Earnout. (a) The Company Stockholders and the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”): (i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; (ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and (iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date. (b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders. (c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder. (d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation. (e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred. (f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following: (i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2). (ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued. (iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Tuatara Capital Acquisition Corp), Agreement and Plan of Merger (Tuatara Capital Acquisition Corp)
Earnout. (a) The Company Stockholders and If, at any time during the Engaged Option Holders shall be entitled six (6) years following the Closing, the VWAP of New Pubco Class A Common Stock is greater than or equal to receive their pro rata portion $12.50 for any twenty (20) Trading Days within a period of such number of Company Contingent Sharesthirty (30) consecutive Trading Days (the date when the foregoing is first satisfied, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company First Earnout ConditionAchievement Date”):
(i) 7,000,000 New Pubco shall promptly issue to each holder of Blocker Shares outstanding immediately prior to the Blocker Merger Effective Time such holder’s Blocker Pro Rata Portion of a number of validly issued, fully-paid and nonassessable New Pubco Shares equal to the product of (A) the quotient of (1) the number of Participating Company Contingent Shares if Units owned by Blocker as of immediately prior to the closing price Closing but following the Company Equity Reclassification, divided by (2) the Pre-Closing Outstanding Units, multiplied by (B) 9,000,000; and
(ii) the Company shall, and New Pubco shall cause the Company to, promptly issue to each Pre-Closing Company Equityholder (other than Blocker or any holder of Blocker Shares) a number of additional validly issued, fully-paid and nonassessable Participating Company Units equal to the Surviving product of (A) the quotient of (1) the number of Participating Company Units owned by such Pre-Closing Company Equityholder as of immediately following the Company Equity Reclassification, divided by (2) the Pre-Closing Outstanding Units, multiplied by (B) 9,000,000.
(b) If, at any time during the six (6) years following the Closing, the VWAP of New Pubco Class A Common Stock equals is greater than or exceeds equal to $12.00 per share on 15.00 for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading30) consecutive Trading Days (the date when the foregoing is first satisfied, the “Second Earnout Achievement Date”):
(i) New Pubco shall promptly issue to each holder of Blocker Shares outstanding immediately prior to the Blocker Merger Effective Time such holder’s Blocker Pro Rata Portion of a number of validly issued, fully-day period at any time after paid and nonassessable New Pubco Shares equal to the product of (A) the quotient of (1) the number of Participating Company Units owned by Blocker as of immediately prior to the Closing Date and no later than 60 months but following the Company Equity Reclassification, divided by (2) the Pre-Closing Date;Outstanding Units, multiplied by (B) 9,000,000; and
(ii) 2,250,000 the Company Contingent Shares if shall, and New Pubco shall cause the closing price Company to, promptly issue to each Pre-Closing Company Equityholder (other than Blocker or any holder of Blocker Shares) a number of additional validly issued, fully-paid and nonassessable Participating Company Units equal to the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty product of (20A) trading days in a thirty the quotient of (30)-trading1) the number of Participating Company Units owned by such Pre-day period at any time after the Closing Date and no later than 60 months Company Equityholder as of immediately following the Company Equity Reclassification, divided by (2) the Pre-Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basisOutstanding Units, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company StockholdersB) 9,000,000.
(c) Until In the Company Contingent Shares are issued in accordance event that there is an agreement with this Section 4.04, respect to a New Pubco Sale entered into after the Closing and prior to the date that is six (6) years following the Closing Date:
(i) to the right extent it has not already occurred, the First Earnout Achievement Date shall be deemed to receive any Company Contingent Shares is not transferable except by operation of Law relating occur on the day prior to descent and distribution, divorce and community property the closing of such Company Stockholder New Pubco Sale if the price paid per New Pubco Share in such New Pubco Sale is greater than or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubcoequal to $12.50, and (iiA) New Pubco shall issue the New Pubco Shares issuable pursuant to Section 3.04(a), (B) the Company Stockholders shall, and Engaged Option Holders New Pubco shall cause the Company to, issue the additional Participating Company Units issuable pursuant to Section 3.04(a) and (C) New Pubco shall pay the amounts payable pursuant to Section 3.04(a), in each case, on the date prior to such closing (in each case, to the extent such New Pubco Shares and additional Participating Company Units have not previously been issued);
(ii) to the extent it has not already occurred, the Second Earnout Achievement Date shall also be deemed to occur on the day prior to the closing of such New Pubco Sale if the price paid per New Pubco Share in such New Pubco Sale is greater than or equal to $15.00, and (A) New Pubco shall issue the New Pubco Shares issuable pursuant to Section 3.04(b), (B) the Company shall, and New Pubco shall cause the Company to, issue the additional Participating Company Units issuable pursuant to Section 3.04(b) and (C) New Pubco shall pay the amounts payable pursuant to Section 3.04(b), in each case, on the date prior to such closing (in each case, to the extent such New Pubco Shares and additional Participating Company Units have any rights not previously been issued);
(iii) in the event (x) the price paid per New Pubco Share in such New Pubco Sale is greater than or equal to $10.00 (to the extent the Second Earnout Achievement Date has not occurred) but does not exceed $12.50 and (y) the consideration paid per New Pubco Share in such New Pubco Sale includes stock or other equity consideration, as a shareholder condition to the consummation of Surviving such New Pubco as a result Sale, the acquiror in such New Pubco Sale shall assume the obligations in Section 3.04(a) and the stock price thresholds set forth in Section 3.04(a) shall be equitably adjusted for the conversion ratio and other terms and conditions of the transaction, as determined by the board of directors of New Pubco in good faith (but the obligations in Section 3.04(b) shall no longer apply from and after the closing of such New Pubco Sale); and
(iv) in the event the price paid per New Pubco Share in such New Pubco Sale is (x) less than $10.00 or (y) less than $12.50 and payable solely in cash consideration, the obligations in Sections 3.04(a) and 3.04(b) shall no longer apply from and after the closing of such New Pubco Sale; provided, that (I) in each of the foregoing clauses (i) through (iv), to the extent the price paid per New Pubco Share includes contingent consideration or property other than cash, the board of directors of New Pubco shall determine the price paid per New Pubco Share in such New Pubco Sale in good faith (valuing any such consideration payable in publicly-traded securities of the acquiror, on a per-security basis, at the VWAP of such security over the twenty (20) consecutive Trading Day period ending on (and including) the second Business Day prior to the date of the entry into the binding definitive agreement providing for the consummation of such New Pubco Sale) and (II) any determination by the board of directors of New Pubco with respect to any matters contemplated by, or related to, this Section 3.04, including the price paid per New Pubco Share in any New Pubco Sale, the determination of whether any New Pubco Shares or Participating Company Stockholders’ Units are issuable under this Section 3.04 or the form or requirement of any assumption by an acquirer under clause (iii) above, shall be made in good faith and Engaged Option Holders’ right to receive any shall be final and binding on the parties hereto, the Sponsor, the other Sponsor Persons (as defined in the Sponsor Agreement), the Pre-Closing Company Contingent Shares hereunderEquityholders and each of their respective Affiliates.
(d) From and If the First Earnout Achievement Date or a New Pubco Sale has not occurred after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof Closing and prior to the time any such Company Contingent Shares are issueddate that is six (6) years following the Closing Date, the obligations in Sections 3.04(a) and 3.04(c) shall terminate and no longer apply. It is If the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Second Earnout Achievement Date or a New Pubco Common Stock had occurred.
(f) In the event that Sale has not occurred after the Closing Date and no later than 60 months prior to the date that is six (6) years following the Closing Date there is an Earnout Trigger EventDate, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event obligations in accordance with the following:
(iSections 3.04(b) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i3.04(c) shall be issued to the Company Stockholders terminate and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)no longer apply.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 2 contracts
Samples: Transaction Agreement (Replay Acquisition LLC), Transaction Agreement (Replay Acquisition Corp.)
Earnout. (a) The At the Closing, as part of the Aggregate Merger Consideration, each holder of Company Stockholders and the Engaged Option Holders Common Units shall be entitled to receive their pro rata portion of such number of Company Contingent Sharesthe Earnout Rights in accordance with Section 3.01(b)(i) and the Payment Spreadsheet.
(b) Following the Closing, fully paid if, at any time during the period commencing on the Closing Date and free and clear of all Liens other than applicable federal and state securities law restrictionsending at 11:59 PM Eastern time on December 31, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):2026:
(i) 7,000,000 Company Contingent Shares if the closing price The VWAP of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco WinVest Common Stock equals or exceeds $15.00 per share on for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading-day period at 30) consecutive Trading Days (the “First Level Earnout Target”), then as soon as commercially practicable and in any time after the Closing Date and no later than 60 months event within ten (10) Business Days following the Closing Date; andachievement of the First Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 shares of WinVest Common Stock (the “First Level Earnout Shares”);
(iiiii) 1,250,000 Company Contingent Shares if the closing price The VWAP of the Surviving Pubco WinVest Common Stock equals or exceeds $18.00 per share on 17.50 for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading-day period at 30) consecutive Trading Days (the “Second Level Earnout Target”), then as soon as commercially practicable and in any time after the Closing Date and no later than 60 months following the Closing Date.
event within ten (b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (510) Business Days after following the last trading day achievement of the Second Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in such thirty-day periodaccordance with their ownership percentage of Earnout Rights, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number 2,000,000 shares of Company Contingent Shares corresponding to the applicable Company Earnout Condition WinVest Common Stock (the “Second Level Earnout InstructionShares”); and
(iii) The VWAP of the WinVest Common Stock equals or exceeds $20.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the “Third Level Earnout Target”), with no action being required on then as soon as commercially practicable and in any event within ten (10) Business Days following the part achievement of the Company StockholdersThird Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 shares of WinVest Common Stock (the “Third Level Earnout Shares”).
(c) Until For the Company Contingent avoidance of doubt, the Earnout Targets may all be satisfied over the same period of Trading Days or any other periods that have overlapping Trading Days, and if each Earnout Target is separately met the Earnout Shares are issued in accordance connection with each such Earnout Target shall be earned and no longer subject to the restrictions set forth in this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder3.05, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) shall be cumulative with the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right Earnout Shares earned prior to receive any Company Contingent Shares hereundersuch time.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company The Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will Targets shall automatically be adjusted appropriately to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco shares of WinVest Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco shares of WinVest Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Earnout Shares are delivered to the holders of the Earnout Rights.
(e) No fractional shares of WinVest Common Stock shall be issued to a holder of Earnout Rights in connection with the issuance of Earnout Shares in accordance with this Section 3.05, and no certificates for any such fractional shares shall be issued. It is In the intent event any holder of the Parties that Earnout Rights would otherwise be entitled to receive a fraction of a share of WinVest Common Stock, such adjustments will fractional share shall be made in order to provide rounded to the nearest whole share. WinVest and the Company Stockholders acknowledge that any such adjustment was not separately bargained-for consideration but merely represents a mechanical rounding off for purposes of avoiding the expense and Engaged Option Holders inconvenience to WinVest that would otherwise be caused by the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurredissuance of fractional shares.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Any issuance of Earnout Trigger Event, then any Company Earnout Condition not previously satisfied Shares shall be deemed satisfied immediately prior treated as an adjustment to the occurrence Aggregate Merger Consideration by the parties hereto for Tax purposes and not treated as “other property” within the meaning of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary Section 356 of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00Code, but less than $12.00, then unless otherwise required by applicable Law as a portion result of a “determination” (within the meaning of Section 1313(a) of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2Code).
(iig) If Following the Earnout Trigger Event occurs after Closing, WinVest, the one-year anniversary of Surviving Company and their subsidiaries, including the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none applicable members of the Company Contingent Shares shall Group, will be issued.
(iii) If entitled to operate their respective businesses based upon their respective business requirements. Each of WinVest, the Earnout Trigger Event occurs at any time during Surviving Company and their subsidiaries, including the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion applicable members of the Company Contingent Group, will be permitted, following the Closing, to make changes at its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an impact on, the share price of the WinVest Common Stock and the ability of the holders of Earnout Rights to earn the Earnout Shares, and no person will have any right to claim the loss of all or any portion of any Earnout Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04or other damages as a result of such decisions.
Appears in 2 contracts
Samples: Business Combination Agreement (WinVest Acquisition Corp.), Business Combination Agreement (WinVest Acquisition Corp.)
Earnout. (a) The Company Stockholders From and after the Engaged Option Holders Closing until the fifth anniversary of the Closing Date (the “Earnout Period”), promptly (but in any event within five Business Days) after the occurrence of any of the following (any one or more of which may occur at the same time), Holdings shall be entitled issue, up to receive their pro rata portion of such number of Company Contingent an additional 6,000,000 Holdings Common Shares (the “Earnout Shares”) to the Cision Owner as additional consideration for the Contribution and Exchange (and without the need for additional consideration from the Cision Owner), fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of restrictions and any Contract with Holdings or any of the following conditions (each, an “Company Earnout Condition”):its Subsidiaries to which Cision Owner might then be a party:
(i) 7,000,000 Company Contingent Shares if the closing Holdings Common Share Price is greater than $13.00 (such share price as adjusted pursuant to this Section 2.02, the “Minimum Target”) for any period of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) 20 trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;out of 30 consecutive trading days, 2,000,000 Holdings Common Shares;
(ii) 2,250,000 Company Contingent Shares if the closing Holdings Common Share Price is greater than $16.00 (such share price as adjusted pursuant to this Section 2.02, the “Median Target”) for any period of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) 20 trading days in a thirty (30)-trading-day period at any time after out of 30 consecutive trading days, 2,000,000 Holdings Common Shares plus the Closing Date and no later than 60 months following the Closing Date; amount of Holdings Common Shares issuable pursuant to Section 2.02(a)(i) if not previously issued; and
(iii) 1,250,000 Company Contingent Shares if the closing Holdings Common Share Price is greater than $19.00 (such share price as adjusted pursuant to this Section 2.02, the “Maximum Target”) for any period of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) 20 trading days out of 30 consecutive trading days, 2,000,000 Holdings Common Shares plus the amount of Holdings Common Shares issuable pursuant to Section 2.02(a)(i) and Section 2.02(a)(ii), in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Dateeach case if not previously issued.
