior to or at the Closing, the Company shall have delivered a certificate of an authorized officer of the Company, dated as of the Closing Date, to the effect that the conditions specified in Section 7.2(a) and Section 7.2(b) have been satisfied by the Company;
(d) the Escrow Agreement shall have been executed by Seller and the Escrow Agent; and
(e) from the date of this Agreement, there shall not have occurred any Company Material Adverse Effect.
Section 7.3 Other Conditions to the Obligations of the Company and Seller. The obligations of the Company and Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver by the Company and Seller of the following further conditions:
(a) the representations and warranties of Buyer set forth in ARTICLE 5 hereof shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are made on and as of a specified date, in which case the same shall continue on the Closing Date to be true and correct as of the specified date, in each case, except where the failure of such representations and warranties to be so true and correct would not have a material adverse effect on the Buyers ability to consummate the Closing;
(b) Buyer shall have performed and complied in all material respects with all covenants required to be performed or complied with by it under this Agreement on or prior to the Closing Date;
(c) prior to or at the Closing, Buyer shall have delivered a certificate of an authorized officer of Buyer, dated as of the Closing Date, to the effect that the conditions specified in Section 7.3(a) and Section 7.3(b) have been satisfied; and
(d) the Escrow Agreement shall have been executed by Buyer and the Escrow Agent.
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ARTICLE 8
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at any time prior to the Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer, if (i) any of the representations and warranties of the Company set forth in ARTICLE 3 or Seller set forth in ARTICLE 4 shall not be true and correct such that the condition to Closing set forth in Section 7.2(a) would not be satisfied or (ii) Seller or any Group Company shall have breached or failed to comply with any of its obligations under this Agreement such that the condition set forth in Section 7.2(b) would not be satisfied, and such breach or breaches cannot be cured on or prior to the Termination Date, or, if curable, is not cured within 30 days after written notice thereof is delivered to Seller by Buyer; provided, however, that Buyer shall not have the right to terminate this Agreement pursuant to this Section 8.1(b) if Buyer is then in material breach of this Agreement;
(c) by Seller, if (i) any of the representations and warranties of Buyer set forth in ARTICLE 5 shall not be true and correct such that the condition to Closing set forth in Section 7.3(a) would not be satisfied or (ii) Buyer shall have breached or failed to comply with any of its obligations under this Agreement such that the condition set forth in Section 7.3(b) would not be satisfied, and such breach or breaches cannot be cured on or prior to the Termination Date, or if curable, is [***] thereof is delivered to Buyer by Seller; provided, however, that Seller shall not have the right to terminate this Agreement pursuant to this Section 8.1(c) if Seller or any Group Company is then in material breach of this Agreement;
(d) [***];
(e) by Seller, if the transactions contemplated by this Agreement shall not have been consummated by the Termination Date, unless the Seller or any Group Company is in breach of their respective representations, warranties, obligations or covenants under this Agreement; or
(f) by either Buyer or Seller, if any Governmental Entity shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such Order or other action shall have become final and nonappealable.
Section 8.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.1, written notice thereof shall be given to the other Parties, specifying the provisions hereof pursuant to which such termination is made and the basis therefor described in reasonable detail, and this entire Agreement shall forthwith become void and of no further force and effect and all rights and obligations of any Party hereto shall cease (and there shall be no liability or obligation on the part of Buyer, Seller or the Company or their respective officers, directors or equityholders) with the exception of (a) the provisions of this Section 8.2, the second sentence of Section 6.3(a), the last three sentences in Section 6.15(a) and ARTICLE 10 (and any defined terms associated therewith), and (b) any liability of any Party for Fraud or any willful and material breach of this Agreement (which, for the avoidance of doubt, shall be deemed to include any failure by Buyer to consummate the Closing if it is obligated to do so hereunder) prior to such termination.
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ARTICLE 9
NON-SURVIVAL
Section 9.1 Non-Survival.
