Payment of the Merger Consideration. The aggregate consideration payable to all Shareholders with respect to their Company Shares shall be calculated at five (5) times audited 2005 EBIT of the Company, plus certain agreed-upon adjustments identified in Schedule C attached hereto, less the Transaction Expenses (the "MERGER CONSIDERATION"). (a) The Merger Consideration shall be payable to each Shareholder as follows: (i) Thirty (30%) percent of the Merger Consideration in cash (the "CASH CONSIDERATION") multipled by such Shareholder's Payout Ratio, with an additional adjustment reducing the cash payable to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $100,000 and increasing the cash payble to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $50,000 each; (ii) a non-negotiable two (2) year subordinated note issued by Merger Sub bearing annual interest at US prime, payable quarterly, and guaranteed by the Purchaser after the Effective Time, each in substantially in the form attached hereto as EXHIBIT A (each a "NOTE," and, collectively, the "NOTES"), the principal amount of which Note shall be equal to 20% of the Merger Consideration multiplied by such Shareholder's Payout Ratio; (iii) a number of Purchaser's common shares (each a "PURCHASER COMMON SHARE," and collectively, the "PURCHASER COMMON SHARES") equal to such Shareholder's Purchaser Share Consideration Amount; (1) multiplied by 50%, divided by (2) the Market Price. A portion of the Purchaser Common Shares shall be made part of the Escrow Shares as defined in Section 3.3 below. (iv) 700 shares of Series C Preferred Stock (each a "PURCHASER PREFERRED SHARE," and collectively, the "PURCHASER PREFERRED SHARES" and with the Purchaser Common Shares, the "PURCHASER SHARES") each Purchaser Preferred Share having a liquidation value equal to $1,000 convertible into Common Shares as set forth in the Certificate of Designation. A portion of the Purchaser Preferred Shares shall be made part of the Escrow Shares as defined in Section 3.3 below. Such Preferred Purchaser Shares shall have the rights, privileges and designations more fully set forth in that Certificate of Designation attached hereto as EXHIBIT B, but such Preferred Shares shall entitle the holder at his/her option to convert the Preferred Shares into Common Stock after one year based on the Market Price at the time of conversion . (b) Prior to Closing, the Company shall provide to Purchaser a schedule containing the calculation of the payments by type and amount to the Shareholders, which schedule shall be subject to the review and approval of the Purchaser. Following agreement of the Parties on such schedule, it shall be attached hereto as an addendum to Schedule 2.7(b) (the "PAYOUT SPREADSHEET"), and the parties shall be entitled to rely on the Payout Spreadsheet. In the event of any conflict between Section 2.7(a) and the Payout Spreadsheet, the Payout Spreadsheet shall control.
Appears in 1 contract
Sources: Merger Agreement (Thinkpath Inc)
Payment of the Merger Consideration. The aggregate total consideration payable to all Shareholders with respect to their for the Company Shares (collectively, the "Merger Consideration") and the total consideration paid to Sellers pursuant to the Purchase Agreement shall be calculated at as follows:
(a) Within five (5) times audited 2005 EBIT Business Days after the Closing Date, Purchaser shall issue to Stockholders and Sellers and deliver to the Escrow Agent certificates representing the Indemnity Shares and the Earn-Out Shares to be held in accordance with the provisions of the CompanyEscrow Agreement, plus certain agreed-upon adjustments identified in Schedule C attached hereto, less and shall issue and deliver to Stockholders and Sellers the Transaction Expenses (the "MERGER CONSIDERATION").