(b) Each Company Upon the first Change in Control to occur during the Earnout Condition will Period, Holdings shall, no later than immediately prior to the consummation of such Change in Control, issue to the Cision Owner as additional consideration for the Contribution and Exchange (and without the need for additional consideration from the Cision Owner), free and clear of all Liens other than applicable federal and state securities law restrictions and any Contract with Holdings or any of its Subsidiaries to which Cision Owner might then be evaluated on a stand-alone basisparty, without reference to any other Company a number of Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding the following:
(i) if the price per share paid or payable to the applicable Company Earnout Condition stockholders of Holdings in connection with such Change in Control is equal to or greater than the Minimum Target but less than the Median Target, 2,000,000 Holdings Common Shares less any Holdings Common Shares previously issued pursuant to Section 2.02(a)(i);
(ii) if the “Earnout Instruction”price per share paid or payable to the stockholders of Holdings in connection with such Change in Control is equal to or greater than the Median Target but less than the Maximum Target, 4,000,000 Holdings Common Shares less any Holdings Common Shares previously issued pursuant to Section 2.02(a)(i) or Section 2.02(a)(ii); and
(iii) if the price per share paid or payable to the stockholders of Holdings in connection with such Change in Control is equal to or greater than the Maximum Target, 6,000,000 Holdings Common Shares less any Holdings Common Shares previously issued pursuant to Section 2.02(a)(i), Section 2.02(a)(ii) or Section 2.02(a)(iii). For the avoidance of doubt, if the price per share paid or payable to the stockholders of Holdings in connection with the first Change in Control to occur during the Earnout Period is less than the Minimum Target, then no action being required on the part of the Company StockholdersEarnout Shares shall be issuable pursuant to this Section 2.02(b).
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at At all times a Company Contingent Share remains subject to an Company during the Earnout ConditionPeriod, Surviving Pubco will Holdings shall keep available for issuance a sufficient number of unissued shares of Surviving Pubco Holdings Common Stock Shares to permit Surviving Pubco Holdings to satisfy its issuance obligations set forth in this Section 4.04 2.02 and will shall take all actions required to increase the authorized number of shares of Surviving Pubco Holdings Common Stock Shares if at any time there will shall be insufficient unissued shares of Surviving Pubco Holdings Common Stock Shares to permit such reservation.
(d) Holdings shall take such actions as are reasonably requested by the Cision Owner to evidence the issuances pursuant to this Section 2.02, including through the provision of a certified updated Register of Members showing such issuances (as certified by a director of Holdings or the applicable registrar or transfer agent) and, if requested, through the delivery of duly and validly executed certificates or instruments representing the Earnout Shares.
(e) The Company Contingent In the event Holdings shall at any time during the Earnout Period pay any dividend on Holdings Common Shares and by the underlying target price for issuance of additional Holdings Common Shares, or effect a subdivision or combination or consolidation of the outstanding Holdings Common Shares (by reclassification or otherwise) into a greater or lesser number of Holdings Common Shares, then in each Company such case, (i) the number of Earnout Condition will Shares shall be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend by multiplying such amount by a fraction the numerator of which is the number of Holdings Common Shares (including any dividend or distribution other shares so reclassified as Holdings Common Shares) outstanding immediately after such event and the denominator of securities convertible into Surviving Pubco which is the number of Holdings Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and Shares that were outstanding immediately prior to such event and (ii) the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will Holdings Common Share Price values set forth in Sections 2.02(a)(i) -(iii) above shall be made in order appropriately adjusted to provide to the Company Stockholders and Engaged Option Holders Cision Owner the same economic effect as contemplated by this Agreement as if no change with respect prior to the Surviving Pubco Common Stock had occurredsuch event.
(f) In During the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger EventPeriod, then any Company Earnout Condition not previously satisfied Holdings shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
take all reasonable efforts for (i) If Holdings to remain listed as a public company on, and for the Holdings Common Shares (including, when issued, the Earnout Trigger Event occurs prior Shares) to be tradable over, the one-year anniversary Nasdaq and (ii) the Earnout Shares, when issued, to be approved for listing on the Nasdaq; provided, however, the foregoing shall not limit Holdings from consummating a Change in Control or entering into a Contract that contemplates a Change in Control. Upon the consummation of any Change in Control during the Closing Date and results in an Earnout Trigger Price that is greater Period, other than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions as set forth in Section 2.02(b) above, Holdings shall have no further obligations pursuant to this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 22.02(f).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Capitol Acquisition Corp. III)
Earnout. (a) The From and after the Closing until the fifth (5th) anniversary of the Closing Date (the “Earnout Period”), promptly (but in any event within five (5) Business Days) after the occurrence of any of the following (any one or more of which may occur at the same time), Acquiror shall issue, up to an additional 25,000,000 shares of Acquiror Common Stock in the aggregate (the “Earnout Shares”) to the Company Stockholders Shareholders (allocated among them as set forth on the Allocation Schedule) as additional consideration for the Merger (and without the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of need for additional consideration from the Company Contingent SharesShareholders), fully paid and free and clear of all Liens other than restrictions under applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):Securities Laws:
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Acquiror Common Stock equals or exceeds VWAP is greater than $12.00 per 13.50 (such share on price as adjusted pursuant to this Section 3.07, the “Minimum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after 30) consecutive trading days, 12,500,000 shares of Acquiror Common Stock (the Closing Date and no later than 60 months following the Closing Date;“Minimum Target Shares”); and
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Acquiror Common Stock equals or exceeds VWAP is greater than $15.00 per 15.50 (such share on price as adjusted pursuant to this Section 3.07, the “Maximum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
(iii30) 1,250,000 Company Contingent Shares if the closing price consecutive trading days, 12,500,000 shares of the Surviving Pubco Acquiror Common Stock equals or exceeds $18.00 per share on any twenty (20the “Maximum Target Shares”) trading days in a thirty (30)-trading-day period at any time after plus the Closing Date and no later than 60 months following the Closing DateMinimum Target Shares, if not previously issued.
(b) Each Company Upon the first Change in Control to occur during the Earnout Condition will be evaluated on a stand-alone basisPeriod, without reference Acquiror shall, no later than immediately prior to any other Company Earnout Condition. If a Company Earnout Condition is satisfiedthe consummation of such Change in Control, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent issue to issue the Company Contingent Shareholders (allocated among them as set forth on the Allocation Schedule) as additional consideration for the Merger (and without the need for additional consideration from the Company Shareholders), free and clear of all Liens other than restrictions under applicable Securities Laws, a number of Earnout Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding the following:
(i) if the Change in Control Consideration paid or payable to the applicable Company holders of shares of Acquiror Common Stock in connection with such Change in Control is equal to or greater than the Minimum Target but less than the Maximum Target, (A) the Minimum Target Shares minus (B) any shares of Acquiror Common Stock previously issued pursuant to Section 3.07(a)(i); and
(ii) if the Change in Control Consideration paid or payable to the holders of shares of Acquiror Common Stock in connection with such Change in Control is equal to or greater than the Maximum Target, (A) the Minimum Target Shares plus (B) the Maximum Target Shares minus (C) any shares of Acquiror Common Stock previously issued pursuant to Section 3.07(a)(i) and/or Section 3.07(a)(ii). For the avoidance of doubt, if the Change in Control Consideration paid or payable to the holders of shares of Acquiror Common Stock in connection with the first Change in Control to occur during the Earnout Condition (Period is less than the “Minimum Target, then no Earnout Instruction”Shares shall be issuable pursuant to this Section 3.07(b), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at At all times a Company Contingent Share remains subject to an Company during the Earnout ConditionPeriod, Surviving Pubco will Acquiror shall keep available for issuance a sufficient number of unissued shares of Surviving Pubco Acquiror Common Stock to permit Surviving Pubco Acquiror to satisfy its issuance obligations set forth in this Section 4.04 3.07 and will shall take all actions required to increase the authorized number of shares of Surviving Pubco Acquiror Common Stock if at any time there will shall be insufficient unissued shares of Surviving Pubco Acquiror Common Stock to permit such reservation.
(d) Acquiror shall take such actions as are reasonably requested by the Company Shareholders to evidence the issuances pursuant to this Section 3.07, including, if requested, through the delivery of duly and validly executed certificates (if the shares of Acquiror Common Stock are then certificated) or instruments representing the Earnout Shares.
(e) The Company Contingent If Acquiror shall at any time during the Earnout Period pay any dividend on shares of Acquiror Common Stock by the issuance of additional shares of Acquiror Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Acquiror Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Acquiror Common Stock, then, in each such case, (i) the number of Earnout Shares and the underlying target price for each Company Earnout Condition will shall be adjusted appropriately to reflect any stock splitby multiplying such amount by a fraction, reverse stock split, stock dividend the numerator of which is the number of shares of Acquiror Common Stock (including any dividend or distribution other shares so reclassified as shares of securities convertible into Surviving Pubco Acquiror Common Stock), reorganization, recapitalization, reclassification, combination, exchange ) outstanding immediately after such event and the denominator of which is the number of shares or other like change with respect to the Surviving Pubco of Acquiror Common Stock, occurring on or after the date hereof and Stock that were outstanding immediately prior to such event, and (ii) the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will Acquiror Common Stock VWAP values set forth in Sections 3.07(a)(i) and 3.07(a)(ii) shall be made in order appropriately adjusted to provide to the Company Stockholders and Engaged Option Holders Shareholders the same economic effect as contemplated by this Agreement as if no change with respect prior to the Surviving Pubco Common Stock had occurredsuch event.
(f) In During the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger EventPeriod, then any Company Earnout Condition not previously satisfied Acquiror shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
use reasonable efforts for (i) If Acquiror to remain listed as a public company on, and for the shares of Acquiror Common Stock (including, when issued, the Earnout Trigger Event occurs prior Shares) to be tradable over, the one-year anniversary Nasdaq and (ii) the Earnout Shares, when issued, to be approved for listing on the Nasdaq; provided, however, the foregoing shall not limit Acquiror from consummating a Change in Control or entering into a Contract that contemplates a Change in Control. Upon the consummation of any Change in Control during the Closing Date and results in an Earnout Trigger Price that is greater Period, other than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions as set forth in Section 3.07(b) above, Acquiror shall have no further obligations pursuant to this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 23.07(f).
(iig) If the Any issuance of Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in Shareholders pursuant to this Section 4.043.07 shall be treated as an adjustment to the Per Share Merger Closing Consideration for U.S. federal and applicable state and local income Tax purposes to the extent permitted by applicable Law.
Appears in 1 contract
Samples: Merger Agreement (Property Solutions Acquisition Corp.)
Earnout. (a) The If the trading price of the Company Stockholders and Ordinary Shares on Nasdaq is greater than 125% of the Engaged Option Holders Company Share Value (such share price, the “Target”) for any period of 10 Trading Days out of 20 consecutive Trading Days at any time after the Closing until the fourth anniversary of the Closing Date (such period, the “Earnout Period”), the Company shall be entitled promptly (but in any event within five (5) Business Days thereafter) issue:
(1) to receive their pro rata portion of such Perception as additional consideration for services provided by Perception to the Company (x) 2,477,269 Company Ordinary Shares if the Initial Transaction Proceeds are equal to or greater than $150,000,000 or (y) a number of Company Contingent Ordinary Shares equal to the difference of (A) 2,477,269 and (B) the product of (i) 0.3866 and (ii) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Perception pursuant to this Section 2.3(a), the “Perception Earnout Shares, ”); and
(2) to Company Management the Management Earnout Shares. The Perception Earnout Shares and Management Earnout Shares are collectively referred to as “Earnout Shares.” The Company Ordinary Shares that may be issued pursuant to this Section 2.3(a) shall be fully paid and free and clear of all Liens other than applicable federal securities Laws restrictions. The Earnout Shares will bear the restrictive legends and state securities law restrictions, stop transfer instructions as set forth below upon satisfaction of any of in the following conditions (each, an “Company Lockup Agreement to the extent the restrictions in the Lockup Agreement are still in effect at the time Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Dateare issued.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If In the event a Company Change of Control Transaction occurs during the Earnout Condition Period prior to the payment of any Earnout Shares pursuant to Section 2.3(a) and the Change of Control Consideration paid or payable to the holders of Company Ordinary Shares in connection with such Change of Control Transaction is satisfiedequal to or greater than the Target, the Company shall promptly (but in any event within five (5) Business Days after thereafter) issue (1) to Perception the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent Perception Earnout Shares as additional consideration for services provided by Perception to issue the Company Contingent and (2) to Company Management the Management Earnout Shares. The Company Ordinary Shares earned therefrom that may be issued pursuant to each Company Stockholder this Section 2.3(b) shall be fully paid and Engaged Option Holder in such amounts equal free and clear of all Liens other than applicable securities Laws restrictions. For the avoidance of doubt, if the Change of Control Consideration paid or payable to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number the holders of Company Contingent Shares corresponding in connection with the first Company Change of Control to occur during the applicable Company Earnout Condition (Period is less than the “Target, then no Earnout Instruction”Shares shall be issuable pursuant to this Section 2.3(b), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred.
(f) In the event that after a definitive agreement with respect to a Change of Control Transaction is executed by the Closing Date Company prior to and no later than 60 months following remains pending at the Closing Date there is an end of the Earnout Trigger EventPeriod, then any Company for purposes of Section 2.3(b), the Earnout Condition not previously satisfied Period shall be deemed satisfied immediately prior to extended until the occurrence earlier of the consummation of such Earnout Trigger Event in accordance with Company Change of Control Transaction or the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary termination of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion such Company Change of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)Control Transaction.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Business Combination Agreement (Collective Growth Corp)
Earnout. (a) The Company Stockholders During the period between the date of Closing but on or prior to the fifth (5th) anniversary of Closing (the “Earnout Period”), subject to the terms and conditions set forth herein, the Engaged Option Holders Sellers shall be entitled have the contingent right to receive their pro rata portion of such number of Company Contingent Sharesadditional consideration from the Purchaser based on the performance mechanics set forth in this Section 2.6, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, to the extent that the requirements as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):in this Section 2.6 are met.
(ib) 7,000,000 Company Contingent Shares if In the closing event that the volume weighted-average per-share trading price of Class A Ordinary Shares is at or above the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any Tier 1 Threshold Price for twenty (20) trading days in a any thirty (30)-trading-day 30)-day continuous trading period at any time after during the Closing Date and no later than 60 months following Earnout Period, the Closing Date;Sellers will have the right to receive a number of additional Class A Ordinary Shares equal to $20,000,000 divided by the Tier 1 Threshold Price (the “Tier 1 Consideration”).
(iic) 2,250,000 Company Contingent Shares if In the closing event the weighted-average per-share trading price of Class A Ordinary Shares is at or above the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any Tier 2 Threshold Price for twenty (20) trading days in a any thirty (30)-trading-day 30)-day continuous trading period at any time after during the Closing Date Earnout Period, the Sellers will have the right to receive a number of additional Class A Ordinary Shares equal to $20,000,000 divided by the Tier 2 Threshold Price (the “Tier 2 Consideration” and no later than 60 months following with the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if Tier 1 Consideration, the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date“Earnout Shares”).