(a) Subject to Section 9.2, the representations, warranties, covenants and agreements of any of the Company, the Seller and Buyer (each of the foregoing, a Specified Party) in this Agreement, any other Transaction Document, or in any other document contemplated hereby or thereby, or in any certificate delivered hereunder or thereunder, shall terminate effective immediately at the Closing, except the covenants and agreements that explicitly contemplate performance after the Closing shall survive the Closing in accordance with their terms (or until fully performed in accordance with this Agreement) (including, for avoidance of doubt, the Non-Competition Agreements and Non-Solicitation Agreements). Except in the case of Fraud, the Parties hereto acknowledge and agree that from and after the Closing, no Party hereto (or any of their respective Affiliates) shall be permitted to make, and no Specified Party (or any of their respective Affiliates) shall have any liability or obligation with respect to, any claims for any breach of any representation or warranty set forth herein or any covenant or agreement herein that is to have been performed by a Specified Party on or prior to the Closing or for detrimental reliance or any other right or remedy (whether in contract, in tort or at law or in equity). In furtherance of the foregoing, from and after the Closing, except in the case of Fraud, each of Buyer, on the one hand, and Seller on the other hand, hereby waives (on behalf of itself, each of their respective controlled Affiliates and each of its representatives), to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (including any statutory rights to contribution or indemnification) relating to, in the case of Buyer, the Seller, or any of its businesses, in the case of Seller, Buyer, the Group Companies or any of their respective businesses, or, in either case, relating to the subject matter of this Agreement or any other document contemplated hereby, or the transactions contemplated hereby, in each case, whether or not arising under, or based upon, any law (including any right, whether arising at law or in equity, to seek indemnification, contribution, cost recovery, damages, or any other recourse or remedy) (other than, and solely with respect to and solely to the extent of, any of the covenants that survive the Closing in this Agreement or any other Transaction Document or in any other document contemplated hereby or thereby (including, for avoidance of doubt, the Non-Competition Agreements and Non-Solicitation Agreements), accordance with this ARTICLE 9). Except in the case of Fraud, the rights and claims waived pursuant to the immediately preceding sentence, include, to the fullest extent permitted under applicable Law, claims for breach of contract, for breach (negligent or otherwise) of representation or warranty, and claims for breach of duty. Nothing contained in this ARTICLE 9 shall in any manner limit or restrict a claim for (i) Fraud, (ii) Buyers liability for failure to pay the amounts required under this Agreement, including the Purchase Price, and any other amounts contemplated by the Escrow Agreement, to the extent owing pursuant to the terms of this Agreement, (iii) recovery under the R&W Insurance Policy or (iv) recovery under the Non-Competition Agreements and Non-Solicitation Agreements.
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(b) Except in the case of Fraud, Buyer acknowledges that it has conducted to its satisfaction an independent investigation of the financial condition, results of operations, assets, liabilities, properties and projected operations of the Company, that Buyer and its representatives have been provided access to the properties, records and personnel of the Company for this purpose, and, in making its determination to proceed with the transactions contemplated by this Agreement, Buyer has relied solely and exclusively on the representations and warranties of the Company and the Seller expressly and specifically set forth in ARTICLE 3 and ARTICLE 4, as qualified by the Schedules attached hereto and the other representations and warranties set forth in the other Transaction Documents, including any certificate delivered hereunder or thereunder. Such representations and warranties by the Seller and the Company, constitute the sole and exclusive representations and warranties of the Seller and the Company to Buyer in connection with the transactions contemplated hereby and thereby, and, except in the case of Fraud, Buyer understands, acknowledges and agrees that all other representations and warranties of any kind or nature expressed or implied (including any relating to the future or historical financial condition, results of operations, assets or liabilities of the Company or the quality, quantity or condition of the Companys assets) are specifically disclaimed by the Company and the Seller and none of the Company or the Seller or any other Person makes or has made any representation or warranty, contractual or legal, either express or implied, including as to the accuracy or completeness of any of the information provided or made available to the Buyer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS (INCLUDING ANY CERTIFICATE DELIVERED HEREUNDER OR THEREUNDER), NONE OF THE SELLER, THE COMPANY OR THEIR SUBSIDIARIES MAKES OR PROVIDES, AND BUYER, EXCEPT IN THE CASE OF FRAUD, HEREBY WAIVES, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO SAMPLES, OR CONDITION OF THE COMPANYS ASSETS OR ANY PART THEREOF. In connection with Buyers investigation of the Company, Buyer has received certain projections, including projected statements of operating revenues and income from operations of the Company and certain business plan information. Buyer acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, budgets, pipeline reports and other forecasts and plans, that Buyer is familiar with such uncertainties and that Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, budgets, pipeline reports and other forecasts and plans so furnished to it or made available to it or any of its agents, representatives, lenders or Affiliates, including the reasonableness of the assumptions underlying such estimates, projections, budgets, pipeline reports and other forecasts and plans. Accordingly, Buyer hereby acknowledges that, except as expressly provided in this Agreement and the other Transaction Documents (including any certificate delivered hereunder or thereunder), none of the Company, the Seller, nor any of their respective Affiliates, officers, directors, employees, partners, members, agents, attorneys, representatives, successors or permitted assigns is making any representation or warranty with respect to such estimates, projections, budgets, pipeline reports and other forecasts and plans, including the reasonableness of the assumptions underlying such estimates, projections, budgets, pipeline reports, forecasts and plans, and that, except for the representations and warranties in this Agreement, and the other representations and warranties set forth in the other Transaction Documents (including any certificate delivered hereunder or thereunder), Buyer has not relied on any such estimates, projections, budgets, pipeline reports or other forecasts or plans.
