Deferred Consideration. (a) Notwithstanding anything in this Agreement, none of Parent, Merger Sub or any of their respective Affiliates (A) shall be under any obligation or have any duty to act in such a manner that any of the Deferred Consideration is paid, or if payable, is maximized, (B) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or shall be bound by an agreement or covenant of any kind, in respect of this Section 3.4 other than an obligation to comply with the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration. (b) Within thirty (30) days after each Deferred Consideration milestone has been achieved in accordance with Schedule 3 hereto, Parent shall deliver a notice to the Representative of such milestone, and within ninety (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(c). (c) At its sole discretion, Parent may choose to pay the Deferred Consideration in Cash or in Parent Consideration Stock or a combination of both, so long as the Parent Consideration Stock is issued in accordance with this Agreement. (d) In no event shall the total number of Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part of the Closing Consideration or the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any options, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635. (e) The Share Recipients agree and acknowledge as to the Milestone Payment Amounts (as defined in Schedule 3 hereto) that (i) there are no representations or warranties of Parent other than those expressly set forth in this Agreement; and (ii) they have not relied and will not rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreement. (f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Company; (ii) shall not be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and void. (g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amounts.
Appears in 1 contract
Sources: Merger Agreement (Athenex, Inc.)
Deferred Consideration. (a) Notwithstanding anything To the extent that from time to time the Qualifying Parent Equityholders have received in this Agreementaggregate Realized Cash Proceeds equal to the Threshold Amount:
(i) Parent shall not, none of Parentand shall cause the Company and its Subsidiaries not to, Merger Sub make any dividend, distribution or any of their respective Affiliates other payment to (A) shall be under any obligation or have any duty to act in such a manner that any of the Deferred Consideration is paidon behalf of, or if payable, is maximized, (Bfor the benefit of) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will Qualifying Parent Equityholder that would constitute Realized Cash Proceeds unless and until the Sellers have any obligation, or shall be bound by an agreement or covenant of any kind, in respect of this Section 3.4 other than an obligation to comply with received the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration.
(b) Within thirty (30) days after each Deferred Consideration milestone has been achieved Maximum Earn-Out Payment in accordance with Schedule 3 hereto, Parent shall deliver a notice to this Section 2.14; and
(ii) until the Representative of such milestone, and within ninety (90) days after Sellers have received the achievement of each Deferred Consideration milestoneMaximum Earn-Out Payment in accordance with this Section 2.14, Parent shall pay, or cause to be paid, an amount in cash equal to 100% of any amounts that would be incremental Realized Cash Proceeds in excess of the Surviving Corporation Threshold Amount (any such payments not to payexceed individually or in the aggregate the Maximum Earn-Out Payment, an “Earn-Out Payment”) to the Sellers in accordance with their respective Pro Rata Share of each Share Recipientsuch Earn-Out Payment and the terms and conditions of Section 2.3 and Section 2.8.
(b) No Earn-Out Payment shall be made unless and until there has been Realized Cash Proceeds equal to the Threshold Amount. Notwithstanding anything to the contrary, to be paid in no event will the method elected aggregate amount of Earn-Out Payments made by Parent in accordance with Section 3.4(c)or its designee under this Agreement exceed an aggregate amount equal to the Maximum Earn-Out Payment.
(c) At its sole discretionUntil such time as the obligations of the Parties under this Section 2.14 shall cease pursuant to Section 2.14(h), not later than (i) twenty (20) Business Days prior to any receipt by a Qualifying Parent Equityholder of Realized Cash Proceeds (where such receipt would result in aggregate Realized Cash Proceeds exceeding the Threshold Amount), if the transaction resulting in such receipt is publicly disclosed, at such time, or (ii) if not so disclosed, at the Closing of the transaction resulting in such receipt, in the case of each of the foregoing clauses (i) and (ii), Parent may choose shall deliver, or cause to pay be delivered, to the Deferred Consideration Seller Representative a written notice (an “Earn-Out Notice”) setting forth the following with respect to such Qualifying Parent Equityholder receiving Realized Cash Proceeds and all Qualifying Parent Equityholders as at such time (A) a calculation of the aggregate amount of Realized Cash Proceeds of such Qualifying Parent Equityholder and all Qualifying Parent Equityholders; (B) the amount of such Qualifying Parent Equityholder’s and all Qualifying Parent Equityholders receipt(s) of Realized Cash Proceeds; (C) the amount of the Qualifying Parent Equityholders’ Cumulative Investment; and (D) the Earn-Out Payment, if any, payable in Cash or respect thereof, in Parent Consideration Stock or each case, calculated in a combination manner consistent with the terms of both, so long as this Agreement and accompanied by reasonable supporting detail with respect to the Parent Consideration Stock is issued in accordance with this Agreementcalculation of such amounts.
