Merger Consideration Adjustment (a) Following the Closing, the Merger Consideration shall be finally determined in accordance with the adjustments and procedures set forth in this Agreement.
(b) Within five (5) Business Days after the final determination of the Final Closing Cash, the Final Closing Indebtedness, the Final Transaction Expenses, the Final Working Capital, and the resulting Merger Consideration pursuant to Section 2.10, the following payments shall be made, as applicable:
(i) If the Merger Consideration is greater than the Estimated Merger Consideration (such excess, the “Adjustment Excess Amount”), then:
(A) Purchaser shall deposit, or cause to be deposited, with the Paying Agent the Adjustment Excess Amount, pursuant to the Paying Agent Agreement, for further payment to the Equityholders in accordance with their respective Pro Rata Share; and
(B) Purchaser and the Equityholder Representative shall jointly instruct the Escrow Agent to deposit with the Paying Agent the Escrow Amount, pursuant to the Paying Agent Agreement, for further payment to the Equityholders in accordance with their respective Pro Rata Share.
(ii) If the Merger Consideration is equal to the Estimated Merger Consideration, then Purchaser and the Equityholder Representative shall jointly instruct the Escrow Agent to deposit with the Paying Agent the Escrow Amount, pursuant to the Paying Agent Agreement, for further payment to the Equityholders in accordance with their respective Pro Rata Share.
(iii) If the Merger Consideration is less than the Estimated Merger Consideration (such difference, expressed as a positive number the “Adjustment Shortfall Amount”), then Purchaser and the Equityholder Representative shall:
(A) in the event the Adjustment Shortfall Amount is less than the Escrow Amount, jointly instruct the Escrow Agent to (1) release to Purchaser from the Escrow Account an amount equal to the Adjustment Shortfall Amount; and (2) deposit with the Paying Agent the remaining amounts of the Escrow Account (after payment of such Adjustment Shortfall Amount from the Escrow Account to Purchaser), pursuant to the Paying Agent Agreement, for further payment to the Equityholders in accordance with their respective Pro Rata Share; or
(B) in the event the Adjustment Shortfall Amount is equal to or greater than the Escrow Amount, (1) jointly instruct the Escrow Agent to release to Purchaser from the Escrow Account an amount equal to the Escrow Amount and (2) the Equityholders, severally and not jointly, shall pay, or cause to be paid, to Purchaser an amount equal to the remaining portion of such Adjustment Shortfall Amount, if any.
(c) Purchaser shall cause the Paying Agent to, as soon as practicable after the deposit with the Paying Agent of any amount pursuant to Section 2.8(b) (collectively, “Adjustment Consideration”), distribute to each Equityholder the portion of such Adjustment Consideration actually payable to such Equityholder pursuant to Section 2.2.
Cash Consideration In case of the issuance or sale of additional Shares for cash, the consideration received by the Company therefor shall be deemed to be the amount of cash received by the Company for such Shares (or, if such Shares are offered by the Company for subscription, the subscription price, or, if such Shares are sold to underwriters or dealers for public offering without a subscription offering, the public offering price), without deducting therefrom any compensation or discount paid or allowed to underwriters or dealers or others performing similar services or for any expenses incurred in connection therewith.
Non-Cash Consideration In the case of the offering of securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors; provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of Directors authorizes the offering of such securities.
Earn-Out Consideration Subject to the terms and conditions of this Agreement, the Purchaser will pay, or will cause the Company to pay, to Nyrstar the earn-out consideration in respect of the Earn-Out Period (the “Earn-Out Consideration”) as additional consideration for the sale of the Company pursuant to the Share Purchase Agreement, which obligations will be guaranteed by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5, the Earn-Out Consideration will be determined and paid as follows:
(a) the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company during the Earn-Out Period, calculated and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;
(b) with respect to the initial fiscal year of the Earn-Out Period during which the Trigger Date has occurred, the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company from the Trigger Date to the last date of this initial fiscal year;
(c) with respect to the final fiscal year of the Earn-Out Period, the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company from the first date of this final fiscal year to the Earn-Out Period End Date;
(d) no Earn-Out Consideration will be payable with respect of any Free Cash Flow of the Company after the expiry of the Earn-Out Period;
(e) the Company will calculate the Earn-Out Consideration within 90 days of the end of a relevant fiscal year of GPS during the Earn-Out Period; and
(f) the Earn-Out Consideration will be paid to Nyrstar within 105 days of the end of a relevant fiscal year of GPS during the Earn-Out Period, provided that:
(i) the Purchaser must, in the manner contemplated by clause 3(c) of the Share Purchase Agreement, withhold amounts payable to Nyrstar on account of Earn-Out Consideration, and any amounts so withheld will be treated as having been paid to Nyrstar on account of the Earn-Out Consideration; and
(ii) the Purchaser or the Company will be entitled to withhold payment of amounts on account of the Earn-Out Consideration in the manner contemplated by, and otherwise subject to the provisions of, the Share Purchase Agreement.