(a) The Merger Consideration shall be payable to each Shareholder number of Remaining Shares determined as follows:
(i) Thirty if the Closing Average Share Price multiplied by 8,250,000 is less than or equal to $60,000,000, then fifty percent (3050%) percent of the Merger Consideration in cash Remaining Shares shall be issued to Stockholders and fifty percent (50%) of the "CASH CONSIDERATION") multipled by such Shareholder's Payout Ratio, with an additional adjustment reducing the cash payable Remaining Shares shall be issued to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $100,000 and increasing the cash payble to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $50,000 eachSellers;
(ii) a non-negotiable two if the Closing Average Share Price multiplied by 8,250,000 is greater than $60,000,000 but less than or equal to $100,000,000, then (2A) year subordinated note issued the first $60,000,000 in value of the Remaining Shares (computed by Merger Sub bearing annual interest at US prime, payable quarterly, and guaranteed multiplying the Closing Average Share Price by the Purchaser after the Effective Time, each in substantially in the form attached hereto as EXHIBIT A (each a "NOTE," and, collectively, the "NOTES"), the principal amount number of which Note Remaining Shares) shall be equal issued fifty percent (50%) to 20% Stockholders and fifty percent (50%) to Sellers and (B) the balance of the Merger Consideration multiplied by such Shareholder's Payout Ratio;Remaining Shares shall be issued seventy-five percent (75%) to Stockholders and twenty-five percent (25%) to Sellers; or
(iii) a if the Closing Average Share Price multiplied by 8,250,000 is greater than $100,000,000, then (A) the first $60,000,000 in value of the Remaining Shares (computed by multiplying the Closing Average Share Price by the number of Remaining Shares) shall be issued fifty percent (50%) to Stockholders and fifty percent (50%) to Sellers, (B) the next $40,000,000 in value of the Remaining Shares (computed by multiplying the Closing Average Share Price by the number of Remaining Shares) shall be issued seventy-five percent (75%) to Stockholders and twenty-five percent (25%) to Sellers and (C) the balance of the Remaining Shares shall be issued sixty percent (60%) Stockholders and forty percent (40%) to Sellers.
(b) Within five (5) Business Days after the date the Closing Date Balance Sheet becomes final and binding in accordance with Section 2.3, if Net Worth is less than $2,000,000, Stockholders shall cause Bankstream to pay such deficiency to Purchaser and, if such deficiency is not so timely paid to Purchaser, Purchaser and the Stockholders Representative shall, at Purchaser's common shares (each a "PURCHASER COMMON SHARE," request and collectivelyoption, immediately instruct the "PURCHASER COMMON SHARES") Escrow Agent to deliver to Purchaser the number of Indemnity Shares equal to the quotient obtained by dividing (i) the amount of such Shareholder's deficiency by (ii) the Closing Average Share Price.
(c) On the first anniversary of the Closing Date, Purchaser Share Consideration Amount; and the Stockholders Representative shall instruct the Escrow Agent to deliver to Stockholders and Sellers certificates representing (i) the Indemnity Shares less (ii) the sum of (A) the number of Indemnity Shares delivered to Purchaser pursuant to Section 2.2(b) and (B) the number of Indemnity Shares equal to the quotient obtained by dividing (1) multiplied any amounts necessary to satisfy any claims theretofore asserted by 50%, divided any Purchaser Indemnified Party pursuant to Article X and resolved pursuant to the provisions thereof and any amounts deemed by Purchaser and the Stockholders Representative reasonably necessary to satisfy any claims theretofore asserted by any Purchaser Indemnified Party pursuant to Article X and not yet resolved pursuant to the provisions thereof by (2) the Market Closing Average Share Price. A portion of the Purchaser Common Shares shall be made part of the Escrow Shares as defined in Section 3.3 below.
(ivd) 700 shares Within five (5) Business Days after the Earn-Out Statement becomes final and binding in accordance with Section 2.4, Purchaser and the Stockholders Representative shall instruct the Escrow Agent to (i) deliver to Stockholders and Sellers certificates representing (A) the Accrued Earn-Out Shares less (B) the number of Series C Preferred Stock (each a "PURCHASER PREFERRED SHARE," and collectively, the "PURCHASER PREFERRED SHARES" and with the Purchaser Common Shares, the "PURCHASER SHARES") each Purchaser Preferred Share having a liquidation value Earn-Out Indemnity Shares equal to $1,000 convertible into Common the quotient obtained by dividing (y) any amounts deemed by Purchaser and the Stockholders Representative reasonably necessary to satisfy any claims theretofore asserted by any Purchaser Indemnified Party pursuant to Article X and not yet resolved pursuant to the provisions thereof by (z) the Closing Average Share Price and (ii) to deliver to Purchaser the remainder obtained by subtracting (A) the Accrued Earn Out Shares as set forth in from (B) the Certificate of Designation. A portion of the Purchaser Preferred Shares shall be made part of the Escrow Shares as defined in Section 3.3 below. Such Preferred Purchaser Shares shall have the rights, privileges and designations more fully set forth in that Certificate of Designation attached hereto as EXHIBIT B, but such Preferred Shares shall entitle the holder at his/her option to convert the Preferred Shares into Common Stock after one year based on the Market Price at the time of conversion Earn-Out Shares.
(be) Prior to Closing, All certificates for Shares issued hereunder shall be in such names and denominations as the Company Stockholders Representative and the Sellers Representative shall provide designate to Purchaser a schedule containing or the calculation Escrow Agent, as the case may be, no later than two (2) Business Days before such issuance is required hereunder. Purchaser shall promptly take all actions reasonably requested by the Stockholders Representative to correct any mistake made in the names or denominations of the payments such certificates.