(bd) Each Company The Purchaser shall use commercially reasonable efforts to issue the relevant portion of the Earnout Condition will be evaluated on a stand-alone basis, without reference Shares to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, the Sellers within five (5) Business Days after following the last final day of the relevant twenty (20) trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and In the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and event that a Change in Control occurs prior to the time any such Company Contingent Shares are issued. It is the intent expiration of the Parties that such adjustments Earnout Period at or above a Class A Ordinary Shares per share price (or implied per share price) of $10.00 per share (the “Acceleration Price”), the Sellers will be made in order have the right to provide receive a number of additional Class A Ordinary Shares equal to the Company Stockholders and Engaged Option Holders sum of (i) $20,000,000 divided by the same economic effect as contemplated Tier 1 Threshold Price plus (ii) $20,000,000 divided by this Agreement as if no change with respect the Tier 2 Threshold Price immediately prior to the Surviving Pubco Common Stock had occurredconsummation of the Change in Control. For the avoidance of doubt, in the event that a Change in Control occurs either after the expiration of the Earnout Period or at a Class A Ordinary Shares per share price below the Acceleration Price, the Sellers shall not be entitled to receive any additional consideration pursuant to this Section 2.6(e).
(f) In The Purchaser shall not voluntarily cease to be listed as a public company on the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If NASDAQ during the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results Period other than in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then connection with a portion of the Company Contingent Shares identified Change in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)Control.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Purchase Agreement (Act II Global Acquisition Corp.)
Earnout. (a) The At the Closing, as part of the Aggregate Merger Consideration, each holder of Company Stockholders and the Engaged Option Holders Ordinary Shares shall be entitled to receive their pro rata portion of such number of Company Contingent Sharesthe Earnout Rights in accordance with Section 3.01(b)(i) and the Payment Spreadsheet.
(b) Following the Closing, fully paid if, at any time during the period commencing on the Closing Date and free and clear of all Liens other than applicable federal and state securities law restrictionsending at 11:59 PM Eastern time on December 31, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):2026:
(i) 7,000,000 Company Contingent Shares if the closing price The VWAP of the Surviving Pubco Common Stock WinVest BVI Ordinary Shares equals or exceeds $12.00 per share on 15.00 for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading-day period at 30) consecutive Trading Days (the “First Level Earnout Target”), then as soon as commercially practicable and in any time after the Closing Date and no later than 60 months event within ten (10) Business Days following the Closing Date;achievement of the First Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest BVI shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 WinVest BVI Ordinary Shares (the “First Level Earnout Shares”);
(ii) 2,250,000 Company Contingent Shares if the closing price The VWAP of the Surviving Pubco Common Stock WinVest BVI Ordinary Shares equals or exceeds $15.00 per share on 17.50 for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading-day period at 30) consecutive Trading Days (the “Second Level Earnout Target”), then as soon as commercially practicable and in any time after the Closing Date and no later than 60 months event within ten (10) Business Days following the Closing Date; achievement of the Second Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest BVI shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 WinVest BVI Ordinary Shares (the “Second Level Earnout Shares”); and
(iii) 1,250,000 Company Contingent Shares if the closing price The VWAP of the Surviving Pubco Common Stock WinVest BVI Ordinary Shares equals or exceeds $18.00 per share on 20.00 for any twenty (20) trading days in Trading Days within a period of thirty (30)-trading-day period at 30) consecutive Trading Days (the “Third Level Earnout Target”), then as soon as commercially practicable and in any time after the Closing Date and no later than 60 months following the Closing Date.
event within ten (b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (510) Business Days after following the last trading day achievement of the Third Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest BVI shall cause the issuance to such holders, pro-rata in such thirty-day periodaccordance with their ownership percentage of Earnout Rights, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent 2,000,000 WinVest BVI Ordinary Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Third Level Earnout InstructionShares”), with no action being required on the part of the Company Stockholders.
(c) Until For the Company Contingent avoidance of doubt, the Earnout Targets may all be satisfied over the same period of Trading Days or any other periods that have overlapping Trading Days, and if each Earnout Target is separately met the Earnout Shares are issued in accordance connection with each such Earnout Target shall be earned and no longer subject to the restrictions set forth in this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder3.05, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) shall be cumulative with the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right Earnout Shares earned prior to receive any Company Contingent Shares hereundersuch time.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company The Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will Targets shall automatically be adjusted appropriately to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common StockWinVest BVI Ordinary Shares), reorganization, recapitalization, reclassification, reissuance, combination, conversion, exchange of shares or other like change with respect to WinVest BVI Ordinary Shares (other than as a result of the Surviving Pubco Common StockMergers), occurring on or after the date hereof Original Execution Date and prior to the time any such Company Contingent Earnout Shares are delivered to the holders of the Earnout Rights.
(e) No fractional WinVest BVI Ordinary Shares shall be issued to a holder of Earnout Rights in connection with the issuance of Earnout Shares in accordance with this Section 3.05, and no certificates for any such fractional shares shall be issued. It is In the intent event any holder of the Parties that Earnout Rights would otherwise be entitled to receive a fraction of a WinVest BVI Ordinary Share, such adjustments will fractional share shall be made in order to provide rounded to the nearest whole share. WinVest and the Company Stockholders acknowledge that any such adjustment was not separately bargained-for consideration but merely represents a mechanical rounding off for purposes of avoiding the expense and Engaged Option Holders inconvenience to WinVest BVI that would otherwise be caused by the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurredissuance of fractional shares.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Any issuance of Earnout Trigger Event, then any Company Earnout Condition not previously satisfied Shares shall be deemed satisfied immediately prior treated as an adjustment to the occurrence Aggregate Merger Consideration by the parties hereto for Tax purposes and not treated as “other property” within the meaning of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary Section 356 of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00Code, but less than $12.00, then unless otherwise required by applicable Law as a portion result of a “determination” (within the meaning of Section 1313(a) of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2Code).
(iig) If Following the Earnout Trigger Event occurs after Closing, the one-year anniversary of Surviving Company and its subsidiaries, including the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none applicable members of the Company Contingent Shares shall Group, will be issued.
(iii) If entitled to operate their respective businesses based upon their respective business requirements. Each of the Earnout Trigger Event occurs at any time during Surviving Company and its subsidiaries, including the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion applicable members of the Company Contingent Group, will be permitted, following the Closing, to make changes at its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an impact on, the share price of the WinVest BVI Ordinary Shares identified in Section 4.04(a)(i) shall be issued and the ability of the holders of Earnout Rights to earn the Company Stockholders Earnout Shares, and Engaged Option Holders in accordance with no person will have any right to claim the provisions set forth in this Section 4.04loss of all or any portion of any Earnout Shares or other damages as a result of such decisions.
Appears in 1 contract
Samples: Business Combination Agreement (WinVest Acquisition Corp.)
Earnout. (a) The Company Stockholders From and after the Closing until the fifth (5th) anniversary of the Closing Date (the “Earnout Period”), upon the occurrence of any of the following, NewCo shall issue up to an additional three million (3,000,000) shares of NewCo Common Stock (the “Earnout Shares”) to the Holders of Common Shares and the Engaged Option Holders shall be entitled of In-the-Money SARs that received a contingent right to receive their pro rata portion of such number of Company Contingent SharesEarnout Shares pursuant to Section 4.1(b)(ii) or Section 4.1(b)(iii), respectively (collectively, the “Earnout Holders”), as additional consideration for the Second Merger, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of Permitted Liens or Liens pursuant to any of the following conditions (each, Contract to which an “Company Earnout Condition”):Holder is or may become a party:
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco NewCo Common Stock equals or exceeds Price is greater than thirteen dollars and fifty cents ($12.00 per 13.50) (such share on price as adjusted pursuant to this Section 4.8, the “Minimum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after 30) consecutive trading days, one million five hundred thousand (1,500,000) shares of NewCo Common Stock (the Closing Date and no later than 60 months following the Closing Date;“Minimum Target Earnout Shares”); and
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco NewCo Common Stock equals or exceeds Price is greater than fifteen dollars ($15.00 per 15.00) (such share on price as adjusted pursuant to this Section 4.8, the “Maximum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
30) consecutive trading days, one million five hundred thousand (iii1,500,000) 1,250,000 Company Contingent Shares if the closing price shares of the Surviving Pubco NewCo Common Stock equals or exceeds $18.00 per share on any twenty (20the “Maximum Target Earnout Shares”) trading days in a thirty (30)-trading-day period at any time after plus the Closing Date and no later than 60 months following the Closing DateMinimum Target Earnout Shares, if not previously issued.
(b) Each Company From and after the First Merger Effective Time, NewCo shall reserve at all times a sufficient number of authorized and unissued shares of NewCo Common Stock necessary to issue the Earnout Condition will be evaluated on a stand-alone basis, without reference Shares. In the event that the Earnout Holders are entitled to any other Company Earnout Condition. If a Company Shares, NewCo shall issue such Earnout Condition is satisfied, Shares promptly and in any event within five ten (510) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct date the Exchange Agent Earnout Holders become entitled thereto. The Earnout Shares to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding be issued to the Earnout Holders hereunder, if any, when delivered, shall be duly authorized and validly issued, fully paid, and non-assessable, and issued in compliance with all applicable Company Earnout Condition state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (the “Earnout Instruction”including preemptive rights), with no action being required the NewCo Governing Documents, commitments, or agreements to which NewCo is a party or by which it is bound. During the Earnout Period, NewCo shall use reasonable efforts (subject to the occurrence of a Liquidity Event) (i) to remain listed as a public company on, and to provide that the NewCo Common Stock (including, when issued the Earnout Shares) is tradable over, Nasdaq and (ii) to provide that the Earnout Shares, when issued, are approved for listing on the part of the Company StockholdersNasdaq.
(c) Until If NewCo shall at any time during the Company Contingent Earnout Period pay any cash or in-kind dividend (other than any dividend in the form of additional shares of NewCo Common Stock, which dividend shall be governed by the immediately following sentence) on shares of NewCo Common Stock, then in each such case the Minimum Target (to the extent the Minimum Target Earnout Shares are have not already been issued prior to the time of such dividend) and the Maximum Target (to the extent the Maximum Target Earnout Shares have not already been issued prior to the time of such dividend) shall be deemed to have been reduced for all purposes of this Agreement by the amount of such cash dividend or the fair market value of the in-kind dividend, as applicable, paid with respect to each share of NewCo Common Stock. If NewCo shall at any time during the Earnout Period pay any dividend on shares of NewCo Common Stock by the issuance of additional shares of NewCo Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of NewCo Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of NewCo Common Stock, then in accordance with this Section 4.04each such case, (i) the right number of Earnout Shares shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of NewCo Common Stock (including any other shares so reclassified as NewCo Common Stock) outstanding immediately after such event and the denominator of which is the number of shares of NewCo Common Stock that were outstanding immediately prior to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubcoevent, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco NewCo Common Stock to permit Surviving Pubco to satisfy its issuance obligations Price values set forth in this Section 4.04 4.8(a)(i) and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will (ii) above shall be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be appropriately adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Earnout Holders the same economic effect as contemplated by this Agreement as if no change prior to such event.
(d) After the occurrence of the Minimum Target, NewCo shall issue to (i) the Holders of the Common Shares, the Minimum Target Earnout Shares equal to the Earnout Per Fully-Diluted Common Share and (ii) the Holders of the In-the-Money SARs, the Minimum Target Earnout Shares with respect to such In-the-Money SAR as set forth in Section 4.1(b)(iii).
(e) After the Surviving Pubco occurrence of the Maximum Target, NewCo shall issue to (i) the Holders of the Common Stock had occurredShares, the Maximum Target Earnout Shares equal to the Earnout Per Fully-Diluted Common Share and (ii) the Holders of the In-the-Money SARs, the Maximum Target Earnout Shares with respect to such In-the-Money SAR as set forth in Section 4.1(b)(iii).
(f) In the event that after a Liquidity Event occurs during the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the followingPeriod:
(i) If if the Liquidity Event Consideration in such Liquidity Event is greater than the Minimum Target (but less than the Maximum Target) and the Minimum Target Earnout Trigger Event occurs Shares have not already been issued, then the Minimum Target Earnout Shares shall be deemed issued and outstanding pursuant to and as contemplated by Section 4.8(a)(i) and Section 4.8(d), effective immediately prior to the one-year anniversary consummation of such Liquidity Event and the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) holders thereof shall be issued entitled to receive the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).corresponding Liquidity Event Consideration; or
(ii) If if the Liquidity Event Consideration in such Liquidity Event is greater than the Maximum Target and the Maximum Target Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00Shares have not already been issued, then none of the Company Contingent Minimum Target Earnout Shares (to the extent not already issued) and the Maximum Target Earnout Shares shall be issued.
(iii) If , and the Maximum Target Earnout Trigger Event occurs at any time during Shares and the 60 months following the Closing Date and results in an Minimum Target Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be deemed issued and outstanding pursuant to and as contemplated by Section 4.8(a) and Section 4.8(d) or Section 4.8(e), as applicable, effective immediately prior to the Company Stockholders consummation of such Liquidity Event and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04holders thereof shall be entitled to receive the corresponding Liquidity Event Consideration.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Monocle Acquisition Corp)
Earnout. (a) The After the Closing, subject to the terms and conditions set forth herein, Company Stockholders and (but excluding holders of Dissenting Shares) shall have the Engaged Option Holders shall be entitled contingent right to receive their pro rata portion additional shares of such number Goldenstone Common Stock based on the performance of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, Surviving Corporation if the requirements as set forth below upon satisfaction of any of in this Section 3.07 are achieved. The Merger Consideration Earnout Shares shall be allocated among the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days Stockholders in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Dateaccordance with this Section 3.07.
(b) Each Company The Merger Consideration Earnout Condition will Shares shall be evaluated on a stand-alone basis, without reference to any other Company issued as follows:
(i) an aggregate of 500,000 Merger Consideration Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “2025 Earnout InstructionShares”), with no action being required on the part of the ) will be promptly issued to Company Stockholders.
(c) Until the Company Contingent Shares are issued Stockholders in accordance with this Section 4.04, (i) the right to receive any Company Contingent their respective Pro Rata Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holderif, and does not constitute an equity only if, within 12 months from the Closing Date the closing share price of Goldenstone Common Stock was greater than or ownership interest in Surviving Pubcoequal to $11.50 for any 20 consecutive Trading Days within such 12-month period, and (ii) if such condition is met, the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result 2025 Earnout Shares will be issued on or before the 30th day after the end of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations 12-month period set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 23.07(b)(i).
(ii) If an aggregate of 500,000 Merger Consideration Earnout Shares (the “2026 Earnout Trigger Event occurs after the one-year anniversary of Shares”) will be promptly issued to Company Stockholders in accordance with their respective Pro Rata Shares if, and only if, within 24 months from the Closing Date the closing share price of Goldenstone Common Stock was greater than or equal to $13.00 for any 20 consecutive Trading Days within such 24-month period, and results in an if such condition is met, the 2026 Earnout Trigger Price that is less than $12.00, then none Shares will be issued on or before the 30th day after the end of the Company Contingent Shares shall be issued24-month period set forth in this Section 3.07(b)(ii).