Post-Closing Purchase Price Adjustment 1.9.1 Within ninety (90) days following the Closing Date, Seller shall prepare, or cause to be prepared, and deliver to Purchaser a statement (the “Closing Net Working Capital Statement”) which shall set forth the Net Working Capital of the Newsprint Business and of Apache as of the Closing Time (which shall be set forth separately for each of the Newsprint Business and Apache, but as aggregated shall be referred to as the “Closing Net Working Capital”) and shall be prepared in accordance with Seller’s past accounting methods, policies, practices and procedures and in the same manner, with consistent classification and estimation methodology, as the Financial Statements were prepared, except that the Excluded Assets and the Newsprint Retained Obligations shall be excluded. The Closing Net Working Capital Statement may not be amended by Seller after it is delivered to Purchaser.
1.9.2 Purchaser shall, within thirty (30) days after the delivery of the Closing Net Working Capital Statement to it, complete its review of the Closing Net Working Capital reflected on the Closing Net Working Capital Statement. If Purchaser wishes to dispute the Closing Net Working Capital, Purchaser shall notify Seller in writing in reasonable detail of such disagreement and any reason therefore (“Purchaser’s Objection”), setting forth a specific description of the basis of Purchaser’s Objection and the adjustments to the Closing Net Working Capital that Purchaser believes should be made, on or before the last day of such thirty (30) day period, which Purchaser’s Objection may not be amended by Purchaser after it is delivered to Seller (except to withdraw any such Purchaser’s Objection). Any items on the Closing Net Working Capital Statements not disputed in Purchaser’s Objection shall be irrevocably deemed to be accepted by Purchaser. Seller shall then have thirty (30) days to review and respond to Purchaser’s Objection. If Seller and Purchaser are unable to resolve all of their disagreements with respect to the determination of the foregoing items within thirty (30) days following Seller’s receipt of Purchaser’s Objection (the “Negotiation Period”), they shall refer their remaining differences to a mutually agreeable independent accounting firm of national recognition (other than an independent accounting firm utilized by any of Seller, Apache or Purchaser or any Affiliate of any of the foregoing within the past three (3) years) acceptable to both Seller and Purchaser or if Seller and Purchaser are unable to agree as to such third party accounting firm within ten (10) days after the conclusion of the Negotiation Period, either Seller or Purchaser may request that the Chairman of the American Arbitration Association (or the nominated representative of the Chairman) appoint a third party accounting firm meeting the aforementioned requirements to resolve the dispute (the accounting firm selected being referred to as the “CPA Firm”), who shall determine, only with respect to the remaining differences so submitted, whether and to what extent, if any, the Closing Net Working Capital requires adjustment. The procedure and schedule under which any dispute shall be submitted to the CPA Firm shall be as follows:
(a) Within ten (10) days after the later of (i) the end of the Negotiation Period and (ii) the selection of the CPA Firm, Purchaser shall submit any unresolved elements of the Purchaser’s Objection to the CPA Firm in writing (with a copy to Seller), supported by any documents and/or affidavits upon which it relies. Failure to timely do so shall constitute a withdrawal by Purchaser of the Purchaser’s Objection with respect to any unresolved element to which such failure relates.
(b) Within fifteen (15) days following Purchaser’s submission of the unresolved elements of the Purchaser’s Objection as specified in sub-clause (a) above, Seller shall submit its response to the CPA Firm in writing (with a copy to Purchaser), supported by any documents and/or affidavits upon which it relies. Failure to timely do so shall constitute an acceptance by Seller with respect to any unresolved elements to which such failure relates.
(c) The CPA Firm shall deliver its written determination to Purchaser and Seller no later than the thirtieth (30th) day after the remaining differences underlying Purchaser’s Objection are referred to the CPA Firm, or such longer period of time as the CPA Firm determines is necessary.
Closing Consideration (a) At the Closing, Buyer shall pay to Seller or its designee, and Seller or its designee shall receive on behalf of the Affiliate Sellers and Asset Sellers, in consideration for the purchase of the Shares and the Purchased Assets pursuant to Section 2.1, an amount of cash (the “Closing Consideration”) equal to $1,978,151,867 (the “Base Purchase Price”) plus any Adjusted Statutory Book Value Surplus, minus any Adjusted Statutory Book Value Deficit, plus any Other Acquired Companies Shareholders Equity Surplus, minus any Other Acquired Companies Shareholders Equity Deficit, minus the Adjustment for PRIAC IMR Tax Gross-up, in each case, determined by reference to the Estimated Closing Statement in accordance with Section 2.6 (such aggregate amount, as adjusted in accordance with Section 2.7, the “Purchase Price”).
