Applovin(US:APP)2025-05-07 20:19Purchase Agreement Details - The purchase agreement involves Tripledot and AppLovin, with a closing date set for May 7, 2025[11]. - The agreement includes provisions for the allocation of the purchase price and equitable adjustments[3]. - The agreement outlines conditions to the purchase, including regulatory filings and compliance with laws[4]. - There are specific covenants regarding the conduct of business for both the sellers and purchasers[4]. - The agreement includes indemnification clauses for representations and warranties[5]. - The agreement specifies the need for governmental consents and absence of conflicts[4]. - The transaction is structured to ensure confidentiality and access to information during the closing process[4]. - The Transition Services Agreement will be executed by both Seller Parent and Purchaser Parent at the Closing[19]. - The Purchaser Parent Shareholder Support Agreement will be executed as a condition for Sellers' willingness to enter into the Agreement[20]. Financial Considerations - Purchaser Parent will pay Cash Consideration and Share Consideration to Seller Parent as part of the Equity Purchases[27]. - The Cash Consideration amounts to $400 million plus the Closing Cash Amount and the Closing Net Working Capital Amount, minus the Closing Indebtedness Amount[42]. - The Cash Consideration Payment Amount is set at $150 million[43]. - The Share Consideration consists of 596,869,142 Purchaser Parent Ordinary Shares[49]. - The Closing Cash Amount includes cash, cash equivalents, and liquid marketable securities of the Transferred Companies as of the Measurement Time[44]. - The Closing Indebtedness Amount includes all outstanding indebtedness for borrowed money and other obligations as of the Measurement Time[45]. - The Closing Net Working Capital Amount is calculated based on current assets and liabilities of the Transferred Companies as of the Measurement Time[48]. - The Pre-Closing Statement must be delivered no later than five business days prior to the Closing Date, estimating the Closing Cash Amount, Closing Net Working Capital Amount, and Closing Indebtedness Amount[50]. - The Post-Closing Statement must be prepared within 60 calendar days after the Closing Date, detailing the final calculations of the Closing Cash Amount, Closing Net Working Capital Amount, and Closing Indebtedness Amount[51]. - Seller Parent has a 30-day Review Period to accept or dispute the Post-Closing Statement[52]. - Any disputed items in the Post-Closing Statement must be resolved within a 10-day Resolution Period[53]. - The Final Cash Consideration is determined based on the Closing Cash Amount, Closing Net Working Capital Amount, and Closing Indebtedness Amount, which are deemed final and binding[55]. - If the Final Cash Consideration exceeds the Estimated Cash Consideration, the excess amount (Positive Adjustment) will be satisfied by issuing promissory notes or wire transfer to Seller Parent within five business days[56]. - If the Estimated Cash Consideration exceeds the Final Cash Consideration, the principal balance under the Closing Promissory Note will be automatically reduced by the Negative Adjustment amount[57]. - The determination of the Final Cash Consideration and related adjustments will be the sole remedies for the parties involved[58]. - Purchaser Parent is responsible for all liabilities included in the Closing Net Working Capital Amount and Closing Indebtedness Amount after the Closing[59]. - Any adjustments related to promissory notes will be treated for tax purposes as adjustments to the consideration paid for the Transferred Securities or assets[60]. - Seller Parent may engage a Valuation Firm to determine the fair market value of Purchaser Parent Ordinary Shares for allocation purposes[61]. - The Closing Date Allocation will identify the allocation of Cash Consideration Payment Amount and Share Consideration among Transferred Companies[62]. - The Final Allocation will be binding and delivered no later than sixty days following the determination of the Final Cash Consideration[64]. - Each party must prepare and file Tax Returns consistent with the Final Allocation and take no inconsistent positions in any Tax Audit[64]. Business Financial Statements - The Business Financial Statements for the fiscal year ended December 31, 2024, and the three-month period ended March 31, 2025, have been prepared in accordance with GAAP and fairly present the financial position of the Business[84][85]. - The Transferred Companies and their Subsidiaries do not have any liabilities or obligations that are not reflected in the Business Financial Statements, except for those arising in the ordinary course of business[89]. - Since January 1, 2025, the Transferred Companies have operated in the ordinary course of business consistent with past practices, with no events expected to have a Business Material Adverse Effect[90][91]. - The Business Financial Statements have been derived from the books and records of Seller Parent and its Subsidiaries, ensuring accuracy and compliance with applicable accounting requirements[85]. - The Transferred Companies have maintained internal accounting controls sufficient to provide reasonable assurances regarding the execution of transactions and the safeguarding of assets[86]. Legal and Compliance Matters - The Transferred Companies do not own any real property, and all leased properties are subject to valid and enforceable lease agreements[92]. - The Seller has made available true and correct copies of the Organizational Documents of each of the Subsidiaries of the Transferred Companies[76]. - The Transferred Companies and their Subsidiaries hold valid leasehold interests in all material tangible properties, free and clear of all Liens, except for Permitted Liens[95]. - The material items of equipment owned or leased are adequate for the conduct of business and are in good operating condition[95]. - The Business Registered Intellectual Property is subsisting and not invalid or unenforceable as of the date of the Agreement[98]. - The Transferred Companies have not received any written notice of a pending claim challenging the validity of their Business Registered Intellectual Property[99]. - Each Transferred Company has taken commercially reasonable measures to protect Trade Secrets and confidential information[100]. - The Business Intellectual Property does not infringe upon the Intellectual Property Rights of any Third Person[102]. - The Transferred Companies maintain commercially reasonable measures to protect their Business Systems against unauthorized access and security incidents[109]. - The execution of the Agreement does not conflict with any Privacy Obligations[108]. - The Transferred Companies have been in compliance with applicable Privacy Policies and Privacy Laws for the past three years[107]. - There have been no failures or adverse events affecting the Business Systems that have not been remedied in all material respects[109]. - The Transferred Companies have not been in material breach or default