(iii) If an aggregate of 500,000 Merger Consideration Earnout Shares (the “2027 Earnout Trigger Event occurs at any time during the 60 Shares”) will be promptly issued to Company Stockholders in accordance with their respective Pro Rata Shares if, and only if, within 36 months following from the Closing Date and results in an Earnout Trigger Price that is the closing share price of Goldenstone Common Stock was greater than or equal to $15.00 for any 20 consecutive Trading Days within such 24-month period, and if such condition is met, the 2027 Earnout Shares will be issued on or greater than $12.00, but less than $15.00, then only before the portion 30th day after the end of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions 24-month period set forth in this Section 4.043.07(b)(iii).
(iv) each issuance made pursuant to Section 3.07(b)(i), Section 3.07(b)(ii) and Section 3.07(b)(iii) may only occur once.
(c) The Goldenstone Common Stock price targets set forth in Section 3.07(b) and the number of shares of Goldenstone Common Stock to be issued and released pursuant to Section 3.07(b) shall be equitably adjusted for any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event affecting the Goldenstone Common Stock after the date of this Agreement.
(d) As used in this Section 3.07, the term “Pro Rata Share” means, with respect to each Company Stockholder, a ratio calculated by dividing (i) the total number of shares of Company Common Stock held by such Company Stockholder as of immediately prior to the Effective Time by (ii) the total number of shares of Company Common Stock held by all Company Stockholders as of immediately prior to the Effective Time.
Appears in 1 contract
Samples: Business Combination Agreement (Goldenstone Acquisition Ltd.)
Earnout. (a) The From and after the Closing Date until the sixth (6th) anniversary of the Closing Date (the “Earnout Period”), promptly (but in any event within fifteen (15) Business Days) after the occurrence of any Earnout Event, the Company Stockholders shall issue up to 12,000,000 Company Ordinary Shares (the “Earnout Shares”) in accordance with this Section 3.05 to Persons that were Company Shareholders, in each case, as of immediately prior to the First Effective Time, but after the Recapitalization (the “Earnout Participants”), and the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Sharesin accordance with each Earnout Participant’s Pro Rata Portion, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictionsLiens, as set forth below upon satisfaction of any with one-third (1/3) of the following conditions Earnout Shares issuable if over any twenty (20) Trading Days within any thirty (30) Trading Day period the VWAP of the Company Ordinary Shares is greater than or equal to $15.00, $17.50 and $20.00, respectively (each, an “Earnout Event”), provided that in each case, any fractional shares shall be rounded down to the nearest whole number and payment for such fraction shall be made in cash in lieu of any such fractional share based on a value equal to applicable target price. Notwithstanding the foregoing, to the extent any holder of Company Restricted Shares is entitled to Earnout Condition”):
Shares pursuant to this Section 3.05, such Earnout Shares shall only be issued to such holder, if at all, on the later of (i) 7,000,000 Company Contingent the date the Earnout Shares if are issued to the closing price of holders entitled thereto pursuant to the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date preceding sentence and no later than 60 months following the Closing Date;
(ii) 2,250,000 the vesting of such Company Contingent Restricted Shares if in accordance with their terms. For the closing price avoidance of doubt, in the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in event a thirty (30)-trading-day period at any time Company Restricted Share is forfeited without vesting, such holder of Company Restricted Share will not be entitled to Earnout Shares pursuant to this Section 3.05 after the Closing Date and no later than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price date of the Surviving Pubco Common Stock equals such forfeiture or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Datetermination, as applicable.
(b) Each Company At all times during the Earnout Condition will be evaluated on a stand-alone basisPeriod, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder shall reserve and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of authorized and unissued shares of Surviving Pubco Common Stock Company Ordinary Shares to permit Surviving Pubco the Company to satisfy its issuance obligations set forth in this Section 4.04 3.05 and will shall take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock Company Ordinary Shares if at any time there will shall be insufficient authorized and unissued shares of Surviving Pubco Common Stock company Ordinary Shares to permit such reservation.
(ec) The Company Contingent shall take such actions as are reasonably requested by Earnout Participants to evidence the issuances pursuant to this Section 3.05, including through the provision of an updated register of members (or extract thereof) showing such issuances (as certified by an officer of Company responsible for maintaining such register of members or the registered office provider of the Company).
(d) In the event the Company shall at any time during the Earnout Period pay any dividend on Company Ordinary Shares by the issuance of additional Company Ordinary Shares, or effect a subdivision or combination or consolidation of the issued and outstanding Company Ordinary Shares (by reclassification or otherwise) into a greater or lesser number of Company Ordinary Shares, then in each such case, (i) the underlying target price for each Company number of Earnout Condition will Shares shall be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend by multiplying such amount by a fraction the numerator of which is the number of Company Ordinary Shares (including any dividend or distribution other shares so reclassified as Company Ordinary Shares) issued and outstanding immediately after such event and the denominator of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange which is the number of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof Company Ordinary Shares that were issued and outstanding immediately prior to such event and (ii) the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will dollar values set forth in Section 3.05(a) above shall be made in order appropriately adjusted to provide to the Company Stockholders and Engaged Option Holders such Earnout Participant the same economic effect as contemplated by this Agreement prior to such event.
(e) During the Earnout Period, the Company shall take all reasonable efforts for (i) the Company to remain listed as if no change with respect a public company on, and for the Company Ordinary Shares (including, when issued, the Earnout Shares) to be tradable over, the Surviving Pubco Common Stock had occurredNasdaq and (ii) the Earnout Shares, when issued, to be approved for listing on the Nasdaq.
(f) For the avoidance of doubt, each Company Shareholder shall be entitled to receive Earnout Shares only upon the occurrence of each Earnout Event; provided, however, that each Earnout Event may only occur once, if at all, and in no event shall the Company Shareholder or any other Person be entitled to receive, nor shall the Company be obligated to issue, more than the product of (i) twelve million (12,000,000) Earnout Shares multiplied by (ii) the Pro Rata Portion.
(g) The rights of the Company Shareholders to receive the Earnout Shares are personal in nature and, except with the written consent of the Company, are non-transferable and non-assignable, except that each Company Shareholder shall be entitled to assign such rights by will or, by the laws of intestacy.
(h) The right of the Company Shareholders to receive the Earnout Shares shall not entitle the holder thereof to any voting or dividend rights otherwise granted to holders of Company Ordinary Shares (if any) prior to the issuance of such shares. For the avoidance of doubt the Company shall not be required to issue Company Ordinary Shares to the extent not permitted to do so by applicable Law, including by way of an exemption from registration under applicable securities Laws.
(i) In the event that after the Closing Date and no later than 60 months following prior to the Closing Date expiration of the Earnout Period, (i) there is a Change of Control (or a definitive agreement providing for a Change of Control has been entered into prior to the expiration of the Earnout Period and such Change of Control is ultimately consummated, even if such consummation occurs after the expiration of the Earnout Period), (ii) any liquidation, dissolution or winding up of the Company (whether voluntary of involuntary) is initiated, (iii) any bankruptcy, reorganization, debt arrangement or similar proceeding under any bankruptcy, insolvency or similar law, or any dissolution or liquidation proceeding, is instituted by or against the Company, or a receiver is appointed for the Company or a substantial part of its assets or properties or (iv) the Company makes an Earnout Trigger assignment for the benefit of creditors, or petitions or applies to any Governmental Authority for, or consents or acquiesces to, the appointment of a custodian, receiver or trustee for all or substantially all of its assets or properties (each of clauses (i) through (iv), an “Acceleration Event”), then any Earnout Shares that have not been previously issued by the Company Earnout Condition (whether or not previously satisfied earned) shall be deemed satisfied immediately prior earned and issued by the Company to the occurrence Earnout Participants upon such Acceleration Event pursuant to this Article III unless, in the case of an Acceleration Event that is a Change of Control, the value of the consideration to be received by the holders of the Company Ordinary Shares in such Change of Control transaction is less than the share price threshold applicable to the applicable Earnout Event; provided that the determinations of such Earnout Trigger Event consideration and value shall be determined in accordance with good faith by the following:
disinterested members of the Company Board; and provided, further that if there is a Change of Control pursuant to which (i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion holders of the Company Contingent Ordinary Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).
receive no consideration or (ii) If the Change of Control transaction is structured such that the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00Shares may still be earned, then none no Acceleration Event shall be deemed to have occurred, and the holders of the Company Contingent Ordinary Shares shall be issuedcontinue to have the right to receive Earnout Shares pursuant to this Agreement.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Earnout. (a) The Company Stockholders and the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 5,500,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 36 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 36 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 36 months following the Closing Date.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred.
(f) In the event that after the Closing Date and no later than 60 36 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 36 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
(iv) If the Earnout Trigger Event occurs at any time during the 36 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $15.00, but less than $18.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) and (ii) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
(v) If the Earnout Trigger Event occurs at any time during the 36 months following the Closing Date and results in an Earnout Trigger Price equal to or greater than $18.00, then all of the Company Contingent Shares shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Merger Agreement (Tuatara Capital Acquisition Corp)
Earnout. (a) The If, at any time during the seven (7) years following the Closing Date, the VWAP of Acquiror Common Stock is greater than or equal to $12.50 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the date when the foregoing is first satisfied, the “First Earnout Achievement Date”), subject to Section 3.1, Acquiror shall promptly issue to holders of Company Stockholders Capital Stock, Acquiror Options (excluding, for the avoidance of doubt, any Acquiror Options that have been forfeited or cancelled at any time from the Effective Time through the First Earnout Achievement Date without having been exercised) and Acquiror RSUs (excluding, for the Engaged Option Holders avoidance of doubt, any Acquiror RSUs that have been forfeited or cancelled at any time from the Effective Time through the First Earnout Achievement Date without having been settled) an aggregate of 3,333,333 Earnout Shares.
(b) If, at any time during the seven (7) years following the Closing, the VWAP of Acquiror Common Stock is greater than or equal to $15.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the date when the foregoing is first satisfied, the “Second Earnout Achievement Date”), subject to Section 3.1, Acquiror shall promptly issue to holders of Company Capital Stock, Acquiror Options (excluding, for the avoidance of doubt, any Acquiror Options that have been forfeited or cancelled at any time from the Effective Time through the Second Earnout Achievement Date without having been exercised) and Acquiror RSUs (excluding, for the avoidance of doubt, any Acquiror RSUs that have been forfeited or cancelled at any time from the Effective Time through the Second Earnout Achievement Date without having been settled) an aggregate of 3,333,333 Earnout Shares.
(c) If, at any time during the seven (7) years following the Closing, the VWAP of Acquiror Common Stock is greater than or equal to $17.50 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the date when the foregoing is first satisfied, the “Third Earnout Achievement Date”), subject to Section 3.1, Acquiror shall promptly issue to holders of Company Capital Stock, Acquiror Options (excluding, for the avoidance of doubt, any Acquiror Options that have been forfeited or cancelled at any time from the Effective Time through the Third Earnout Achievement Date without having been exercised) and Acquiror RSUs (excluding, for the avoidance of doubt, any Acquiror RSUs that have been forfeited or cancelled at any time from the Effective Time through the Third Earnout Achievement Date without having been settled) an aggregate of 3,333,334 Earnout Shares.
(d) For the avoidance of doubt, the holders of Company Capital Stock immediately prior to the Closing and Acquiror Options and Acquiror RSUs at the First Earnout Achievement Date, Second Earnout Achievement Date and Third Earnout Achievement Date, as applicable, shall be entitled to receive their pro rata portion the shares of such number of Company Contingent SharesAcquiror Common Stock described in Section 3.4(a), fully paid Section 3.4(b) and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below Section 3.4(c) only upon satisfaction of any the occurrence of the following conditions (eachFirst Earnout Achievement Date, an “Company the Second Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Achievement Date and the Third Earnout Achievement Date, respectively; provided, however, that each such date shall only occur once, if at all, and in no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date.
(b) Each Company Earnout Condition will event shall such holders be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right collectively entitled to receive any Company Contingent Shares is not transferable except by operation more than an aggregate of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued 10,000,000 shares of Surviving Pubco Acquiror Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservationStock.
(e) The Company Contingent Shares In the event that there is a Change of Control after the Closing and prior to the date that is seven (7) years following the Closing Date to the extent they have not already occurred, the First Earnout Achievement Date, the Second Earnout Achievement Date and the underlying target Third Earnout Achievement Date shall be deemed to occur on the day prior to the closing of such Change of Control, and (A) Acquiror shall issue the shares of Acquiror Common Stock issuable pursuant to this Section 3.4, on the date prior to the closing of such Change of Control (to the extent such shares of Acquiror Common Stock have not previously been issued), and (B) thereafter, the obligations in this Section 3.4 shall terminate and no longer apply.
(f) The Acquiror Common Stock price targets set forth in Section 3.4 shall be equitably adjusted for each Company Earnout Condition will be adjusted appropriately to reflect any stock splitsplits, reverse stock splitsplits, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock)dividends, reorganizationreorganizations, recapitalizationrecapitalizations, reclassificationreclassifications, combinationcombinations, exchange exchanges of shares or other like change changes or transactions with respect to the Surviving Pubco Acquiror Common Stock, Stock occurring on or after the date hereof Closing (other than the transactions contemplated by this Agreement).
(g) If the First Earnout Achievement Date, Second Earnout Achievement Date, Third Earnout Achievement Date or Change of Control has not occurred after the Closing and prior to the time any such Company Contingent Shares are issued. It date that is seven (7) years following the intent of Closing Date, the Parties that such adjustments will be made obligations in order to provide to the Company Stockholders Section 3.4 shall terminate and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurredlonger apply.
(fh) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Any issuance of Earnout Trigger Event, then any Shares in respect of Company Earnout Condition not previously satisfied Capital Stock to holders of such Company Capital Stock hereunder shall be deemed satisfied treated as comprised of two components, respectively a principal component and an interest component, the amounts of which shall be determined as provided in Reg. §1.483-4(b) example (2) using the 3-month test rate of interest provided for in Reg. §1.1274-4(a)(1)(ii) employing the semi-annual compounding period. As to each such issuance of Earnout Shares hereunder in respect of Company Capital Stock to each holder of such Company Capital Stock outstanding immediately prior to the occurrence of such Effective Time, Earnout Trigger Event in accordance Shares representing the principal component (with the following:
(i) If the Earnout Trigger Event occurs prior a value equal to the one-year anniversary of principal component) and Earnout Shares representing the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then interest component (with a portion of value equal to the Company Contingent Shares identified in Section 4.04(a)(iinterest component) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied represented by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)separate share certificates.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Earnout. (a) The Company Stockholders and the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if From and after the closing price period commencing on the six month anniversary of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on Closing until December 31, 2025, (the “First Calculation Period”), in the event that over any twenty (20) trading days in a consecutive Trading Days within any thirty (30)-trading-day 30)-Trading Day period at during the First Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than or equal to US$15.00 per share (the “First Earnout Event”), promptly (but in any time event within ten (10) Business Days) after the Closing Date and no later than 60 months following occurrence of the First Earnout Event, the Persons that were Company Securityholders immediately prior to the Effective Time (the “Earnout Securityholders”) shall be entitled to receive, their Pro Rata Portion, as set forth in the Closing Date;Consideration Spreadsheet, of one third of the Incentive Merger Consideration as additional consideration for the Merger.