(b) At the Closing, in accordance with the PICA FSS Reinsurance Agreements:
(i) Seller shall transfer for deposit into the applicable PICA FSS Trust Account Investment Assets (PICA) that are Authorized Investments selected and valued in accordance with the Valuation Methodologies with an aggregate fair market value equal to the Net Initial Reinsurance Settlement Amount for the applicable PICA FSS Reinsurance Agreement as reflected on the Estimated Reinsurance Settlement Statement (“Transferred Investment Assets”) in accordance with Section 2.3(d); provided, if (A) the amount of the Initial Reinsurance Premium is greater than the Required Balance (as defined in the PICA FSS Reinsurance Agreements) as of the Effective Time for the applicable PICA FSS Reinsurance Agreement as reflected on the Estimated Reinsurance Settlement Statement (such excess amount with respect to the applicable PICA FSS Reinsurance Agreement, the “Overfunding Amount”) and (B) the applicable Overfunding Amount is greater than the applicable portion of the Ceding Commission, then Seller shall transfer directly to the applicable Reinsurer Transferred Investment Assets with an aggregate fair market value, determined in accordance with the Valuation Methodologies, equal to the amount by which the applicable Overfunding Amount exceeds such portion of the Ceding Commission, and only the remainder of the Transferred Investment Assets shall be deposited into the applicable PICA FSS Trust Account;
(ii) The applicable Reinsurer shall transfer to the applicable PICA FSS Trust Account Authorized Investments such that, after giving effect to the transfers contemplated by Section 2.3(b)(i), the aggregate Book Value (as defined in the PICA FSS Reinsurance Agreements) in each such PICA FSS Trust Account is equal to the Required Balance (as defined in the PICA FSS Reinsurance Agreements) as of the Effective Time for the applicable PICA FSS Reinsurance Agreement as reflected on the Estimated Reinsurance Settlement Statement; and
(iii) Seller shall credit to the applicable Modco Account the applicable Separate Account Assets (as such terms are defined in the PICA FSS Reinsurance Agreements).
(c) Buyer shall cause to be prepared and delivered to Seller at least five (5) Business Days prior to the anticipated Closing Date a statement setting forth an allocation of the full amount of the Ceding Commission between each of the PICA FSS Reinsurance Agreements.
(d) Seller shall undertake its ordinary course process consistent with past practice for determining any credit-related impairments or credit-related losses in value as of the Closing Date for the Transferred Investment Assets and reflect any credit- related impairments or credit-related losses in value from such process in the Transferred Investment Assets. Following the Closing, Seller shall provide reasonable documentation reasonably requested by Buyer for purposes of Xxxxx’s assessment of any credit-related impairments or credit-related losses as of the Closing Date. Seller shall sell, convey, assign, transfer and deliver to the applicable Reinsurer free and clear of all Encumbrances (other than Permitted Encumbrances or Encumbrances imposed under the applicable PICA FSS Trust Agreements) good and marketable title to the Transferred Investment Assets in respect of the PICA FSS Reinsurance Agreements (for the avoidance of doubt, together with all of Seller’s rights, title and interest thereto, including with respect to the investment income due and accrued thereon) and deposit on their behalf to the applicable PICA FSS Trust Account pursuant to Section 2.3(b)(i). Any investment assets to be transferred to a PICA FSS Trust Account shall be transferred in the manner set forth in the applicable PICA FSS Trust Agreement. All third-party costs or expenses incurred (whether prior to, on or following the Closing Date), including reasonable attorneys’ fees, in connection with the transfers of assets to the PICA FSS Trust Accounts or the Reinsurers (including any re-registrations or re-titling thereof) as contemplated by Section 2.3(b)(i) and this Section 2.3(d) shall be borne fifty percent (50%) by Seller and fifty percent (50%) by Buyer.
Adjustment of Merger Consideration If, subsequent to the date of this Agreement but prior to the Effective Time, the outstanding shares of Common Stock shall have been changed into a different number of shares or a different class as a result of a stock split, reverse stock split, stock dividend, subdivision, reclassification, split, combination, exchange, recapitalization or other similar transaction, the Merger Consideration shall be appropriately adjusted.