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Section 9.2 Non-Recourse. Without limiting the generality of Section 9.1 each Party hereto agrees, on behalf of itself and its controlled Affiliates, that, except in the case of Fraud, all proceedings, claims, obligations, liabilities or causes of action (whether in contract or in tort, in law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate to: (a) this Agreement, any other Transaction Document, or any other agreement referenced herein or therein, or the transactions contemplated hereby or thereby, including any certificate delivered hereunder or thereunder, (b) the negotiation, execution or performance this Agreement, any other Transaction Document or any other agreement referenced herein or therein, or the transactions contemplated hereby or thereby including any certificate delivered hereunder or thereunder (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement or such other Transaction Document), or (c) any breach or violation of this Agreement, any other Transaction Document or any other agreement referenced herein or therein, including any certificate delivered hereunder or thereunder, in each case, may be made only against (and are those solely of) the Persons that are expressly identified herein or therein as Parties to hereto or thereto and, in accordance with, and subject to the terms and conditions of this Agreement. In furtherance and not in limitation of the foregoing, and notwithstanding anything contained in this Agreement, any other Transaction Document or any other agreement referenced herein or therein, including any certificate delivered hereunder or thereunder or otherwise to the contrary, except in the case of Fraud, each Party hereto covenants, agrees and acknowledges, on behalf of itself and its respective controlled Affiliates, that no recourse under this Agreement, any other Transaction Document or any other agreement referenced herein or therein, or in any other document contemplated hereby or thereby, including in any certificate delivered hereunder or thereunder shall be sought or had against any other Person who is not a Party hereto or thereto and, except in the case of Fraud, no other such Person shall have any liabilities or obligations (whether in contract or in tort, in law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related to the items in the immediately preceding clauses (a) through (c), it being expressly agreed and acknowledged that no personal liability or losses whatsoever shall attach to, be imposed on or otherwise be incurred by any of the aforementioned, as such, arising under, out of, in connection with or related to the items in the immediately preceding clauses (a) through (c), in each case, except for claims that any Party hereto may assert against another Party hereto solely in accordance with, and pursuant to the terms and conditions of, this Agreement.
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ARTICLE 10
MISCELLANEOUS
Section 10.1 Entire Agreement; Assignment; Amendment. This Agreement, together with the Transaction Documents, Confidentiality Agreement, all Exhibits and Schedules hereto and thereto, and any certificate delivered hereunder or thereunder as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof [***], (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof and (b) shall not be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of Buyer and Seller and any attempted assignment of this Agreement not in accordance with the terms of this Section 10.1 shall be void; provided, that (a) Buyer may assign this Agreement and any or all of its rights and interests hereunder to one or more of its Affiliates or designate one or more of its Affiliates to perform its obligations hereunder, in each case, so long as Buyer is not relieved of any liability or obligations hereunder and (b) Buyer may assign this Agreement and any or all of its rights and interest hereunder to any purchaser of all or substantially all its assets or equity interests or designate such purchaser to perform its obligations hereunder. This Agreement may be amended or modified only by a written agreement executed and delivered by duly authorized officers of Buyer and Seller (on behalf of itself and the Company). This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any amendment by any Party or Parties effected in a manner which does not comply with this Section 10.1 shall be void.
Section 10.2 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile or E-mail (having obtained electronic delivery confirmation thereof), or by registered or certified mail (postage prepaid, return receipt requested) to the other Parties as follows:
To Buyer or Company (after the Closing):
ServiceMax, Inc.
4450 Rosewood Dr. #200
Pleasanton, CA 94588
Attention: [***]
[***]
E-mail: [***]
with a copy (which shall not constitute notice to Buyer) to:
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111-4006
Attention: [***]
E-mail: [***]
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To Seller or Company (prior to the Closing):
Liquid Fire Holdings, LLC
c/o Luminate Capital Partners, LP
1 Letterman Drive CM 500
San Francisco, CA 94129
Attention: [***]
[***]
Email: [***]
[***]
with a copy (which shall not constitute notice to Seller) to:
Kirkland & Ellis LLP
3330 Hillview Avenue
Palo Alto, CA 94304
Attention: [***]
[***]
Facsimile: [***]
E-mail: [***]
[***]
or to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth above.