(ii) 2,250,000 Company Contingent Shares if From and after the closing price six month anniversary of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on Closing until December 31, 2027 (the “Second Calculation Period”), in the event that over any twenty (20) trading days in a Trading Days within any thirty (30)-trading-day 30)-Trading Day period at during the Second Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than or equal to US$20.00 per share (the “Second Earnout Event”), promptly (but in any time event within ten (10) Business Days) after the Closing Date and no later than 60 months following occurrence of the Second Earnout Event, Earnout Securityholders shall be entitled to receive, their Pro Rata Portion, as set forth in the Closing Date; andConsideration Spreadsheet, of an additional one third of the Incentive Merger Consideration as additional consideration for the Merger.
(iii) 1,250,000 Company Contingent Shares if From and after the closing price six month anniversary of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on Closing until December 31, 2029 (the “Third Calculation Period”), in the event that over any twenty (20) trading days in a Trading Days within any thirty (30)-trading-day 30)-Trading Day period at any time after during the Closing Date and no later Third Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than 60 months following the Closing Date.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts or equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition US$25.00 per share (the “Third Earnout InstructionEvent” and, together with the First Earnout Event and Second Earnout Event, each a “Earnout Event” and together, the “Earnout Events”), with no action being required on promptly (but in any event within ten (10) Business Days) after the part occurrence of the Company Stockholders.
(c) Until Third Earnout Event, the Company Contingent Shares are issued in accordance with this Section 4.04Earnout Securityholders shall be entitled to receive, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distributiontheir Pro Rata Portion, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number Closing Consideration Spreadsheet, of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and an the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent final one third of the Parties that such adjustments will be made in order to provide to Incentive Merger Consideration, as additional consideration for the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurredMerger.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Earnout. (a) The After the Closing, subject to the terms and conditions set forth herein, the Company Stockholders Security Holders shall have the contingent right to receive up to an aggregate maximum of 59,000,000 shares of Pubco Common Stock (each valued at the Redemption Price) (subject to adjustment for share splits, share dividends, combinations, recapitalizations and the Engaged Option Holders shall be entitled like after the Closing, including to receive their pro rata portion of account for any equity securities into which such number of Company Contingent shares are exchanged or converted) (the “Earnout Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions”), as set forth below upon satisfaction of any additional consideration from Pubco based on the performance of the following conditions (eachPubco Common Stock, an “Company Earnout Condition”):as follows:
(i) 7,000,000 Company Contingent Shares if In the closing price event that the VWAP of the Surviving Pubco Common Stock equals or exceeds $12.00 12.50 per share on (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “First Share Price Target”) for any twenty (20) trading days in a out of any thirty (30)-trading-day 30) consecutive Trading Days during the period at any time after beginning on the Closing Date and no later than 60 ending on the date that is thirty (30) months following the Closing Date;Date (the “Earnout Period”), then, subject to the terms and conditions of this Agreement, Pubco shall issue to each of the Company Security Holders its Pro Rata Share of 29,500,000 Earnout Shares (the “First Earnout Share Payment”).
(ii) 2,250,000 Company Contingent Shares if In the closing price event that the VWAP of the Surviving Pubco Purchaser Common Stock equals or exceeds $15.00 per share on (as adjusted for stock splits, stock dividends, combinations, reorganizations and recapitalizations) (the “Second Share Price Target”) for any twenty (20) trading days in a out of any thirty (30)-trading-day period at any time after 30) consecutive Trading Days during the Closing Date Earnout Period, then subject to the terms and no later than 60 months following conditions of this Agreement, Pubco shall issue to each of the Closing Date; andCompany Security Holders its Pro Rata Share of 29,500,000 Earnout Shares (the “Second Earnout Share Payment”, and together with the First Earnout Share Payment, the “Earnout Share Payments”).
(iii) 1,250,000 Company Contingent Shares if For purposes of Section 1.17(a)(i)-(ii) above, the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day 30) consecutive Trading Day periods may be overlapping, such that the First Share Price Target and the Second Share Price Target may be achieved simultaneously or within thirty (30) consecutive Trading Days of each other or within any other time period at any time after the Closing Date and no later than 60 months following the Closing Dateof each other.
(b) The CFO will monitor the VWAP of the Pubco Common Stock each Trading Day, and as soon as practicable (and in any event within ten (10) Business Days) after the end of each monthly anniversary of the Closing through the earlier of (x) the end of the Earnout Period and (y) the date, if any, as of which the Second Share Price Target is finally determined pursuant to this Section 1.17(b) to have been achieved, the CFO will prepare and deliver to each Representative Party a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of the Pubco Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly periods since the Closing and (ii) whether the First Share Price Target and/or the Second Share Price Target has been achieved. Each Company Earnout Condition Representative Party will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five have ten (510) Business Days after its receipt of an Earnout Statement to review it. Each Representative Party, and its Representatives on its behalf, may make inquiries to the last trading day CFO and related Pubco and Company personnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and Pubco and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to an Earnout Statement, such thirty-day Representative Party shall deliver to Pubco (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within twenty (20) Business Days following the date of delivery of each Earnout Statement, then such Representative Party will have waived its right to contest such Earnout Statement and the calculation of the VWAP of the Pubco Common Stock during the applicable portion of the Earnout Period (and whether the First Share Price Target and/or the Second Share Price Target, as applicable, has been achieved) as set forth therein. If such written statement is delivered by a Representative Party within such twenty (20) Business Day period, Surviving Pubco then the Seller Representative and the Purchaser Representative shall instruct negotiate in good faith to resolve any such objections for a period of ten (10) Business Days thereafter. If the Exchange Agent to issue Representative Parties do not reach a final resolution within such ten (10) Business Day period, then upon the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number written request of Company Contingent Shares corresponding either Representative Party, the Representative Parties will refer the dispute to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part Independent Expert for final resolution of the Company Stockholdersdispute in accordance with the procedures set forth in Section 1.15(c).
(c) Until the Company Contingent Shares are issued If there is a final determination in accordance with this Section 4.04, (i1.17(b) that the right Company Security Holders are entitled to receive any Company Contingent Earnout Shares is not transferable except by operation of Law relating to descent for having achieved the First Share Price Target and/or the Second Share Price Target, the applicable Earnout Shares will become due upon such final determination and distribution, divorce and community property of Pubco will deliver such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and shares within ten (ii10) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunderBusiness Days thereafter.
(d) From and after Following the Closing, Pubco and its Subsidiaries, including the Target Companies, will be entitled to operate their respective businesses based upon their respective business requirements. Each of Pubco and its Subsidiaries, including the Target Companies, will be permitted, following the Closing, to make changes at all times a Company Contingent Share remains subject its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an Company Earnout Conditionimpact on, Surviving Pubco will keep available for issuance a sufficient number the share price of unissued shares of Surviving the Pubco Common Stock and the ability of the Company Security Holders to earn the Earnout Shares, and no Person will have any right to claim the loss of all or any portion of any Earnout Shares or other damages as a result of such decisions. Notwithstanding anything to the contrary contained herein, each of Pubco and its Subsidiaries, including the Target Companies after Closing, shall not, directly or indirectly, take any action, or cause or permit Surviving Pubco anything to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase be done with the authorized number purpose of shares avoiding or reducing the amount of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservationEarnout Share Payment.
(e) The Company Contingent Shares and For the underlying target price for each Company avoidance of doubt, the Earnout Condition Share Payments are cumulative but earnable solely on an all-or-nothing basis, such that there will be adjusted appropriately no entitlement to reflect a partial award of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange Earnout Share Payment. The number of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred.
(f) In constituting any Earnout Share Payment shall be equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the event that like after the Closing Date and no later than 60 months following Closing. Subject to the Closing Date there is an foregoing sentence, the aggregate maximum number of shares of Purchaser Common Stock issuable as Earnout Trigger Event, then any Company Earnout Condition not previously satisfied Share Payments shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
fifty-nine million (i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 259,000,000).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Benessere Capital Acquisition Corp.)
Earnout. Following the Closing, in addition to the consideration to be received pursuant to 3.01 and 3.04, the Company Stockholders and Earnout RSU Grantees shall be issued additional shares of Acquiror Common Stock, as follows:
(a) The Company Stockholders Acquiror shall issue 600,000 shares of Acquiror Common Stock, in the aggregate, if at any time during the period beginning on the Closing Date and ending on December 31, 2023 (the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares“First Earnout Period”), fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any the VWAP of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Acquiror Common Stock equals or exceeds $12.00 per share on over any twenty (20) trading days in a Trading Days (which may or may not be consecutive) within any thirty (30)-trading-day 30) consecutive Trading Day period is greater than or equal to $17.50 per share of Acquiror Common Stock (the “First Milestone”) (such 600,000 shares of Acquiror Common Stock, the “First Milestone Earnout”). Acquiror shall not be obligated to issue the First Milestone Earnout if the First Milestone is not achieved during the First Earnout Period.
(b) Acquiror shall issue an additional 600,000 shares of Acquiror Common Stock, in the aggregate, if at any time after during the period beginning on the Closing Date and no later than 60 months following ending on December 31, 2025 (the Closing Date;
(ii) 2,250,000 Company Contingent Shares if “Second Earnout Period”), the closing price VWAP of the Surviving Pubco Acquiror Common Stock equals or exceeds $15.00 per share on over any twenty (20) trading days in a Trading Days (which may or may not be consecutive) within any thirty (30)-trading-day 30) consecutive Trading Day period is greater than or equal to $25.00 per share of Acquiror Common Stock (the “Second Milestone”) (such 600,000 shares of Acquiror Common Stock, the “Second Milestone Earnout”). Acquiror shall not be obligated to issue the Second Milestone Earnout if the Second Milestone is not achieved during the Second Earnout Period.
(c) Acquiror shall issue an additional 800,000 shares of Acquiror Common Stock, in the aggregate, if at any time after during the period beginning on the Closing Date and no later than 60 months following ending on December 31, 2027 (the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if “Third Earnout Period” and together with the closing price First Earnout Period and the Second Earnout Period, each, an “Earnout Period” and collectively, the “Earnout Periods”), the VWAP of the Surviving Pubco Acquiror Common Stock equals or exceeds $18.00 per share on over any twenty (20) trading days in a Trading Days (which may or may not be consecutive) within any thirty (30)-trading-day 30) consecutive Trading Day period at any time after is greater than or equal to $35.00 per share of Acquiror Common Stock (the Closing Date “Third Milestone” and together with the First Milestone and the Second Milestone, the “Earnout Milestones”) (such 800,000 shares of Acquiror Common Stock, the “Third Milestone Earnout” and together with the First Milestone Earnout and the Second Milestone Earnout, the “Earnout Consideration”). Acquiror shall not be obligated to issue the Third Milestone Earnout if the Third Milestone is not achieved during the Third Earnout Period. For the avoidance of doubt, the Earnout Consideration in respect of each Earnout Milestone will be issued and earned only once and the Earnout Consideration shall in no later than 60 months following event exceed 2,000,000 shares of Acquiror Common Stock, in the Closing Dateaggregate.
(bd) Each Company If any of the Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfiedMilestones set forth in this Section 3.09 shall have been achieved, within five three (53) Business Days after Day following the last trading day in such thirty-day periodachievement of the applicable Earnout Milestone, Surviving Pubco Acquiror shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom applicable Per Share Earnout Consideration to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s Earnout RSU Grantee who holds a vested Earnout RSU Award (which issuance shall result in the settlement and Employee Option Holder’s Applicable Percentage multiplied by payment of such number Earnout RSU Award). For purposes of Company Contingent Shares corresponding clarity, any shares of Acquiror Common Stock with respect to an Earnout RSU Award shall be issued under the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company StockholdersAcquiror Equity Incentive Plan.
(ce) Until If any of the Company Contingent Shares are issued Earnout Milestones set forth in accordance with this Section 4.043.09 shall not have been achieved on or prior to the end of its applicable Earnout Period, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders Earnout RSU Grantees shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ no further right to receive any Company Contingent Shares hereunderthe applicable Earnout Consideration.
(df) From and after the Closing, at At all times a Company Contingent Share remains subject to an Company during the Earnout ConditionPeriods, Surviving Pubco will Acquiror shall keep available for issuance a sufficient number of unissued shares of Surviving Pubco unissued Acquiror Common Stock to permit Surviving Pubco Acquiror to satisfy in full its issuance obligations set forth in this Section 4.04 3.09 and will shall take all actions reasonably required (including by convening any stockholder meeting) to increase the authorized number of shares of Surviving Pubco Acquiror Common Stock if at any time there will shall be insufficient unissued shares of Surviving Pubco Acquiror Common Stock to permit such reservation.
(eg) The Acquiror shall take such actions as are reasonably requested by Company Contingent Shares and Stockholders to evidence the underlying target price issuances pursuant to this Section 3.09, including through the provision of an updated stock ledger showing such issuances (as certified by an officer of Acquiror responsible for maintaining such ledger or the applicable registrar or transfer agent of Acquiror).
(h) In the event Acquiror shall at any time during the applicable Earnout Period pay any dividend on Acquiror Common Stock by the issuance of additional Acquiror Common Stock, or effect a subdivision or combination or consolidation of the outstanding Acquiror Common Stock (by reclassification or otherwise) into a greater or lesser number of Acquiror Common Stock, then in each Company such case, (i) the number of shares of Acquiror Common Stock comprising the applicable portion of the Earnout Condition will Consideration shall be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend by multiplying such amount by a fraction the numerator of which is the number of shares of Acquiror Common Stock (including any dividend or distribution of securities convertible into Surviving Pubco other shares so reclassified as Acquiror Common Stock), reorganization, recapitalization, reclassification, combination, exchange ) outstanding immediately after such event and the denominator of which is the number of shares or other like change with respect to the Surviving Pubco of Acquiror Common Stock, occurring on or after the date hereof and Stock that were outstanding immediately prior to such event and (ii) the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will dollar values set forth in Sections 3.09(a) through (c) above shall be made in order appropriately adjusted to provide to the such Company Stockholders and Engaged Option Holders Earnout RSU Grantees the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurred.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:event.