(f) Any Shares delivered to Purchaser under this Section 2.2 shall be treated by type Purchaser, Stockholders and amount Sellers as an adjustment to the Shareholders, which schedule shall be subject to the review and approval of the Purchaser. Following agreement of the Parties on such schedule, it shall be attached hereto as an addendum to Schedule 2.7(b) (the "PAYOUT SPREADSHEET"), and the parties shall be entitled to rely on the Payout Spreadsheet. In the event of any conflict between Section 2.7(a) and the Payout Spreadsheet, the Payout Spreadsheet shall controlMerger Consideration.
Appears in 1 contract
Payment of the Merger Consideration. The aggregate consideration payable to all Shareholders with respect to their Company Shares shall be calculated at five (5) times audited 2005 EBIT of At the CompanyClosing and as set forth on the Consideration Spreadsheet, plus certain agreed-upon adjustments identified in Schedule C attached hereto, less the Transaction Expenses (the "MERGER CONSIDERATION").
(a) The Merger Consideration shall be is payable to each Shareholder as follows:
(i) Thirty (30%) percent of the Initial Cash Merger Consideration will be distributed in cash the following manner:
(A) an amount equal to $2,000,000 (the "CASH CONSIDERATION"“Purchase Price Adjustment Escrow Amount”) multipled by such Shareholder's Payout Ratio, will be deposited in an escrow account in accordance with an additional adjustment reducing the cash payable Purchase Price Adjustment Escrow Agreement and allocated to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $100,000 and increasing the cash payble to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $50,000 eachSelling Shareholders as set forth on the Consideration Spreadsheet;
(iiB) a non-negotiable two (2) year subordinated note issued by Merger Sub bearing annual interest at US prime, payable quarterly, and guaranteed by the Purchaser after the Effective Time, each in substantially in the form attached hereto as EXHIBIT A (each a "NOTE," and, collectively, the "NOTES"), the principal an amount of which Note shall be equal to 20% of $3,000,000 (the Merger “Indemnity Escrow Amount”) will be deposited in an escrow account to be held and disbursed in accordance with the Indemnity Escrow Agreement and allocated to the Selling Shareholders as set forth on the Consideration multiplied by such Shareholder's Payout RatioSpreadsheet;
(iiiC) a number of Purchaser's common shares (each a "PURCHASER COMMON SHARE," and collectively, the "PURCHASER COMMON SHARES") equal to such Shareholder's Purchaser Share Consideration Amount; (1) multiplied by 50%, divided by (2) the Market Price. A portion of the Purchaser Common Shares shall be made part of the Escrow Shares as defined in Section 3.3 below.
(iv) 700 shares of Series C Preferred Stock (each a "PURCHASER PREFERRED SHARE," and collectively, the "PURCHASER PREFERRED SHARES" and with the Purchaser Common Shares, the "PURCHASER SHARES") each Purchaser Preferred Share having a liquidation value an amount equal to $1,000 convertible into Common Shares 5,000,000 (the “Excluded Liabilities Escrow Amount”) will be deposited in an escrow account to be held and disbursed in accordance with the Excluded Liabilities Escrow Agreement and allocated to the Selling Shareholders as set forth on the Consideration Spreadsheet;
(D) an amount equal to the Expense Fund will be deposited in an account to be held by the Certificate Shareholder Representative in accordance with the terms of Designation. A portion this Agreement; and
(E) the remainder of the Purchaser Preferred Shares shall be made part of Initial Cash Merger Consideration (after deducting the Escrow Shares as defined amounts in Section 3.3 below. Such Preferred Purchaser Shares shall have the rightsclauses (A), privileges and designations more fully set forth in that Certificate of Designation attached hereto as EXHIBIT (B), but such Preferred Shares shall entitle the holder at his/her option to convert the Preferred Shares into Common Stock after one year based on the Market Price at the time of conversion .