Section 10.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
Section 10.4 Fees and Expenses. Except as otherwise set forth in this Agreement (including, for the avoidance of doubt, the fees and expenses to be borne by Buyer in accordance with Section 6.3 and Section 6.5), all fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees and disbursements of counsel, financial advisors and accountants, shall be paid by the Party incurring such fees or expenses; provided, that in the event that the transactions contemplated by this Agreement are consummated and the Closing occurs, [***]. For the avoidance of doubt, [***].
Section 10.5 Construction. The headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. No Party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any Party and no presumption or burden of proof will arise favoring or disfavoring any Person by virtue of its authorship of any provision of this Agreement.
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Section 10.6 Exhibits and Schedules. All Exhibits and Schedules, or documents expressly incorporated into this Agreement, are hereby incorporated into this Agreement and are hereby made a part hereof as if set out in full in this Agreement. Any item disclosed in any Schedule referenced by a particular Section in this Agreement shall be deemed to have been disclosed with respect to any other Section in this Agreement if the relevance of such disclosure to such other sections is reasonably apparent on its face and without need to examine the underlying documentation. The specification of any dollar amount in the representations or warranties contained in this Agreement or the inclusion of any specific item in any Schedule is not intended to imply that such amounts, or higher or lower amounts or the items so included or other items, are or are not material, and no Party shall use the fact of the setting of such amounts or the inclusion of any such item in any dispute or controversy as to whether any obligation, items or matter not described herein or included in a Schedule is or is not material for purposes of this Agreement. Any capitalized term used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning given to such term in this Agreement.
Section 10.7 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party and its successors and permitted assigns and, except as provided in Section 6.5 and ARTICLE 9, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.
Section 10.8 Extension; Waiver. At any time prior to the Closing, Seller may, on behalf of itself and the Company, (a) extend the time for the performance of any of the obligations or other acts of Buyer contained herein, (b) waive any inaccuracies in the representations and warranties of Buyer contained herein or in any document, certificate or writing delivered by Buyer pursuant hereto, or (c) waive compliance by Buyer with any of the agreements or conditions contained herein. At any time prior to the Closing, Buyer may (i) extend the time for the performance of any of the obligations or other acts of the Company or Seller contained herein, (ii) waive any inaccuracies in the representations and warranties of the Company and the Seller contained herein or in any document, certificate or writing delivered by the Company or Seller pursuant hereto, or (iii) waive compliance by the Company and Seller with any of the agreements or conditions contained herein. Any agreement on the part of any Party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such Party. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of such rights.
Section 10.9 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any term or other provision of this Agreement (other than Section 9.2) is held to be invalid, illegal or unenforceable under applicable law, all other provisions of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto. Upon such determination that any term or other provision of this Agreement (other than Section 9.2) is invalid, illegal or unenforceable under applicable law, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
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Section 10.10 Counterparts; Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement.
Section 10.11 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH PARTY HEREBY FURTHER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 10.12 Jurisdiction and Venue. Each of the Parties (i) submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) in any action or proceeding arising out of or relating to this Agreement, (ii) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court and (iii) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. Each Party agrees that service of summons and complaint or any other process that might be served in any action or proceeding may be made on such Party by sending or delivering a copy of the process to the Party to be served at the address of the Party and in the manner provided for the giving of notices in Section 10.2. Nothing in this Section 10.12, however, shall affect the right of any Party to serve legal process in any other manner permitted by law. Each Party agrees that a final, non-appealable judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law.
Section 10.13 Remedies. The Parties acknowledge and agree that irreparable harm for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that it does not fully and timely perform its obligations under or in connection with this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement and the Closing) in accordance with its terms. The Parties acknowledge and agree that (i) the other Parties shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, without proof of damages and without posting a bond, prior to the valid termination of this Agreement in accordance with Section 8.1, this being in addition to any other remedy to which
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such other parties are entitled under this Agreement, (ii) the provisions set forth in Section 8.2 (A) are not intended to and do not adequately compensate for the harm that would result from a breach of this Agreement prior to its valid termination and (B) shall not be construed to diminish or otherwise impair in any respect any partys right to an injunction, specific performance, or other equitable relief and (iii) the right to obtain an injunction, specific performance, or other equitable relief is an integral part of the transactions contemplated by this Agreement and without that right, none of the Parties would have entered into this Agreement. Each Party agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other Parties have an adequate remedy at Law.