(i) If During the Earnout Trigger Event occurs Periods, Acquiror shall use reasonable best efforts for (i) Acquiror to remain listed as a public company on, and for the Acquiror Common Stock (including, when issued, the Earnout Consideration) to be tradable over, the NYSE and (ii) the Earnout Consideration, when issued, to be approved for listing on the NYSE; provided, however, that subject to Section 3.09(j), the foregoing shall not limit Acquiror from consummating a Change in Control or entering into a Contract that contemplates a Change in Control.
(j) Upon the consummation of any Change in Control during any Earnout Period, any Earnout Milestone with respect to such Earnout Period that has not yet been achieved shall automatically be deemed to have been achieved regardless of the valuation of the Acquiror Common Stock in such Change in Control transaction and Acquiror shall take all actions necessary to provide for the issuance of the shares of Acquiror Common Stock comprising the applicable Earnout Consideration payable in connection with this Section 3.09(j) prior to the one-year anniversary consummation of the Closing Date and results such Change in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)Control.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Merger Agreement (Chardan Healthcare Acquisition 2 Corp.)
Earnout. (a) The Company Stockholders and If, at any time during the Engaged Option Holders shall be entitled five (5) years following the Closing (the “Earnout Period”), the Plum Common Share Price is greater than or equal to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on 12.50 for any twenty (20) trading days Trading Days within any thirty- (30-) Trading Day period (such time when the foregoing is first satisfied, the “First Earnout Achievement Date”), Plum shall, as additional consideration in the First Merger in respect of shares of Company Capital Stock, Company Options, Company Warrants and Company Convertible Notes (and without the need for additional consideration from any holder thereof), promptly issue to each Company Securityholder, a thirty number of shares of New Plum Common Shares equal to the product of (30)-trading-day period i) such Company Securityholder’s Pro Rata Share multiplied by (ii) 2,000,000;
(b) If, at any time after during the Closing Date and no later Earnout Period, the Plum Common Share Price is greater than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds equal to $15.00 per share on for any twenty (20) trading days Trading Days within any thirty- (30-) Trading Day period (such time when the foregoing is first satisfied, the “Second Earnout Achievement Date”), Plum shall, as additional consideration in the First Merger in respect of shares of Company Capital Stock, Company Options, Company Warrants and Company Convertible Notes (and without the need for additional consideration from any holder thereof), promptly issue to each Company Securityholder, a thirty number of shares of New Plum Common Shares equal to the product of (30)-trading-day period i) such Company Securityholder’s Pro Rata Share multiplied by (ii) 2,000,000; and
(c) If, at any time after during the Closing Date and no later Earnout Period, the Plum Common Share Price is greater than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds equal to $18.00 per share on 17.50 for any twenty (20) trading days in a thirty Trading Days within any thirty- (30)-trading-day 30-) Trading Day period at any (such time after when the Closing Date and no later than 60 months following the Closing Date.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition foregoing is first satisfied, within five the “Third Earnout Achievement Date”), Plum shall, as additional consideration in the First Merger in respect of shares of Company Capital Stock, Company Options, Company Warrants and Company Convertible Notes (5) Business Days after and without the last trading day in such thirty-day periodneed for additional consideration from any holder thereof), Surviving Pubco shall instruct the Exchange Agent to promptly issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts Securityholder, a number of shares of New Plum Common Shares equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number the product of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and Securityholder’s Pro Rata Share multiplied by (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder2,000,000.
(d) From and after Notwithstanding the Closingforegoing, at all times no New Plum Common Shares shall be released to any Company Securityholder who is required to file notification pursuant to the HSR Act or under any applicable antitrust or other competition Laws of any non-U.S. jurisdictions (collectively, “Foreign Antitrust Laws”) until any applicable waiting period pursuant to the HSR Act or Foreign Antitrust Laws has expired or been terminated (provided that any such Company Securityholder has notified Plum of such required filing pursuant to the HSR Act or Foreign Antitrust Laws in connection therewith following reasonable advance notice from Plum of the reasonably anticipated issuance of New Plum Common Shares).
(e) If, on or before the last day of the Earnout Period, there is a Company Contingent Share remains Change of Control Transaction that will result in the holders of New Plum Common Shares receiving a per share price equal to or in excess of the applicable VWAP required in connection with any earnout triggered under this Section 2.03 (each an “Earnout Triggering Event”), then immediately prior to the consummation of such Change of Control Transaction: (a) any Earnout Triggering Event subject to an the applicable price thresholds achieved or exceeded in connection with such Change of Control Transaction that has not previously occurred shall be deemed to have occurred and shall immediately vest and the Company Earnout ConditionSecurityholder shall receive the same per share consideration (whether stock, Surviving Pubco will keep available for issuance a sufficient number cash or other property) in respect of unissued such New Plum Common Shares as the holders of ordinary shares of Surviving Pubco Plum participating in such Change of Control Transaction; and (b) in the case of any Change of Control Transaction other than a Rollover Change of Control Transaction, Plum shall negotiate in good faith with the acquiror in such Change of Control Transaction, and use reasonable efforts to agree with the acquiror, the treatment of any Earnout Triggering Event subject to applicable price thresholds that are not achieved or exceeded in connection with such Change of Control Transaction that will not vest in connection with such Change of Control Transaction (“Unvested New Plum Common Stock Shares”) such that any Unvested New Plum Common Share will continue to permit Surviving Pubco be entitled to satisfy its issuance obligations the economic substance of the rights set forth in this Section 4.04 2.03. For the avoidance of doubt, any Unvested New Plum Common Shares that will not vest in connection with a Change of Control Transaction will continue as Unvested New Plum Common Shares on and subject to the terms of this Agreement and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will not be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservationforfeited or cancelled.
(ef) The Notwithstanding the foregoing or anything to the contrary herein, any Earnout Consideration issuable pursuant to this Section 2.03 to a Company Contingent Shares Securityholder in respect of a Company Option (other than the Designated Pre-Closing Options) shall be earned by such Company Securityholder on the earlier of (a) the occurrence of the applicable Earnout Achievement Date, and (b) an applicable Earnout Triggering Event, but in each case only if such Company Securityholder continues to provide services (whether as an employee, director or individual independent contractor) to Plum or one of its Subsidiaries through such date. Any Earnout Consideration that is forfeited by a Company Securityholder in respect of a Company Option pursuant to this Section 2.03(f) shall be reallocated to the underlying target price for each Company Earnout Condition will be adjusted appropriately Securityholders who are Company Shareholders as of immediately prior to reflect the First Effective Time.
(g) In the event of any stock splitdividend, reverse stock splitsubdivision, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock)reclassification, reorganization, recapitalization, reclassificationsplit, combination, combination or exchange of shares or any similar event (other like change with respect to than, for the Surviving Pubco avoidance of doubt, the Transactions) affecting the New Plum Common Stock, occurring on or Shares after the date hereof of this Agreement, the Earnout Triggering Events and prior the number of New Plum Common Shares to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order issued by Plum shall be equitably adjusted to provide to the each Company Stockholders and Engaged Option Holders Securityholder the same economic effect as contemplated by this Agreement as if no change with respect prior to the Surviving Pubco Common Stock had occurredsuch event.
(fh) In Notwithstanding anything to the event contrary in Section 2.01 or this Section 2.03, no amount shall be allocated or paid pursuant to Section 2.03 in respect of any Company Option except to the extent permissible under Treasury Regulation 1.409A- 3(i)(5)(iv)(A); provided, that after the Closing Date and no later than 60 months such amounts shall be allocated or paid in respect of any Company Option following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
fifth (i5th) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)Date.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Business Combination Agreement (Plum Acquisition Corp. I)
Earnout. (a) The Company Stockholders After the Closing, subject to the terms and conditions set forth herein, the Engaged Option Holders Earnout Sellers shall be entitled have the contingent right to receive their pro rata portion Earnout Pro Rata Share of such up to a number of Company Contingent additional shares of Purchaser Class A Common Stock equal to fifty-four million (54,000,000) multiplied by the Purchased Share Percentage (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions”), as set forth below upon satisfaction of any additional consideration from the Purchaser based on the performance of the following conditions Purchaser Class A Common Stock during the five (each, an 5) year period after the Closing (the “Company Earnout ConditionPeriod”):). The Earnout Sellers’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) 7,000,000 Company Contingent Shares if in the closing price event that the VWAP of the Surviving Pubco Purchaser Class A Common Stock equals or exceeds $12.00 12.50 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier I Share Price Target”) for twenty (20) trading days in a Trading Days within any thirty (30)-trading-day 30) Trading Day period at any time after during the Closing Date Earnout Period, then, subject to the terms and no later than 60 months following conditions of this Agreement, the Closing Date;Earnout Sellers shall be entitled to receive a number of Earnout Shares equal to fifteen million (15,000,000) multiplied by the Purchased Share Percentage;
(ii) 2,250,000 Company Contingent Shares if in the closing price event that the VWAP of the Surviving Pubco Purchaser Class A Common Stock equals or exceeds $15.00 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier II Share Price Target”) for twenty (20) trading days in a Trading Days within any thirty (30)-trading-day 30) Trading Day period at any time after during the Closing Date Earnout Period, then, subject to the terms and no later than 60 months following conditions of this Agreement, the Closing Date; Earnout Sellers shall be entitled to receive an additional number of Earnout Shares equal to eighteen million (18,000,000) multiplied by the Purchased Share Percentage; and
(iii) 1,250,000 Company Contingent Shares if in the closing price event that the VWAP of the Surviving Pubco Purchaser Class A Common Stock equals or exceeds $18.00 17.50 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier III Share Price Target” and, together with the Tier I Share Price Target and the Tier II Share Price Target, the “Share Price Targets”) for twenty (20) trading days in a Trading Days within any thirty (30)-trading30) Trading Day period during the Earnout Period, then, subject to the terms and conditions of this Agreement, the Earnout Sellers shall be entitled to receive the remaining Earnout Shares equal to twenty-day period at one million (21,000,000) multiplied by the Purchased Share Percentage. In the event that an applicable Share Price Target is not met during the Earnout Period, the Earnout Sellers shall not be entitled to receive the applicable portion of the Earnout Shares. For the avoidance of doubt, Earnout Shares shall vest and be issued only in connection with the first achievement of an applicable Share Price Target during the Earnout Period, and the Earnout Sellers shall not be entitled to Earnout Shares for any time after subsequent achievement of a Share Price Target that has already been achieved and for which Earnout Shares have been issued. The achievement of any Share Price Target shall be deemed to include the Closing Date achievement of any lower Share Price Target, and the Purchaser shall issue the Earnout Shares attributable to each Share Price Target together (upon which such lower included Share Price Targets shall be deemed achieved and no later than 60 months following the Closing Datefurther Earnout Shares shall become payable upon subsequent achievements of such lower included Share Price Targets).
(b) Each Company Notwithstanding the foregoing, in the event that during the Earnout Condition Period (i) the Purchaser is subject to a Change of Control or (ii) the Purchaser engages in a “going private” transaction pursuant to Rule 13e-3 under the Exchange Act, in either case of clauses (i) or (ii), at an express or implied price per share in the applicable transaction (the “Triggering Transaction Price”) in an amount equal to or greater than a Share Price Target for which Earnout Shares have not previously vested (a “Triggering Event”), then, subject to the terms and conditions of the Agreement, the Earnout Sellers shall be entitled to receive such Earnout Seller’s Earnout Pro Rata Share of any Earnout Shares for which the Triggering Transaction Price is in excess of any Share Price Targets that have not previously been achieved and for which the related Earnout Shares have not previously vested.
(c) Purchaser’s Chief Financial Officer (the “CFO”) shall monitor the VWAP of Purchaser Class A Common Stock on each Trading Day during the Earnout Period, and as soon as practicable (and in any event within ten (10) Business Days) after the end of each monthly anniversary of the Closing during the Earnout Period, the CFO will be evaluated prepare and deliver to each of the Seller Representative and the Purchaser Representative (each, a “Representative Party”) a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of Purchaser Class A Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly period and (ii) whether a stand-alone basisShare Price Target has been achieved during the preceding two (2) monthly anniversary periods. Similarly, without reference to as soon as practicable, and in any other Company Earnout Condition. If a Company Earnout Condition is satisfied, event within five (5) Business Days after a Triggering Event, the last trading day CFO will send an Earnout Statement to each Representative Party indicating that a Triggering Event has occurred, along with the details of such Triggering Event. Each Representative Party will have ten (10) Business Days after its receipt of an Earnout Statement to review it, and each Representative Party and its Representatives on its behalf may make inquiries to the CFO and related Purchaser and Company personnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to an Earnout Statement, such thirty-day Representative Party shall deliver to the Purchaser (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within ten (10) Business Days following the date of delivery of each Earnout Statement, then such Representative Party will have waived its right to contest such Earnout Statement and the calculation of the VWAP of Purchaser Class A Common Stock during the applicable portion of the Earnout Period (and whether a Share Price Target has been achieved) or whether a Triggering Event has occurred as set forth therein. If such written statement is delivered by a Representative Party within such ten (10) Business Day period, Surviving Pubco then the Representative Parties shall instruct negotiate in good faith to resolve any such objections for a period of ten (10) Business Day thereafter. If the Exchange Agent to issue Representative Parties do not reach a final resolution within such ten (10) Business Day period, then upon the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number written request of Company Contingent Shares corresponding either Representative Party the Representative Parties will refer the dispute to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part Independent Expert for final resolution of the Company Stockholdersdispute in accordance with Section 1.3(d).