(b) Prior to Closing, the Company shall provide to Purchaser a schedule containing the calculation of the payments by type and amount to the Shareholders, which schedule shall be subject to the review and approval of the Purchaser. Following agreement of the Parties on such schedule, it shall be attached hereto as an addendum to Schedule 2.7(b) (the "PAYOUT SPREADSHEET"C), and (D) above), to be apportioned and paid to the parties shall be entitled to rely Selling Shareholders in the amounts set forth on the Payout Spreadsheet. In Consideration Spreadsheet (such amount, the event of any conflict between Section 2.7(a“Closing Date Cash Merger Consideration”) and in accordance with the Payout Spreadsheetprovisions of this Section 1.7; At the Closing, Buyer shall deposit in escrow with the Payout Spreadsheet shall controlEscrow Agent (x) the Purchase Price Adjustment Escrow Amount to be held in accordance with the Purchase Price Adjustment Escrow Agreement, (y) the Indemnity Escrow Amount to be held in accordance with the Indemnity Escrow Agreement, and (z) the Excluded Liabilities Escrow Amount to be held in accordance with the Excluded Liabilities Escrow Agreement.
Appears in 1 contract
Payment of the Merger Consideration. The aggregate consideration payable to all Shareholders with respect to their Company Shares shall be calculated at five (5) times audited 2005 EBIT of the Company, plus certain agreed-upon adjustments identified in Schedule C attached hereto, less the Transaction Expenses (the "MERGER CONSIDERATION").
(a) The Merger Consideration shall be payable paid by the Purchaser to each Shareholder the Equityholders as follows:
(a) At the Closing, the Purchaser shall pay to the Equityholders and other parties as directed in writing by the Equityholders up to ten million five hundred thousand dollars ($10,500,000) (the “Closing Merger Consideration”), consisting of:
(i) Thirty five million five hundred fifty thousand dollars (30%$5,550,000), payable in cash and allocated among the Equityholders in accordance with their respective Pro Rata Shares, the amount of which shall be: (A) percent reduced, on a dollar-for-dollar basis, by the amount of any Excluded Liabilities, and (B) subject to adjustment pursuant to Section 1.9(a) in connection with a NWC adjustment (the “Closing Cash Merger Consideration”). For the avoidance of doubt, the Closing Cash Merger Consideration in cash (shall not be adjusted with respect to the "CASH CONSIDERATION") multipled by such Shareholder's Payout Ratio, with an additional adjustment reducing the cash payable to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $100,000 and increasing the cash payble to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $50,000 each;Company Valuation; and
(ii) up to four million nine hundred fifty thousand dollars ($4,950,000), payable in shares of Purchaser Stock and allocated among the Equityholders in accordance with their respective Pro Rata Shares, the amount of which shall be reduced, on a nondollar-negotiable two for-dollar basis, by the amount by which the valuation of the Company (the “Company Valuation”), calculated based on: (1) the Company’s 2018 unaudited pro forma financial statements and audited financial statements for the 2019 and 2020 fiscal years (the “2020 Audit”), (2) year subordinated note issued by Merger Sub bearing annual interest at US prime, payable quarterlySchedules B and C hereto, and guaranteed (3) the other provisions of this Agreement, is less than ten million five hundred thousand dollars ($10,500,000) (the “Closing Shares Merger Consideration”). Notwithstanding anything to the contrary in the foregoing: (I) if the 2020 Audit has not been completed by the Closing Date, the Closing Shares Merger Consideration shall be paid by the Purchaser to the Equityholders within fifteen (15) days after completion of the Effective Time2020 Audit, each and (II) if the Closing Shares Merger Consideration is disputed by the parties as provided in substantially in the form attached hereto as EXHIBIT A (each a "NOTE," and, collectively, the "NOTES"Section 1.6(c), then the principal amount of which Note Closing Shares Merger Consideration shall be equal paid by the Purchaser to 20% the Equityholders within fifteen (15) days after determination of the Final Closing Shares Merger Consideration multiplied by such Shareholder's Payout Ratio;
(iii) a number of Purchaser's common shares (each a "PURCHASER COMMON SHARE," and collectively, the "PURCHASER COMMON SHARES") equal pursuant to such Shareholder's Purchaser Share Consideration Amount; (1) multiplied by 50%, divided by (2) the Market Price. A portion of the Purchaser Common Shares shall be made part of the Escrow Shares as defined in Section 3.3 below.
(iv) 700 shares of Series C Preferred Stock (each a "PURCHASER PREFERRED SHARE," and collectively, the "PURCHASER PREFERRED SHARES" and with the Purchaser Common Shares, the "PURCHASER SHARES") each Purchaser Preferred Share having a liquidation value equal to $1,000 convertible into Common Shares as set forth in the Certificate of Designation. A portion of the Purchaser Preferred Shares shall be made part of the Escrow Shares as defined in Section 3.3 below. Such Preferred Purchaser Shares shall have the rights, privileges and designations more fully set forth in that Certificate of Designation attached hereto as EXHIBIT B, but such Preferred Shares shall entitle the holder at his/her option to convert the Preferred Shares into Common Stock after one year based on the Market Price at the time of conversion 1.6(c).