Section 10.14 Waiver of Conflicts. Recognizing that Kirkland & Ellis LLP has acted as legal counsel to Seller and its Affiliates and the Group Companies prior to the Closing, and that Kirkland & Ellis LLP intends to act as legal counsel to Seller and its Affiliates (which will no longer include the Group Companies) after the Closing, each of Buyer and the Company hereby (i) waives, on its own behalf and agrees to cause its controlled Affiliates to waive, waive any claim they have or may have that Kirkland & Ellis LLP has a conflict of interest or is otherwise prohibited from engaging in such representation and (ii) agree that, in the event that a dispute arises after the Closing between a Group Company and Seller or one of its Affiliates, Kirkland & Ellis LLP may represent Seller or its Affiliates (which will no longer include the Group Companies) in such dispute even though the interests of such Person(s) may be directly adverse to Buyer or any Group Company and even though Kirkland & Ellis LLP may have represented a Group Company in a matter substantially related to such dispute. In addition, all communications involving attorney-client confidences between the Seller, its Affiliates or any Group Company and Kirkland & Ellis LLP in the course of the negotiation, documentation and consummation of the transactions contemplated hereby shall be deemed to be attorney-client confidences that belong solely to Seller and its Affiliates (and not the Group Companies). Accordingly, the Group Companies shall not, without Sellers consent, have access to any such communications, or to the files of Kirkland & Ellis LLP relating to its engagement, whether or not the Closing shall have occurred. Without limiting the generality of the foregoing, upon and after the Closing, (a) Seller and its Affiliates (and not the Group Companies) shall be the sole holders of the attorney-client privilege with respect to such engagement, and none of the Group Companies shall be a holder thereof, (b) to the extent that files of Kirkland & Ellis LLP in respect of such engagement constitute property of the client, only Seller and its Affiliates (and not the Group Companies) shall hold such property rights and (c) Kirkland & Ellis LLP shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to any of the Group Companies by reason of any attorney-client relationship between Kirkland & Ellis LLP and any of the Group Companies or otherwise.
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IN WITNESS WHEREOF, each of the Parties has caused this Unit Purchase Agreement to be duly executed on its behalf as of the day and year first above written.
SELLER: | ||
LIQUID FIRE HOLDINGS, LLC | ||
By: | [***] | |
Name: [***] | ||
Title: [***] | ||
COMPANY: | ||
LIQUID FIRE INTERMEDIATE HOLDINGS, LLC | ||
By: | [***] | |
Name: [***] | ||
Title: [***] |
SIGNATURE PAGE TO UNIT PURCHASE AGREEMENT
BUYER: | ||
SERVICEMAX, INC. | ||
By: | [***] | |
Name: [***] | ||
Title: [***] |
SIGNATURE PAGE TO UNIT PURCHASE AGREEMENT
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement No. 333-258769 of Pathfinder Acquisition Corporation on Form S-4 of our report dated August 12, 2021, relating to the financial statements of ServiceMax, Inc. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Deloitte & Touche LLP |
San Jose, California |
September 16, 2021 |
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the use in the Proxy Statement constituting a part of this Registration Statement on Amendment No. 1 to Form S-4 of our report dated January 27, 2021, relating to the financial statements of Pathfinder Acquisition Corporation, which is contained in that Proxy Statement. We also consent to the reference to us under the caption Experts in the Prospectus.
/s/ WithumSmith+Brown, PC
New York, New York
September 15, 2021
Exhibit 99.1
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Neil Barua | ||
Name: Neil Barua |
Date: September 16, 2021
Exhibit 99.2
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Anthony Zingale |
Name: Anthony Zingale |
Date: September 16, 2021
Exhibit 99.3
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Frank van Veenendaal |
Name: Frank Van Veenendaal |
Date: September 16, 2021
Exhibit 99.4
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Kenneth Hao |
Name: Kenneth Hao |
Date: September 16, 2021
Exhibit 99.5
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Joerg Adams |
Name: Joerg Adams |
Date: September 16, 2021
Exhibit 99.6
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Kyle Paster |
Name: Kyle Paster |
Date: September 16, 2021
Exhibit 99.7
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Felicia Alvaro | ||
Name: Felicia Alvaro |
Date: September 16, 2021
Exhibit 99.8
CONSENT
I hereby consent to serve as a director of Pathfinder Acquisition Corporation (the Company), if elected as such, and to be named as a nominee or potential nominee for director of the Company in any registration statement filed by the Company under the Securities Act of 1933, as amended, including all amendments and post-effective amendments or supplements thereto and any prospectus and/or proxy statement contained therein.
/s/ Callie Field |
Name: Callie Field |
Date: September 16, 2021