under any Business Material Contract as of the date of the Agreement[118]. - No Transferred Company has received written notice of any material breach or default under any Business Material Contract[118]. - The Transferred Companies and their Subsidiaries have been operated in compliance with all Environmental Laws during the three years prior to the date of the Agreement[122]. - There are no pending or threatened actions by any Governmental Authority against the Transferred Companies or their Subsidiaries[128]. - No Transferred Company is subject to any Order material to its operations as of the date of the Agreement[128]. - The Transferred Companies have not made any voluntary or compelled disclosure to any Governmental Authority regarding non-compliance with Anticorruption Laws[124]. - Each material Permit required for the operation of the business is in full force and effect[127]. - The Transferred Companies have not disposed of or arranged for the disposal of any Hazardous Substances in violation of Environmental Laws[122]. - The Transferred Companies have maintained adequate policies and procedures to promote compliance with Anticorruption Laws[125]. - The Seller Disclosure Schedule includes a complete list of all material insurance policies held by the Transferred Companies, ensuring compliance with applicable laws[129]. - All material insurance policies maintained by the Transferred Companies are in full force, with all premiums paid, and no breaches or defaults reported[131]. Employee and Labor Matters - The Seller Parent has provided true and complete copies of all material Business Employee Plans, including annual reports and testing results[133]. - Each Business Employee Plan has been maintained in accordance with applicable laws, with no prohibited transactions reported[134]. - There are no pension plans or multiemployer plans maintained by the Transferred Companies, and no liabilities under Title IV of ERISA are expected[136]. - No post-employment obligations exist for any Transferred Company Plan, except as required by COBRA[137]. - The execution of this Agreement will not result in any excess parachute payments or other obligations to service providers[138]. - Each nonqualified deferred compensation plan complies with Section 409A of the Code[139]. - Foreign Plans have been approved by relevant authorities, and their financial statements accurately reflect liabilities and contributions[141]. - The Transferred Companies have been in compliance with labor laws for the past four years, with no material labor disputes pending[144]. - The Transferred Companies and their Subsidiaries have timely filed all material Tax Returns required under applicable Law, ensuring they are true, complete, and correct in all material respects[150]. - There are no pending or threatened Actions against the Transferred Companies or their Subsidiaries concerning compliance with Employment Laws in the past three years[146]. - None of the Transferred Companies or their Subsidiaries has engaged in any actions constituting a "plant closing" or "mass layoff" under the WARN Act in the past three years[148]. Supplier and Asset Matters - The top ten suppliers for the fiscal year ended December 31, 2024, have not indicated any intention to terminate existing contracts with the Transferred Companies[166]. - The assets held by the Transferred Companies and their Subsidiaries are sufficient to conduct the Business immediately following the Closing[167]. - None of the Transferred Companies or their Subsidiaries has been delinquent in the payment of any material Tax[152]. - There are no Liens on the assets of any Transferred Companies or Subsidiaries relating to Taxes, other than Permitted Liens[159]. - Each Transferred Company is not classified as a "person of a country of concern" under the Outbound Investment Security Program[168]. - The Transferred Companies have complied with all applicable escheatment or unclaimed property laws in material respects[157]. - No audit or examination of any material Tax Return of any Transferred Company is currently in progress or pending[158]. Purchaser Parent Financials - Purchaser Parent's financial statements for the fiscal year ended December 31, 2023, have been made available, including unaudited balance sheets and statements of operations[180]. - The Purchaser Parent Financial Statements fairly present the financial position and results of operations, subject to year-end adjustments[181]. - As of the date of the agreement, Purchaser Parent does not have any liabilities required to be reflected on a balance sheet, except for those disclosed in the financial statements[183]. - Upon issuance, the Purchaser Parent Ordinary Shares constituting the Share Consideration will be duly authorized, validly issued, fully paid, and non-assessable[184]. - Purchaser Parent will have adequate financial resources to satisfy its monetary obligations under the agreement and operate the business at a commercially acceptable level following the closing[185]. - Purchaser Parent does not have debts exceeding the fair saleable value of its assets, indicating solvency[186]. - The Purchasers and their Subsidiaries have operated in compliance with applicable laws and have not been under investigation for violations[187]. - Since January 1, 2025, there have been no events that would reasonably be expected to have a material adverse effect on Purchaser Parent[188]. - The Share Consideration issued to Seller Parent will constitute no less than 19.99% of the Purchaser Parent Fully-Diluted Shares immediately following the closing[177]. - All necessary corporate approvals for the transactions have been duly obtained and are in full force and effect as of the closing[173]. - Purchaser Parent is not classified as a "person of a country of concern" under the Outbound Investment Security Program[189]. - Purchaser Parent does not operate in any of the 17 sectors outlined in the UK National Security and Investment Act 2021[190]. - No Purchaser or their Affiliates are involved in any pending transactions that could materially delay obtaining necessary governmental approvals[191]. - As of the agreement date, there are no pending or threatened actions against Purchaser or its subsidiaries that could be material[192]. - Purchaser Parent and its subsidiaries have filed all required material tax returns, which are accurate in all material respects[193]. - All material taxes required to be paid by Purchaser Parent and its subsidiaries have been paid, including timely payments to tax authorities[194]. - There are no ongoing audits of material tax returns for Purchaser Parent or its subsidiaries[195]. - Purchaser Parent is not expected to be classified as a "passive foreign investment company" for the current taxable year[196]. - Purchaser Parent is a foreign corporation for U.S. federal income tax purposes and will not be treated as a "surrogate foreign corporation" after the closing[198]. - There are no financial advisors or brokers entitled to fees in connection with the transactions, except as disclosed[199].