(b) Prior to ClosingIn the event that the Company Valuation, calculated based on the 2020 Audit, Schedules B and C hereto and the other provisions of this Agreement, is less than ten million five hundred thousand dollars ($10,500,000), then, within fifteen (15) days after completion of the audit of the Company’s financial statements for its 2019, 2020 and 2021 fiscal years (the “2021 Audit”), the Purchaser shall pay to the Equityholders, the amount by which the Company Valuation, calculated based on: (1) the 2021 Audit, (2) Schedules B and C hereto, and (3) the other provisions of this Agreement, exceeds the sum of: (i) five million five hundred fifty thousand dollars ($5,550,000); plus (ii) the amount of Closing Shares Merger Consideration paid to the Equityholders pursuant to Section 1.6(a)(ii) (the “Post-Closing Shares Merger Consideration”). Notwithstanding anything to the contrary in the foregoing, if the Post-Closing Shares Merger Consideration is disputed by the parties as provided in Section 1.6(d), then the Post-Closing Shares Merger Consideration shall be paid by the Purchaser to the Equityholders within fifteen (15) days after determination of the Final Post-Closing Shares Merger Consideration pursuant to Section 1.6(d).
(c) Notwithstanding anything to the contrary in Section 1.6(a)(ii), the parties agree that the Closing Shares Merger Consideration amount shall be determined as set forth in this Section 1.6(c). The Purchaser shall, within fifteen (15) days after completion of the 2020 Audit, provide to the Equityholders its calculation of the Company Valuation, measured based on the 2020 Audit, and the resulting amount of Closing Shares Merger Consideration, which shall: (i) be prepared in accordance with Schedules B and (C); and (ii) include reasonable support for the calculations made therein (the “Closing Shares Merger Consideration Statement”). If the Equityholders disagree with the Closing Shares Merger Consideration Statement, they may, within fifteen (15) days after their receipt of the Closing Shares Merger Consideration Statement, provide written notice thereof to the Purchaser (the “Closing Shares Merger Consideration Dispute Notice”), which shall provide reasonable detail concerning each item that they dispute on the Closing Shares Merger Consideration Statement and include reasonable support for each such position. During the fifteen (15) day negotiation period described below and any subsequent time period in which the Closing Shares Merger Consideration Statement is being disputed as provided below in this Section 1.6(c), the Purchaser shall provide the Equityholders and their representatives with reasonable access, upon reasonable notice and during times mutually and reasonably agreeable to the Purchaser and the Equityholders, to the books, records and working papers of the Company related to the calculations underlying the Closing Shares Merger Consideration Statement. To the extent that the Equityholders do not deliver a schedule containing Closing Shares Merger Consideration Dispute Notice to the Purchaser within such fifteen (15) day period, the Closing Shares Merger Consideration set forth in the Closing Shares Merger Consideration Statement shall be conclusively deemed the “Final Closing Shares Merger Consideration” and shall be final and binding upon all parties. For a period of fifteen (15) days after receipt by the Purchaser of a Closing Shares Merger Consideration Dispute Notice, the Purchaser and the Equityholders shall use good faith commercially reasonable efforts to negotiate and resolve the disputed items on the Closing Shares Merger Consideration Dispute Notice between themselves and, if they are able to resolve all of such disputed items during such time period, the Closing Shares Merger Consideration Statement shall be revised to the extent necessary to reflect such resolution, and the Closing Shares Merger Consideration set forth therein shall be conclusively deemed the “Final Closing Shares Merger Consideration” and shall be final and binding upon all parties. If the Purchaser and the Equityholders are unable to resolve all of the disputed items on a Closing Shares Merger Consideration Dispute Notice within such fifteen (15) day negotiation period, they shall jointly engage a nationally-recognized accounting firm with no prior relationship with any of the parties or any of their respective Affiliates to be reasonably agreed upon by the parties between the date hereof and the Closing Date (the “Independent Accountants”), and submit the disputed items to the Independent Accountants for resolution. The Independent Accountants shall act as experts and not arbiters and shall determine only those items on the Closing Shares Merger Consideration Statement being disputed by the Purchaser and the Equityholders as of the time of engagement of the Independent Accountants. The Purchaser and the Equityholders shall instruct the Independent Accountants to not assign a dollar amount to any item in dispute greater than the greatest dollar amount for such item assigned by the Purchaser, on the one hand, or the Equityholders, on the other hand (as