(d) In no event shall Parent will ensure that any transaction that would involve the total number realization of Realized Cash Proceeds by Qualifying Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part Equityholders in excess of the Closing Consideration or Threshold Amount is structured and effected so as to provide that on closing of such transaction (if not before), the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise full amount of any optionsproceeds payable to (or on behalf of, warrants or other convertible securitiesfor the benefit of) any Qualifying Parent Equityholders is paid to the Sellers in a manner contemplated by Section 2.14(a), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.
(e) The Share Recipients agree Seller Representative and acknowledge as its advisors and representatives shall have reasonable access during regular business hours to such documents, books, records, work papers, facilities, personnel and other information (including in electronic format, if available) and employees of the Surviving Company and its Subsidiaries, in each case, to the Milestone Payment Amounts extent used or involved in the preparation of an Earn-Out Notice, and as the Seller Representative, its advisors and representatives may reasonably require to complete its review of such Earn-Out Notice and the components thereof (in such a manner so as defined not to unreasonably interfere with the conduct of the business of the Surviving Company or its Subsidiaries), subject, if required by the accountants of the Surviving Company or its Subsidiaries, to the prompt execution of a customary (in Schedule 3 heretoform and content) that (i) there are no representations or warranties of Parent other than those expressly set forth in this Agreement; and (ii) they have not relied and will not rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreementaccess letter.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration Within 30 days following delivery by the Surviving Company of an Earn-Out Notice (the “Earn-Out Objection Period”), the Seller Representative shall either inform the Surviving Company in addition writing that such Earn-Out Notice is acceptable, or deliver written notice (the “Earn-Out Dispute Notice”) to the Closing ConsiderationSurviving Company notifying the Surviving Company that the Seller Representative disagrees with the calculations set forth in such Earn-Out Notice and setting forth the Seller Representative’s calculation of the disputed amounts and, a description in reasonable detail of the grounds for each such disagreement (each such item or amount as to which the Seller Representative disagrees and set forth in the Earn-Out Dispute Notice, an “Earn-Out Item of Disagreement”). Except for those Earn-Out Items of Disagreement set forth in an Earn-Out Dispute Notice delivered during the Earn-Out Objection Period, the Seller Representative shall be deemed to have agreed with all other items and amounts set forth in such Earn-Out Notice, which items and amounts shall be final, conclusive and binding upon all of the parties hereto. In the event an Earn-Out Dispute Notice is delivered to the Surviving Company, the Surviving Company and the Seller Representative shall attempt in good faith to resolve such dispute, and any mutual agreement resulting from such good faith attempt shall be final, conclusive and binding on the parties.
(g) If the Surviving Company and the Seller Representative, notwithstanding such good faith attempt, fail to resolve such dispute within 15 calendar days after the Seller Representative delivers the Earn-Out Dispute Notice, then the Surviving Company and the Seller Representative jointly shall engage the Independent Expert to resolve any Earn-Out Items of Disagreement that remain unresolved in accordance with the standards set forth in this Section. The right Surviving Company and the Seller Representative shall use all reasonable endeavors to receive cause the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock Independent Expert to render a written decision resolving the matters submitted to the Independent Expert within 30 calendar days of the Company; (ii) making of such submission and each of the Surviving Company and the Seller Representative shall, and shall cause its representatives to, cooperate with the Independent Expert so as to enable it to make its determination as quickly and as accurately as practicable. The Surviving Company and the Seller Representative agree that the engagement of the Independent Expert shall provide that neither party shall have any ex parte communications with the Independent Expert. The Surviving Company and the Seller Representative shall direct the Independent Expert to decide all remaining Earn-Out Items of Disagreement solely based on the terms and standards set forth in this Agreement and the written submissions of the Surviving Company and the Seller Representative and their respective representatives, and shall not be evidenced based on independent review, and each of the Surviving Company and the Seller Representative shall have the opportunity to respond in writing to the other’s written submission. The Independent Expert shall only address Earn-Out Items of Disagreement and shall not adjust any amounts or items that are not in dispute by a certificate or other instrumentthe parties hereto; (iii) provided that the amount of any Earn-Out Items of Disagreement and the Earn-Out Payment as so determined by the Independent Expert shall not be assignable greater than the greatest value for such item claimed by either party or otherwise transferrablesmaller than the smallest value for such item claimed by either party. Prior to the Independent Expert’s final determination under this Section 2.14(g), except by (A) will or intestate succession Parent, on the one hand, and the Seller Representative, on the other hand, shall each pay 50% of any retainer paid to an immediate family memberthe Independent Expert, and (B) to a trust whose beneficiaries consist exclusively of one or more during the engagement of the undersigned and/or an immediate family memberIndependent Expert, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death Independent Expert will ▇▇▇▇ 50% of the trusteetotal charges to each of Parent, (E) pursuant to a court orderon the one hand, (F) if such Share Recipient is a partnershipand Seller Representative, trust or a limited liability companyon the other hand. In connection with the Independent Expert’s final determination under this Section 2.14(g), the Independent Expert shall also determine, pursuant to (1the terms of this Section 2.14(g) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to and taking into account all fees and expenses already paid by each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Seller Representative, as of the case may be, may reasonably request. None date of Parentsuch determination, the Surviving Corporation allocation of its fees and expenses between Parent and the Seller Representative, which such determination shall be conclusive and binding upon the parties hereto. All determinations made by the Independent Expert will be final, conclusive and binding on the parties hereto.