Purchase Price Adjustments (a) The Parties agree that, so long as any distributions made are reflected in Closing Working Capital and in any adjustments to the Purchase Price under Section 1.4(c), the Seller shall have the right, at or prior to the Closing, to cause the Company to distribute cash to the Seller or its Affiliates, by one or more dividends and/or other distributions.
(b) Within 90 calendar days following the Closing, the Buyer shall prepare, or cause to be prepared, and deliver to the Seller a statement (the “Closing Statement”), in accordance with the Accounting Principles, which shall include (i) a balance sheet of the Company as of the Closing Date, (ii) a calculation of the total Working Capital of the Company as of the Closing Date (the “Closing Working Capital”), (iii) a calculation of the Working Capital Deficit or the Working Capital Excess, as the case may be (which, for the avoidance of doubt, shall include the Buyer’s calculation of the Target Working Capital), (iv) a calculation of Closing Cash, (v) a calculation of Closing Indebtedness, (vi) a calculation of Transaction Expenses and (vii) the Buyer’s determination of the final Purchase Price (the “Final Purchase Price”) resulting therefrom. For purposes of the Buyer’s preparation of the Closing Statement, the Seller shall make available or provide reasonable access to the Buyer and its Representatives, upon advance notice and during normal business hours, all information, books, records, data and working papers created or used in connection with the preparation of the Estimated Working Capital Certificate, to the extent not in the possession of the Company or the Buyer. The Seller shall have a period of 30 calendar days after delivery of the Closing Statement to review (and cause the Seller’s auditors to review) such documents and make any objections it may have in writing to the Buyer. For purposes of the Seller’s evaluation of the Closing Statement, the Buyer shall, and shall cause the Company to, make available or provide reasonable access to the Seller and its Representatives, upon advance notice and during normal business hours, all information, books, records, data and working papers created or used in connection with the preparation of the Closing Statement; and shall permit reasonable access, upon advance notice and during normal business hours, to the facilities and personnel of the Company as may be reasonably requested by the Seller and its Representatives to analyze the Closing Statement. If the Seller delivers written objections to the Buyer within such 30-day period, then the Buyer and the Seller shall attempt to resolve the matter or matters in dispute. If no written objections are made by the Seller within such 30-day period, then the Closing Statement shall be final and binding on the Parties. If disputes with respect to the Closing Statement cannot be resolved by the Buyer and the Seller within 30 calendar days after timely delivery of any objections thereto, then, at the request of the Buyer or the Seller, the specific matters in dispute (but no others) shall be submitted to such independent accounting firm as may be approved by the Seller and the Buyer (the “Auditors”), which firm shall render its opinion as to such specific matters. If no such referral is made within 45 calendar days after the delivery of the objections, then the Closing Statement shall be final and binding on the Parties. If all objections are so resolved between the Parties prior to such time, the Closing Statement with such changes as have been agreed in writing by the Buyer and the Seller shall be final and binding on the Parties. The matters to be resolved by the Auditors shall be limited to the remaining unresolved disputes between the Buyer and the Seller. The Parties shall cooperate with the Auditors during its engagement, and the Auditors shall have access to the books and records of the Company and the Buyer, the personnel of, and work papers prepared by, the Parties’ accountants to the extent that they relate to the unresolved disputes as it may reasonably request for the purpose of reviewing such unresolved disputes, provided, that such access shall be in a manner that does not interfere with the normal business operations of the Buyer, the Company or the Seller. The Auditors shall promptly deliver to the Buyer and the Seller a written report setting forth their resolution of the disputes along with their determination of the Final Purchase Price, which determination shall be made in accordance with the definitions and principles set forth in this Agreement and shall be final and binding on the Parties. As to each disputed item, the Auditors shall be limited to awarding only one or the other of the Buyer’s proposal, on the one hand, or the Seller’s proposal, on the other hand, and shall have no authority to select or propose to the Parties any resolution other than as set forth in one of such two proposals originally submitted to the Auditors. Judgment may be entered upon the determination of the Auditors in any court having jurisdiction over the Party against which such determination is to be enforced. The fees and expenses of the Auditors shall be borne by the Parties as designated by the Auditors, which designation shall be based upon the inverse proportion of the amount of disputed items resolved in favor of such Party (i.e., so that the prevailing Party bears a lesser amount of such fees and expenses). If the Parties refer a dispute to the Auditors and if the Adjustment Escrow Funds exceed the amount by which the Estimated Purchase Price is greater than the Final Purchase Price (as claimed by the Buyer), then the Buyer and the Seller shall, pursuant to the terms of the Escrow Agreement, promptly instruct the Escrow Agent to pay the Seller the amount of such excess out of the Adjustment Escrow Funds, and the remaining balance of the Adjustment Escrow Funds shall be paid out pursuant to Section 1.4(c) after the final determination of the Final Purchase Price pursuant to this Section 1.4.