applicable), or less than the dollar amount for such item assigned by the Purchaser, on the one hand, or the Equityholders, on the other hand (as applicable). Promptly, but no later than thirty (30) days after engagement, the Independent Accountants shall deliver a written report to the Purchaser and the Equityholders as to their resolution of the disputed items, which include the resulting Closing Shares Merger Consideration Statement incorporating such resolution. The Closing Shares Merger Consideration Statement, as determined by the Independent Accountants, shall be conclusively deemed the “Final Closing Shares Merger Consideration Statement” and the Closing Shares Merger Consideration amount set forth therein shall be conclusively deemed the “Final Closing Shares Merger Consideration” and shall be final and binding upon all parties. The fees and expenses of the Independent Accountants incurred in connection with the resolution of any dispute pursuant to this Section 1.6(c) shall be borne by the Purchaser, on the one hand, or the Equityholders, on the other hand (allocated among them in accordance with their respective Pro Rata Shares), in proportion to the amounts of the disputed items on the Closing Shares Merger Consideration Dispute Notice, as compared to such items as determined by the Independent Accountants and set forth on its Final Closing Shares Merger Consideration Statement. For further clarity: (i) if the Independent Accountants agree with the positions taken by the Purchaser in connection with a dispute among the parties concerning calculation of the Closing Shares Merger Consideration, rather than agreeing with the positions taken by the Equityholders, then the Independent Accountants’ fees and expenses will be borne by the Equityholders; and (ii) conversely, if the Independent Accountants agree with the positions taken by the Equityholders, rather than agreeing with the positions taken by the Purchaser, then the Independent Accountants’ fees and expenses will be paid by the Purchaser. Payment of the Independent Accountants’ fees and expenses shall be made by the applicable part(ies) within thirty (30) days after the Independent Accountants’ determination of the Final Closing Shares Merger Consideration.
(d) Notwithstanding anything to the contrary in Section 1.6(b), the parties agree that the Post-Closing Shares Merger Consideration amount shall be determined as set forth in this Section 1.6(d). The Purchaser shall, within fifteen (15) days after completion of the 2021 Audit, provide to the Equityholders its calculation of the Company Valuation, measured based on the 2021 Audit, and the resulting amount of Post-Closing Shares Merger Consideration, which shall: (i) be prepared in accordance with Schedules B and C; and (ii) include reasonable support for the calculations made therein (the “Post-Closing Shares Merger Consideration Statement”). If the Equityholders disagree with the Post-Closing Shares Merger Consideration Statement, they may, within fifteen (15) days after their receipt of the Post-Closing Shares Merger Consideration Statement, provide written notice thereof to the Purchaser (the “Post-Closing Shares Merger Consideration Dispute Notice”), which shall provide reasonable detail concerning each item that they dispute on the Post-Closing Shares Merger Consideration Statement and include reasonable support for each such position. During the fifteen (15) day negotiation period described below and any subsequent time period in which the Post-Closing Shares Merger Consideration Statement is being disputed as provided below in this Section 1.6(d), the Purchaser shall provide the Equityholders and their representatives with reasonable access, upon reasonable notice and during times mutually and reasonably agreeable to the Purchaser and the Equityholders, to the books, records and working papers of the Company related to the calculations underlying the Post-Closing Shares Merger Consideration Statement. To the extent that the Equityholders do not deliver a Post-Closing Shares Merger Consideration Dispute Notice to the Purchaser within such fifteen (15) day period, the Post-Closing Shares Merger Consideration set forth set forth in the Post-Closing Shares Merger Consideration Statement shall be conclusively deemed the “Final Post-Closing Shares Merger Consideration” and shall be final and binding upon all parties. For a period of fifteen (15) days after receipt by the Purchaser of a Post-Closing Shares Merger Consideration Dispute Notice, the Purchaser and the Equityholders shall use good faith commercially reasonable efforts to negotiate and resolve the disputed items on the Post-Closing Shares Merger Consideration Dispute Notice between themselves and, if they are able to resolve all of such disputed items during such time period, the Post-Closing Shares Merger Consideration Statement shall be revised to the extent necessary to reflect such resolution, and the Post-Closing Shares Merger Consideration set forth therein shall be conclusively deemed the “Final Post-Closing Shares Merger Consideration” and shall be final and binding upon all parties. If the