(cd) Until the Company Contingent Shares are issued If a dispute with respect to an Earnout Statement is submitted in accordance with this Section 4.041.3 to the Independent Expert for final resolution, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) Parties will follow the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations procedures set forth in this Section 4.04 and will take all actions required to increase 1.3(d). Each of the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares Seller Representative and the underlying target price for each Company Earnout Condition will be adjusted appropriately Purchaser Representative agrees to reflect any stock splitexecute, reverse stock splitif requested by the Independent Expert, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change a reasonable engagement letter with respect to the Surviving Pubco Common Stockdetermination to be made by the Independent Expert. All fees and expenses of the Independent Expert, occurring and all other out-of-pocket costs and expenses incurred by a Representative Party in connection with resolving any dispute hereunder before the Independent Expert, will be borne by the Purchaser. The Independent Expert will determine only those issues still in dispute as of the Independent Expert Notice Date and the Independent Expert’s determination will be based solely upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Expert will be based solely on or after presentations with respect to such disputed items by the date hereof Purchaser Representative and prior the Seller Representative to the time Independent Expert and not on the Independent Expert’s independent review with the Independent Expert making its determination with respect to each issue by selecting the applicable position submitted by either the Purchaser Representative or Seller Representative in their respective presentation; provided, that such presentations will be deemed to include any work papers, records, accounts or similar materials delivered to the Independent Expert by a Representative Party in connection with such Company Contingent Shares are issuedpresentations and any materials delivered to the Independent Expert in response to requests by the Independent Expert. Each of the Seller Representative and the Purchaser Representative will use their reasonable efforts to make their respective presentations as promptly as practicable following submission to the Independent Expert of the disputed items, and each such Representative Party will be entitled, as part of its presentation, to respond to the presentation of the other Representative Party and any questions and requests of the Independent Expert. In deciding any matter, the Independent Expert will be bound by the provisions of this Agreement, including this Section 1.3. It is the intent of the Parties parties hereto that such adjustments will the activities of the Independent Expert in connection herewith are not (and should not be made in order considered to provide to the Company Stockholders be or treated as) an arbitration proceeding or similar arbitral process and Engaged Option Holders the same economic effect as contemplated by this Agreement as if that no change formal arbitration rules should be followed (including rules with respect to procedures and discovery). The Representative Parties will request that the Surviving Pubco Common Stock had Independent Expert’s determination be made within forty-five (45) days after its engagement, or as soon thereafter as possible, will be set forth in a written statement delivered to the Representative Parties and will be final, conclusive, non-appealable and binding for all purposes hereunder (other than for fraud or manifest error).
(e) If there is a final determination in accordance with this Section 1.3 that the Earnout Sellers are entitled to receive any of the Earnout Shares for having achieved a Share Price Target or as a result of a Triggering Event having occurred, the applicable portion of the Earnout Shares will be due upon such final determination and Purchaser will deliver such shares to the Earnout Sellers within ten (10) Business Days thereafter, with each Earnout Seller receiving its Earnout Pro Rata Share of such Earnout Shares.
(f) In the event that after Following the Closing Date (including during the Earnout Period), Purchaser and no later than 60 months its Subsidiaries, including the Target Companies, will be entitled to operate their respective businesses based upon the business requirements of Purchaser and its Subsidiaries. Each of Purchaser and its Subsidiaries, including the Target Companies will be permitted, following the Closing Date there is (including during the Earnout Period), to make changes at its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an impact on, the VWAP of Purchaser Class A Common Stock and the ability of the Earnout Trigger EventSellers to earn the Earnout Shares, then and the Earnout Sellers will not have any Company right to claim the loss of all or any portion of any Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence Shares or other damages as a result of such Earnout Trigger Event decisions. Notwithstanding the foregoing, Purchaser shall not, and shall cause its Subsidiaries, including the Target Companies, to not, take or omit to take any action that is in accordance with bad faith and has the following:primary purpose of avoiding, reducing or preventing the achievement or attainment of the Share Price Targets.
(g) TAG Partners Ltd., as a Signing Seller, on behalf of itself and its transferees and assignees, hereby (i) If the Earnout Trigger Event occurs prior acknowledges and agrees that it and its transferees and assignees will not be entitled to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a receive any portion of the Company Contingent Earnout Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders under this Agreement for its Purchased Shares, and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be that the Earnout Trigger Price minus $10 Shares will instead go to all of the other Sellers under this Agreement, and (B) the denominator of which is 2).
(ii) If irrevocably waives any potential rights, claims or actions with respect to the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Shares or its failure to receive any Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issuedor its resulting disproportionately lower consideration for its Purchased Shares under this Agreement.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Business Combination Agreement (Apeiron Capital Investment Corp.)
Earnout. (a) The After the Closing, subject to the terms and conditions set forth herein, the Company Stockholders and the Engaged Option Holders Interest Holders, as applicable, shall be entitled to receive issued their pro rata portion of such a number of Company Contingent (i) Surviving Pubco Class A Shares and (ii) Class B Units (which shall trigger issuance of an equal number of Surviving Pubco Class V Shares) equal, in the aggregate, to 10,389,359, in each case as set forth on the Transaction Consideration Schedule (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), as additional consideration based on the performance of Surviving Pubco Class A Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictionsduring the five (5) year period after the Closing (the “Earnout Period”), as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if In the closing price event that (x) the VWAP of the Surviving Pubco Common Stock Class A Shares equals or exceeds $12.00 14.00 per share on any (the “Tier I Share Price Target”) for twenty (20) of thirty (30) consecutive trading days during the Earnout Period, or (y) Surviving Pubco consummates a Change of Control in which results in the stockholders of Surviving Pubco having the right to exchange their shares for cash, securities or other property having a thirty value equaling or exceeding the Tier I Share Price Target (30)-tradingfor any non-day period at any time after cash proceeds, as determined based on the Closing Date agreed valuation set forth in the applicable definitive agreements for such transaction or, in the absence of such valuation, as determined in good faith by Surviving Pubco board of directors) then, in each case, subject to the terms and no later than 60 months following conditions of this Agreement, the Closing Date;Company Interest Holders shall be entitled to receive from the Surviving Pubco, as additional consideration, 50% of the Earnout Shares.
(ii) 2,250,000 Company Contingent Shares if In the closing price event that (x) the VWAP of the Surviving Pubco Common Stock Class A Shares equals or exceeds $15.00 16.00 per share on any (the “Tier II Share Price Target”, and together with the Tier I Share Price Target, the “Share Price Targets”) for twenty (20) of any thirty (30) consecutive trading days during the Earnout Period, or (y) Surviving Pubco consummates a Change of Control which results in the stockholders of Surviving Pubco having the right to exchange their shares for cash, securities or other property having a thirty value equaling or exceeding the Tier II Share Price Target (30)-tradingfor any non-day period at any time after cash proceeds, as determined based on the Closing Date agreed valuation set forth in the applicable definitive agreements for such transaction or, in the absence of such valuation, as determined in good faith by Surviving Pubco board of directors) then, in each case, subject to the terms and no later than 60 months following conditions of this Agreement, the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if Interest Holders shall be entitled to receive from Surviving Pubco, as additional consideration, the closing price remaining 50% of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing DateEarnout Shares.
(b) In the event that a Share Price Target is not met during the Earnout Period, the Company Interest Holders shall not be entitled to receive the applicable portion of the Earnout Shares.
(c) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company an Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, or immediately prior to the consummation of the Change of Control, if applicable, the Surviving Pubco shall instruct the Exchange Agent to to, or the Surviving Company shall, as applicable, issue the Company Contingent Earnout Shares earned therefrom to each Company Stockholder and Engaged Option Interest Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to as set forth in the applicable Company Earnout Condition Transaction Consideration Schedule (the “Earnout Instruction”), with no action being required on the part of the Company StockholdersInterest Holders. For the avoidance of doubt, a Company Interest Holder does not need to hold any securities in Surviving Pubco at the time an Earnout Condition is satisfied in order to be eligible to receive Earnout Shares.
(cd) Until the Company Contingent Earnout Shares are issued in accordance with this Section 4.04Section 3.4, (i) the right to receive any Company Contingent Earnout Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holderproperty, and does not constitute an equity or ownership interest in the Surviving PubcoPubco or the Company, and (ii) the Company Stockholders and Engaged Option Interest Holders shall not have any rights as a shareholder of the Surviving Pubco or a Member of the Company as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Earnout Shares hereunder.
(de) From and after the Closing, at all times a Company Contingent an Earnout Share remains subject to an Company Earnout Condition, the Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock Class A Shares or Surviving Pubco Class V Shares to permit the Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 Section 3.4 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock Class A Shares or Surviving Pubco Class V Shares if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock Class A Shares or Surviving Pubco Class V Shares to permit such reservation.
(ef) The Company Contingent Earnout Shares and the underlying target price for each Company Earnout Condition set forth in Section 3.4(a) will be adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common StockClass A Shares), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common StockClass A Shares, occurring on or after the date hereof and prior to the time any such Company Contingent Earnout Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Interest Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock Class A Shares had occurred.
(fg) In Except to the event that extent required to be treated as interest under applicable Law, any issuance made pursuant to Section 3.4 shall be treated as a non-taxable adjustment to the Merger Consideration by the Parties for all applicable Tax purposes, unless otherwise required by a change in applicable Tax Law after the Closing Date and no later than 60 months following date of this Agreement or a final determination within the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence meaning of such Earnout Trigger Event in accordance with the following:
(isection 1313(a)(1) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2)Code.
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Earnout. (a) The After the Closing, subject to the terms and conditions set forth herein, the Company Stockholders shall have the contingent right to receive up to an aggregate maximum of 19,000,000 shares of Purchaser Common Stock (subject to adjustment for share splits, share dividends, combinations, recapitalizations and the Engaged Option Holders shall be entitled like after the Closing, including to receive their pro rata portion of account for any equity securities into which such number of Company Contingent shares are exchanged or converted) (the “Earnout Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions”), as set forth below upon satisfaction of any additional consideration from the Purchaser based on the performance of the following conditions (eachPurchaser Common Stock, an “Company Earnout Condition”):as follows:
(i) 7,000,000 Company Contingent Shares if In the closing price event that the VWAP of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Purchaser Common Stock equals or exceeds $15.00 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “First Share Price Target”) for twenty (20) trading days in a out of any thirty (30)-trading-day 30) consecutive Trading Days during the period at any time after beginning on the Closing Date and no later than 60 months following ending on the 36-month anniversary of the Closing Date; andDate (such period the “Earnout Period”), then, subject to the terms and conditions of this Agreement, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 5,000,000 Earnout Shares and the Sponsor shall be issued 1,000,000 Earnout Shares (the “First Earnout Share Payment”).
(iiiii) 1,250,000 Company Contingent Shares if In the closing price event that the VWAP of the Surviving Pubco Purchaser Common Stock equals or exceeds $18.00 17.50 per share on any (as adjusted for stock splits, stock dividends, combinations, reorganizations and recapitalizations) (the “Second Share Price Target”) for twenty (20) trading days in a out of any thirty (30)-trading-day period at 30) consecutive Trading Days during the Earnout Period, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 7,000,000 Earnout Shares and the Sponsor shall be issued 1,000,000 Earnout Shares (the “Second Earnout Share Payment”).
(iii) In the event that the VWAP of the Purchaser Common Stock equals or exceeds $20.00 per share (as adjusted for stock splits, stock dividends, combinations, reorganizations and recapitalizations) (the “Third Share Price Target”, and together with the First Share Price Target and the Second Share Price Target, the “Share Price Targets”) for twenty (20) out of any time after thirty (30) consecutive Trading Days during the Closing Date Earnout Period, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 7,000,000 shares of Purchaser Common Stock and no later than 60 months following the Closing DateSponsor shall be issued 1,000,000 Earnout Shares (the “Third Earnout Share Payment”, and together with the First Earnout Share Payment and the Second Earnout Share Payment, the “Earnout Share Payments”).
(b) The CFO will monitor the VWAP of the Purchaser Common Stock each Trading Day, and as soon as practicable (and in any event within ten (10) Business Days) after the end of each monthly anniversary of the Closing through the earlier of (x) the 37-month anniversary of the Closing and (y) the date, if any, as of which the Third Share Price Target is finally determined pursuant to this Section 1.18(b) to have been achieved, the CFO will prepare and deliver to each Representative Party a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of the Purchaser Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly periods since the Closing and (ii) whether a Share Price Target has been achieved. Each Company Earnout Condition Representative Party will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five have ten (510) Business Days after its receipt of an Earnout Statement to review it. Each Representative Party, and its Representatives on its behalf, may make inquiries to the last trading day CFO and related Purchaser and Company personnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and the Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to an Earnout Statement, such thirty-day Representative Party shall deliver to the Purchaser (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within twenty (20) Business Days following the date of delivery of each Earnout Statement, then such Representative Party will have waived its right to contest such Earnout Statement and the calculation of the VWAP of the Purchaser Common Stock during the applicable portion of the Earnout Period (and whether the Share Price Targets has been achieved) as set forth therein. If such written statement is delivered by a Representative Party within such twenty (20) Business Day period, Surviving Pubco then the Seller Representative and the Purchaser Representative shall instruct negotiate in good faith to resolve any such objections for a period of ten (10) Business Day thereafter. If the Exchange Agent Representative Parties do not reach a final resolution within such ten (10) Business Day period, then upon the written request of either Representative Party, the Representative Parties will refer the dispute to issue arbitration in accordance with the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number provision of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company StockholdersSection 9.4.
(c) Until the Company Contingent Shares are issued If there is a final determination in accordance with this Section 4.04, (i1.18(b) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) that the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right are entitled to receive any Company Contingent Earnout Shares hereunderfor having achieved one or more Share Price Targets, the applicable Earnout Shares, will become due upon such final determination and the Purchaser will deliver such shares within ten (10) Business Days thereafter.
(d) From and after Following the Closing, the Purchaser and its Subsidiaries, including the Target Companies, will be entitled to operate their respective businesses based upon their respective business requirements. Each of the Purchaser and its Subsidiaries, including the Target Companies, will be permitted, following the Closing, to make changes at all times a Company Contingent Share remains subject its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an Company Earnout Conditionimpact on, Surviving Pubco will keep available for issuance a sufficient number the share price of unissued shares of Surviving Pubco the Purchaser Common Stock and the ability of the Company Stockholders to permit Surviving Pubco earn the Earnout Shares, and no Person will have any right to satisfy its issuance obligations set forth in this Section 4.04 and claim the loss of all or any portion of any Earnout Shares or other damages as a result of such decisions. For the avoidance of doubt, the Earnout Payments are cumulable but earnable solely on an all-or-nothing basis, such that there will take all actions required be no entitlement to increase the authorized a partial award of any Earnout Payment. The number of shares of Surviving Pubco Purchaser Common Stock if at constituting any time there will Earnout Payment shall be insufficient unissued equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing. Subject to the foregoing sentence, the aggregate maximum number of shares of Surviving Pubco Purchaser Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company issuable as Earnout Condition will Payments shall be adjusted appropriately to reflect any stock split19,000,000, reverse stock split, stock dividend (including any dividend or distribution with an additional 3,000,000 shares of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Purchaser Common Stock had occurredissuable to Sponsor.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Aesther Healthcare Acquisition Corp.)