(c) If the Estimated Purchase Price is greater than the Final Purchase Price, then within two business days following the final determination thereof, the Buyer and the Seller shall, pursuant to the terms of the Escrow Agreement, instruct the Escrow Agent to pay the Buyer the amount of such excess out of the Adjustment Escrow Funds (and if the balance of the Adjustment Escrow Funds is less than the amount due to the Buyer pursuant to this Section 1.4, then at the Buyer’s option the Buyer may recover the remaining amount from the Indemnity Escrow Funds or require the Seller to pay such amount to the Buyer by wire transfer in immediately available funds to the account or accounts designated by the Buyer). If the Final Purchase Price is greater than the Estimated Purchase Price, then within two business days following the final determination thereof, the Buyer will pay to the Seller by wire transfer in immediately available funds to the account or accounts designated by the Seller the amount of such excess and the Buyer and the Seller shall, pursuant to the terms of the Escrow Agreement, instruct the Escrow Agent to pay the Seller the entire balance of the Adjustment Escrow Funds. Any payments pursuant to this Section 1.4(c) shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.
Anti-Dilution Adjustments The number of shares issuable upon conversion of this Debenture and the Conversion Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend or make a distribution on its common stock in additional shares or other securities, (ii) subdivide its outstanding common stock into a greater number of shares, (iii) combine its outstanding shares into a smaller number of shares or (iv) issue, by reclassification of its shares, any other securities of the Company (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), the number of share issuable upon conversion of this Debenture immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Conversion Shares, and other securities of the Company which such Holder would have owned or would have been entitled to receive immediately after the happening of any of the events described above, had the Debenture been converted immediately prior to the happening of such event or any record date with respect thereto. Any adjustment made pursuant to this subsection 6(a) shall become effective immediately after the effective date of such event.
(b) In case the Company shall issue rights, options, warrants or convertible securities to holders of its shares, for no consideration, containing the right to subscribe for or purchase shares of common stock, the number of Conversion Shares thereafter issuable upon the conversion of this Debenture shall be determined by multiplying the number of Conversion Shares theretofore issuable upon conversion of this Debenture by a fraction, of which the numerator shall be the number of shares outstanding immediately prior to the issuance of such rights, options, warrants or convertible securities plus the number of additional shares offered for subscription or purchase, and of which the denominator shall be the number of shares outstanding immediately prior to the issuance of such rights, options, warrants or convertible securities. Such adjustment shall be made whenever such rights, options, warrants or convertible securities are issued, and shall become effective immediately upon issuance of such rights, options, warrants or convertible securities. In the event of such adjustment, corresponding adjustments shall be made to the Conversion Price.
(c) In case the Company shall distribute to holders of its common shares evidences of its indebtedness or assets (excluding cash dividends or distributions out of current earnings made in the ordinary course of business consistent with past practices), then in each case the number of Conversion Shares thereafter issuable upon the conversion of this Debenture shall be determined by multiplying the number of Conversion Shares theretofore issuable upon conversion of this Debenture by a fraction, of which the numerator shall be the then Market Price (as defined below) on the date of such distribution, and of which the denominator shall be such Market Price on such date minus the then fair value (determined as provided in subsection 6(f) below) of the portion of the assets or evidences of indebtedness so distributed applicable to one share. Such adjustment shall be made whenever any such distribution is made and shall become effective on the date of distribution. In the event of any such adjustment, the number of Conversion Shares shall also be adjusted and shall be that number determined by multiplying the number of shares issuable upon exercise before the adjustment by a fraction, the numerator of which shall be the Conversion Price in effect immediately before the adjustment and the denominator of which shall be the Conversion Price as so adjusted.
(d) If the Company shall at any time while this Debenture is outstanding issue shares (including additional shares deemed to be issued upon conversion of any convertible security, but excluding shares issued as a dividend or distribution or upon a stock split or combination which is otherwise provided for in Section 6(a) above, or upon the issuance of options or warrants for no consideration which is otherwise provided for in Section 6(b) above) either without consideration, or for a consideration per share less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, the Conversion Price shall be reduced by a full ratchet anti-dilution adjustment to such lesser price (calculated to the nearest cent). For purposes of this Section 6(d), the consideration received by the Company for the issue of any additional shares shall be computed as follows:
Adjustment to Merger Consideration The Merger Consideration shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Common Stock occurring on or after the date hereof and prior to the Effective Time.