Purchaser and the Equityholders are unable to resolve all of the disputed items on a Post-Closing Shares Merger Consideration Dispute Notice within such fifteen (15) day negotiation period, they shall jointly engage the Independent Accountants and submit the disputed items to the Independent Accountants for resolution. The Independent Accountants shall act as experts and not arbiters and shall determine only those items on the Post-Closing Shares Merger Consideration Statement being disputed by the Purchaser and the Equityholders as of the time of engagement of the Independent Accountants. The Purchaser and the Equityholders shall instruct the Independent Accountants to not assign a dollar amount to any item in dispute greater than the greatest dollar amount for such item assigned by the Purchaser, on the one hand, or the Equityholders, on the other hand (as applicable), or less than the dollar amount for such item assigned by the Purchaser, on the one hand, or the Equityholders, on the other hand (as applicable). Promptly, but no later than thirty (30) days after engagement, the Independent Accountants shall deliver a written report to the Purchaser and the Equityholders as to their resolution of the disputed items, which include the resulting Post-Closing Shares Merger Consideration Statement incorporating such resolution. The Post-Closing Shares Merger Consideration Statement, as determined by the Independent Accountants, shall be conclusively deemed the “Final Post-Closing Shares Merger Consideration Statement” and the Post-Closing Shares Merger Consideration amount set forth therein shall be conclusively deemed the “Final Post-Closing Shares Merger Consideration” and shall be final and binding upon all parties. The fees and expenses of the Independent Accountants incurred in connection with the resolution of any dispute pursuant to this Section 1.6(d) shall be borne by the Purchaser, on the one hand, or the Equityholders, on the other hand (allocated among them in accordance with their respective Pro Rata Shares), in proportion to the amounts of the disputed items on the Post-Closing Shares Merger Consideration Dispute Notice, as compared to such items as determined by the Independent Accountants and set forth on its Final Post-Closing Shares Merger Consideration Statement. For further clarity: (i) if the Independent Accountants agree with the positions taken by the Purchaser in connection with a dispute among the parties concerning calculation of the Post-Closing Shares Merger Consideration, rather than agreeing with the positions taken by the Equityholders, then the Independent Accountants’ fees and expenses will be borne by the Equityholders; and (ii) conversely, if the Independent Accountants agree with the positions taken by the Equityholders, rather than agreeing with the positions taken by the Purchaser, then the Independent Accountants’ fees and expenses will be paid by the Purchaser. Payment of the Independent Accountants’ fees and expenses shall be made by the applicable part(ies) within thirty (30) days after the Independent Accountants’ determination of the Final Post-Closing Shares Merger Consideration.
(e) For purposes of this Agreement, the Purchaser Stock comprising the Closing Shares Merger Consideration and the Post-Closing Shares Merger Consideration shall be valued based on a twenty-five million dollar ($25,000,000) valuation of the Purchaser (the “Purchaser Stock Valuation Amount”).
(f) For further clarity, an example of the calculation of the payments by type and amount Merger Consideration pursuant to the Shareholders, which schedule shall be subject to the review and approval of the Purchaser. Following agreement of the Parties on such schedule, it shall be this Section 1.6 is attached hereto as an addendum Schedule C. For the avoidance of doubt, the amount for the Company’s 2018 fiscal year under the Adjusted EBITDA column in Schedule C is agreed to Schedule 2.7(b) (the "PAYOUT SPREADSHEET"), and confirmed by the parties shall be entitled and is not subject to rely on the Payout Spreadsheet. In the event of further negotiation or adjustment.
(g) Notwithstanding any conflict between Section 2.7(a) and the Payout Spreadsheet, the Payout Spreadsheet shall control.ot
Appears in 1 contract
Sources: Merger Agreement (Data Storage Corp)
Payment of the Merger Consideration. The At the Closing, Buyer shall (1) remit to the Company the aggregate consideration payable to all Shareholders with respect to their Company Shares shall be calculated at five (5) times audited 2005 EBIT amount of the CompanyOption Payments, plus certain agreedif any, which the Company shall disburse through its payroll system to each In-upon adjustments identified the-Money Option Holder entitled to receive an Option Payment, subject to applicable withholding Tax and such Option Holder executing and returning a release in Schedule C attached heretoform acceptable to Buyer, less the Transaction Expenses Company and the Stockholders’ Representative, and (2) remit to the Paying Agent, by wire transfer of immediately available funds, an aggregate amount in cash (the "MERGER CONSIDERATION").