Earnout. (a) The After the Closing, subject to the terms and conditions set forth herein, the Company Stockholders Shareholders as of immediately prior to the Closing who are Non-Electing Company Security Holders and the Engaged Option Company Shareholders as of immediately prior to the Closing who are Electing Company Security Holders shall have the contingent and non-transferrable right to receive their Pro Rata Share of up to an aggregate additional twenty five million (25,000,000) shares of Pubco Class A Common Stock in the case of Non-Electing Company Security Holders and Exchangeable Shares, in the case of Electing Company Security Holders, plus an aggregate amount of shares of PubCo Class A Common Stock in the case of Non-Electing Company Security Holders and Exchangeable Shares, in the case of Electing Company Security Holders, equal to the “Additional Company Incentive Shares” provided by the Company pursuant to Section 8.18(b) (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), as additional consideration based on the performance of the Pubco Class A Common Stock or achievement of certain clinical milestones during the five (5) year period after the Closing (the “Earnout Period”). Subject to the terms and conditions of this Agreement, the Company Shareholders’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) the Company Shareholders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any one-third (1/3) of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if in the closing price event that the VWAP of the Surviving Pubco Class A Common Stock equals or exceeds $12.00 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier I Share Price Target”), for twenty (20) trading days in a thirty Trading Days out of any consecutive twenty (30)-trading-day 20) Trading Day period at any time after during the Closing Date and no later than 60 months following the Closing Date;Earnout Period;
(ii) 2,250,000 the Company Contingent Shares if the closing price Shareholders shall be entitled to receive an additional one-third (1/3) of the Surviving Earnout Shares in the event that either (i) the VWAP of the Pubco Class A Common Stock equals or exceeds $15.00 14.00 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier II Share Price Target”), for twenty (20) trading days Trading Days out of any consecutive twenty (20) Trading Day period during the Earnout Period, or (ii) the Company successfully completes a Phase 1B clinical trial for multiple myeloma, meaning for this purpose, the completion of an interim data analysis which is sufficient to obtain an agreement with the FDA in which the FDA permits the Company to move forward to a thirty phase 2 clinical study following a Type B End-of-Phase-1 meeting (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; “First Clinical Milestone”); and
(iii) 1,250,000 the Company Contingent Shares if Shareholders shall be entitled to receive the closing price remaining one-third (1/3) of the Surviving Earnout Shares in the event that either (i) the VWAP of the Pubco Class A Common Stock equals or exceeds $18.00 16.00 per share on any (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier III Share Price Target” and, together with the Tier I Share Price Target and the Tier II Share Price Target, the “Share Price Targets”) for twenty (20) trading days Trading Days out of any consecutive twenty (20) Trading Day period during the Earnout Period, or (ii) the Company successfully completes an FDA required bridging study in healthy volunteers that proves bioequivalence between the ambulatory subcutaneous delivery pump and either a thirty transdermal patch or an on body subcutaneous delivery pump (30)-trading-day period at the “Second Clinical Milestone”, and, together with the First Clinical Milestone, the “Clinical Milestones”). The Share Price Targets shall be equitably adjusted for any time after consolidation, stock split or similar change to the Closing Date Pubco Class A Common Stock during the Earnout Period. In the event that the applicable Share Price Target or a Clinical Milestone is not met during the Earnout Period, the Company Shareholders shall not be entitled to receive the applicable portion of the Earnout Shares for such Share Price Target or Clinical Milestone. For the avoidance of doubt, Earnout Shares shall vest and be issued only in connection with the first achievement of a Share Price Target or Clinical Milestone during the Earnout Period, and the Company Shareholders shall not be entitled to Earnout Shares for any subsequent achievement of such Share Price Target. The achievement of any Share Price Target shall be deemed to include the achievement of any lower Share Price Target, and Pubco shall issue the Earnout Shares attributable to each Share Price Target together (upon which such lower included Share Price Targets shall be deemed achieved and no later than 60 months following the Closing Datefurther Earnout Shares shall become payable upon subsequent achievements of such lower included Share Price Targets).
(b) Each Company Pubco’s Chief Financial Officer (“CFO”) shall monitor the VWAP of Pubco Class A Common Stock on each Trading Day during the Earnout Condition Period, and as soon as practicable (and in any event within ten (10) Business Days) after the end of each monthly anniversary of the Closing during the Earnout Period, the CFO will be evaluated prepare and deliver to the Seller Representative and the Purchaser Representative (each, a “Representative Party”) a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of Pubco Class A Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly period and (ii) whether a stand-alone basisShare Price Target has been achieved during such monthly anniversary period. Similarly, without reference to as soon as practicable, and in any other Company Earnout Condition. If a Company Earnout Condition is satisfied, event within five (5) Business Days after a Clinical Milestone has been achieved, the last trading day CFO will send an Earnout Statement to each Representative Party indicating that a Clinical Milestone has occurred, along with the details of such Clinical Milestone. Each Representative Party will have ten (10) Business Days after its receipt of an Earnout Statement to review it, and each Representative Party and its Representatives on its behalf may make inquiries to the CFO and related Purchaser and Company personnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to an Earnout Statement, such thirty-day Representative Party shall deliver to Pubco (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within ten (10) Business Days following the date of delivery of each Earnout Statement, then such Representative Party will have waived its right to contest such Earnout Statement and the calculation of the VWAP of Pubco Class A Common Stock during the applicable portion of the Earnout Period (and whether a Share Price Target has been achieved) or whether a Clinical Milestone has occurred as set forth therein. If such written statement is delivered by a Representative Party within such ten (10) Business Day period, Surviving Pubco then the Representative Parties shall instruct negotiate in good faith to resolve any such objections for a period of ten (10) Business Day thereafter. If the Exchange Agent to issue Representative Parties do not reach a final resolution within such ten (10) Business Day period, then upon the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number written request of Company Contingent Shares corresponding either Representative Party the Representative Parties will refer the dispute to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part Independent Expert for final resolution of the Company Stockholders.
(c) Until the Company Contingent Shares are issued dispute in accordance with this Section 4.042.5(c). For purposes hereof, (i) the right “Independent Expert” shall mean, with respect any dispute as to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result achievement of the Company Stockholders’ and Engaged Option Holders’ right to receive Share Price Targets, a mutually acceptable independent (i.e., no prior material business relationship with any Company Contingent Shares hereunder.
party for the prior two (d2) From and after years) accounting firm appointed by the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco Common Stock to permit Surviving Pubco to satisfy its issuance obligations set forth in this Section 4.04 and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares Purchaser Representative and the underlying target price for each Company Earnout Condition will be adjusted appropriately to reflect any stock splitSeller Representative, reverse stock splitand, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior any dispute as to the time any such Company Contingent Shares are issued. It is the intent achievement of the Parties that such adjustments will be made Clinical Milestones, a mutually acceptable expert with experience in order to provide to the Company Stockholders and Engaged Option Holders the same economic effect as contemplated by this Agreement as if no change with respect to the Surviving Pubco Common Stock had occurredclinical trial consulting for cancer products.
(f) In the event that after the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the following:
(i) If the Earnout Trigger Event occurs prior to the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).
(ii) If the Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00, then none of the Company Contingent Shares shall be issued.
(iii) If the Earnout Trigger Event occurs at any time during the 60 months following the Closing Date and results in an Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be issued to the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04.
Appears in 1 contract
Samples: Business Combination Agreement (Healthwell Acquisition Corp. I)
Earnout. (a) The Company Stockholders From and after the Closing until the fifth (5th) anniversary of the Closing Date (the “Earnout Period”), upon the occurrence of any of the following, NewCo shall issue up to an additional two million five hundred thousand (2,500,000) shares of NewCo Common Stock (the “Earnout Shares”) to the Holders of Common Shares and the Engaged Option Holders shall be entitled of In-the-Money SARs that received a contingent right to receive their pro rata portion of such number of Company Contingent SharesEarnout Shares pursuant to Section 4.1(b)(ii) or Section 4.1(b)(iii), respectively (collectively, the “Earnout Holders”), as additional consideration for the Second Merger, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of Permitted Liens or Liens pursuant to any of the following conditions (each, Contract to which an “Company Earnout Condition”):Holder is or may become a party:
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco NewCo Common Stock equals or exceeds Price is greater than twelve dollars and fifty cents ($12.00 per 12.50) (such share on price as adjusted pursuant to this Section 4.8, the “Minimum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after 30) consecutive trading days, one million two hundred fifty thousand (1,250,000) shares of NewCo Common Stock (the Closing Date and no later than 60 months following the Closing Date;“Minimum Target Earnout Shares”); and
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco NewCo Common Stock equals or exceeds Price is greater than fourteen dollars ($15.00 per 14.00) (such share on price as adjusted pursuant to this Section 4.8, the “Maximum Target”) for any period of twenty (20) trading days in a out of thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
30) consecutive trading days, one million two hundred fifty thousand (iii1,250,000) 1,250,000 Company Contingent Shares if the closing price shares of the Surviving Pubco NewCo Common Stock equals or exceeds $18.00 per share on any twenty (20the “Maximum Target Earnout Shares”) trading days in a thirty (30)-trading-day period at any time after plus the Closing Date and no later than 60 months following the Closing DateMinimum Target Earnout Shares, if not previously issued.
(b) Each Company From and after the First Merger Effective Time, NewCo shall reserve at all times a sufficient number of authorized and unissued shares of NewCo Common Stock necessary to issue the Earnout Condition will be evaluated on a stand-alone basis, without reference Shares. In the event that the Earnout Holders are entitled to any other Company Earnout Condition. If a Company Shares, NewCo shall issue such Earnout Condition is satisfied, Shares promptly and in any event within five ten (510) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct date the Exchange Agent Earnout Holders become entitled thereto. The Earnout Shares to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding be issued to the Earnout Holders hereunder, if any, when delivered, shall be duly authorized and validly issued, fully paid, and non-assessable, and issued in compliance with all applicable Company Earnout Condition state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (the “Earnout Instruction”including preemptive rights), with no action being required the NewCo Governing Documents, commitments, or agreements to which NewCo is a party or by which it is bound. During the Earnout Period, NewCo shall use reasonable efforts (subject to the occurrence of a Liquidity Event) (i) to remain listed as a public company on, and to provide that the NewCo Common Stock (including, when issued the Earnout Shares) is tradable over, Nasdaq and (ii) to provide that the Earnout Shares, when issued, are approved for listing on the part of the Company StockholdersNasdaq.
(c) Until If NewCo shall at any time during the Company Contingent Earnout Period pay any cash or in-kind dividend (other than any dividend in the form of additional shares of NewCo Common Stock, which dividend shall be governed by the immediately following sentence) on shares of NewCo Common Stock, then in each such case the Minimum Target (to the extent the Minimum Target Earnout Shares are have not already been issued prior to the time of such dividend) and the Maximum Target (to the extent the Maximum Target Earnout Shares have not already been issued prior to the time of such dividend) shall be deemed to have been reduced for all purposes of this Agreement by the amount of such cash dividend or the fair market value of the in-kind dividend, as applicable, paid with respect to each share of NewCo Common Stock. If NewCo shall at any time during the Earnout Period pay any dividend on shares of NewCo Common Stock by the issuance of additional shares of NewCo Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of NewCo Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of NewCo Common Stock, then in accordance with this Section 4.04each such case, (i) the right number of Earnout Shares shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of NewCo Common Stock (including any other shares so reclassified as NewCo Common Stock) outstanding immediately after such event and the denominator of which is the number of shares of NewCo Common Stock that were outstanding immediately prior to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubcoevent, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Surviving Pubco as a result of the Company Stockholders’ and Engaged Option Holders’ right to receive any Company Contingent Shares hereunder.
(d) From and after the Closing, at all times a Company Contingent Share remains subject to an Company Earnout Condition, Surviving Pubco will keep available for issuance a sufficient number of unissued shares of Surviving Pubco NewCo Common Stock to permit Surviving Pubco to satisfy its issuance obligations Price values set forth in this Section 4.04 4.8(a)(i) and will take all actions required to increase the authorized number of shares of Surviving Pubco Common Stock if at any time there will (ii) above shall be insufficient unissued shares of Surviving Pubco Common Stock to permit such reservation.
(e) The Company Contingent Shares and the underlying target price for each Company Earnout Condition will be appropriately adjusted appropriately to reflect any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Surviving Pubco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Surviving Pubco Common Stock, occurring on or after the date hereof and prior to the time any such Company Contingent Shares are issued. It is the intent of the Parties that such adjustments will be made in order to provide to the Company Stockholders and Engaged Option Earnout Holders the same economic effect as contemplated by this Agreement as if no change with respect prior to such event.
(d) After the occurrence of the Minimum Target, NewCo shall issue to the Surviving Pubco Earnout Holders the Minimum Target Earnout Shares equal to the Earnout Per Fully-Diluted Common Stock had occurredShare and SAR.
(e) After the occurrence of the Maximum Target, NewCo shall issue to the Earnout Holders the Maximum Target Earnout Shares equal to the Earnout Per Fully-Diluted Common Share and SAR.
(f) In the event that after a Liquidity Event occurs during the Closing Date and no later than 60 months following the Closing Date there is an Earnout Trigger Event, then any Company Earnout Condition not previously satisfied shall be deemed satisfied immediately prior to the occurrence of such Earnout Trigger Event in accordance with the followingPeriod:
(i) If if the Liquidity Event Consideration in such Liquidity Event is greater than the Minimum Target (but less than the Maximum Target) and the Minimum Target Earnout Trigger Event occurs Shares have not already been issued, then the Minimum Target Earnout Shares shall be deemed issued and outstanding pursuant to and as contemplated by Section 4.8(a)(i) and Section 4.8(d), effective immediately prior to the one-year anniversary consummation of such Liquidity Event and the Closing Date and results in an Earnout Trigger Price that is greater than $10.00, but less than $12.00, then a portion of the Company Contingent Shares identified in Section 4.04(a)(i) holders thereof shall be issued entitled to receive the Company Stockholders and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04 (such portion shall be the amount of Company Contingent Shares identified in Section 4.04(a)(i) multiplied by a fraction calculated as: (A) the numerator of which shall be the Earnout Trigger Price minus $10 and (B) the denominator of which is 2).corresponding Liquidity Event Consideration; or
(ii) If if the Liquidity Event Consideration in such Liquidity Event is greater than the Maximum Target and the Maximum Target Earnout Trigger Event occurs after the one-year anniversary of the Closing Date and results in an Earnout Trigger Price that is less than $12.00Shares have not already been issued, then none of the Company Contingent Minimum Target Earnout Shares (to the extent not already issued) and the Maximum Target Earnout Shares shall be issued.
(iii) If , and the Maximum Target Earnout Trigger Event occurs at any time during Shares and the 60 months following the Closing Date and results in an Minimum Target Earnout Trigger Price that is equal to or greater than $12.00, but less than $15.00, then only the portion of the Company Contingent Shares identified in Section 4.04(a)(i) shall be deemed issued and outstanding pursuant to and as contemplated by Section 4.8(a) and Section 4.8(d) or Section 4.8(e), as applicable, effective immediately prior to the Company Stockholders consummation of such Liquidity Event and Engaged Option Holders in accordance with the provisions set forth in this Section 4.04holders thereof shall be entitled to receive the corresponding Liquidity Event Consideration.
Appears in 1 contract