“Closing Date Payment Amount”) equal to (ax) The the Estimated Merger Consideration Amount; minus (y) the aggregate amount of the Option Payments, if any, minus (z) the Adjustment Escrow Amount and the Indemnity Escrow Amount. To the extent that a Stockholder (other than a holder of Dissenting Shares) delivers a duly executed Letter of Transmittal in accordance with Section 2.6(c), the Paying Agent shall be payable distribute the Closing Date Payment Amount to each Shareholder as followsthe Stockholders (other than holders of Dissenting Shares) in the following order of priority:
(i) Thirty (30%) percent first, the Paying Agent shall pay to each Series A Preferred Stockholder the Pro Rata Amount of the Merger Consideration in cash (aggregate Series A Liquidation Amounts with respect to the "CASH CONSIDERATION") multipled shares of Series A Preferred Stock held by such Shareholder's Payout Ratio, with an additional adjustment reducing the cash payable to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $100,000 and increasing the cash payble to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by $50,000 eachSeries A Preferred Stockholder;
(ii) next, only to the extent a non-negotiable two (2) year subordinated note issued by Merger Sub bearing annual interest at US prime, payable quarterly, and guaranteed by portion of the Purchaser Closing Date Payment Amount remains unpaid after the Effective Time, each payments specified in substantially in the form attached hereto as EXHIBIT A (each a "NOTE," and, collectivelySection 2.2(b)(i) are made, the "NOTES"), Paying Agent shall pay to each Series B Preferred Stockholder the principal amount of which Note shall be equal to 20% Pro Rata Amount of the Merger Consideration multiplied aggregate Series B Liquidation Amounts with respect to the shares of Series B Preferred Stock held by such Shareholder's Payout RatioSeries B Preferred Stockholder;
(iii) next, only to the extent a number of Purchaser's common shares (each a "PURCHASER COMMON SHARE," and collectively, the "PURCHASER COMMON SHARES") equal to such Shareholder's Purchaser Share Consideration Amount; (1) multiplied by 50%, divided by (2) the Market Price. A portion of the Purchaser Common Shares Closing Date Payment Amount remains unpaid after the payments specified in Sections 2.2(b)(i) through 2.2(b)(ii) are made, the Paying Agent shall be made part pay to each Series C Preferred Stockholder the Pro Rata Amount of the Escrow Shares as defined in Section 3.3 below.
(iv) 700 aggregate Series C Liquidation Amounts with respect to the shares of Series C Preferred Stock held by such Series C Preferred Stockholder;
(each iv) next, only to the extent a "PURCHASER PREFERRED SHARE," and collectively, the "PURCHASER PREFERRED SHARES" and with the Purchaser Common Shares, the "PURCHASER SHARES") each Purchaser Preferred Share having a liquidation value equal to $1,000 convertible into Common Shares as set forth in the Certificate of Designation. A portion of the Purchaser Closing Date Payment Amount remains unpaid after the payments specified in Sections 2.2(b)(i) through 2.2(b)(iii) are made, the Paying Agent shall pay to each Series D Preferred Shares shall be made part Stockholder the Pro Rata Amount of the Escrow Shares as defined in Section 3.3 below. Such aggregate Series D Liquidation Amounts with respect to the shares of Series D Preferred Purchaser Shares shall have the rights, privileges and designations more fully set forth in that Certificate of Designation attached hereto as EXHIBIT B, but Stock held by such Series D Preferred Shares shall entitle the holder at his/her option to convert the Preferred Shares into Common Stock after one year based on the Market Price at the time of conversion .Stockholder;
(bv) Prior next, only to Closingthe extent a portion of the Closing Date Payment Amount remains unpaid after the payments specified in Sections 2.2(b)(i) through 2.2(b)(iv) are made, the Company Paying Agent shall provide pay to Purchaser a schedule containing each Series E Preferred Stockholder the calculation Pro Rata Amount of the payments by type and amount aggregate Series E Liquidation Amounts with respect to the Shareholdersshares of Series E Preferred Stock held by such Series E Preferred Stockholder; and
(vi) thereafter, which schedule shall be subject only to the review and approval extent a portion of the Purchaser. Following agreement of Closing Date Payment Amount remains unpaid after the Parties on such schedule, it shall be attached hereto as an addendum to Schedule 2.7(bpayments specified in Sections 2.2(b)(i) (the "PAYOUT SPREADSHEET"), and the parties shall be entitled to rely on the Payout Spreadsheet. In the event of any conflict between Section 2.7(athrough 2.2(b)(v) and the Payout Spreadsheetare made, the Payout Spreadsheet Paying Agent shall controlpay to each Stockholder the Per Share Amount with respect to its shares of Company Stock.
Appears in 1 contract
Sources: Merger Agreement (Charles River Laboratories International Inc)