(h) The obligations of the Parties under this Section 2.14 shall cease and be of no further force and effect from and after the earliest to occur of (i) the date on which no Qualifying Parent Equityholder, directly or indirectly, owns beneficially or of record any Parent Securities (but subject to satisfaction of any obligations arising at or prior to such time, including any obligation to pay any Earn-Out Payment) and (ii) the date as of which an aggregate amount equal to the Maximum Earn-Out Payment has been paid hereunder.
(i) The Parties (including the Seller Representative shall give effect on behalf of itself in its capacity as a Seller and on behalf of the other Sellers) acknowledge and agree that in connection with the Earn-Out Payment and subject to any purported assignment or transfer made in contravention the final sentence of this clause Section 2.14(i), (f)i) the Surviving Company and its post-Closing Affiliates (including Parent) shall have the right to operate its and their respective businesses, in the sole discretion of the Surviving Company and its Affiliates and make all decisions with respect to the Surviving Company and its and its Affiliates’ businesses (including decisions with respect to the commercial viability of a product, development budgets and costs and potential market for products) in the sole discretion of the Surviving Company and its Affiliates; (ii) the Surviving Company and its post-Closing Affiliates (including Parent) shall have no obligation to operate the Surviving Company and its businesses in order to achieve or maximize any amount of Realized Cash Proceeds, the Threshold Amount, or any Earn-Out Payment; (iii) any Earn-Out Payments and the receipt by the Qualifying Parent Equityholders of any Realized Cash Proceeds are speculative and are subject to numerous factors outside the control of the Surviving Company, Parent and their respective Affiliates; (iv) shall not accrue or pay interest on there is no assurance that the Sellers will receive any portion thereofEarn-Out Payments; and (v) does none of the Surviving Company, Parent, nor any of the Parent Related Parties owe a fiduciary duty or express or implied duty to the Sellers or the Seller Representative (and any such fiduciary duty is irrevocably waived); (vi) the contingent right of the Sellers to receive any Earn-Out Payment is not represent an investment in the Surviving Company, Parent or any of its Affiliates and such rights in this Section 2.14 shall not entitle any Seller or the Seller Representative to any rights as an equityholder of the Surviving Company, Parent or any of its Affiliates; (vii) the parties intend the express provisions of this Agreement to govern all of their rights and obligations, if any, with respect to the Earn-Out Payments contemplated by this Section 2.14; (viii) nothing herein will prohibit the Surviving Company, Parent, or their respective Affiliates from engaging in any business or opportunity either with or without the Surviving Company or its Affiliates or acquiring, entering into joint ventures, investing in, or otherwise cooperating with other Persons, including Persons that may have interests adverse to or otherwise compete, directly or indirectly, with the Surviving Company and its Subsidiaries; (ix) neither the Surviving Company nor any of its Affiliates is under any obligation to continue any aspect of the Surviving Company’s and its Subsidiaries’ businesses or to operate the Surviving Company, its Subsidiaries or their respective businesses consistent with past practice; (x) none of the Sellers or the Seller Representative (on behalf of itself or any Seller) shall have any right to claim or assert any lost Earn-Out Payment or other damages pursuant to this Agreement or otherwise, including this Section 2.14 as a result of any conduct, decisions or other actions or inactions of the Surviving Company, Parent or their respective Affiliates (other than a claim for breach of the right payment obligations under this Section 2.14 to the extent any Earn-Out Payment is payable hereunder and not paid when due and payable); (xi) nothing shall prohibit, prevent or otherwise restrict the Surviving Company or any of its Affiliates from incurring any Lien with respect to the Surviving Company or its Affiliates, any equity interest therein or any asset thereof or otherwise restrict the secured party in whose favor such Lien is granted from enforcing its rights in respect of such Lien. Notwithstanding anything to the contrary herein or otherwise, the sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) against the Surviving Company, Parent, or any Qualifying Parent Equityholder or any of the Parent Related Parties for payment of any of the Earn-Out Payments is to seek the payment from the Parent or the Company in accordance with this Section 2.14. Parent agrees that it shall not take any action the principal purpose or intent of which is to circumvent or reduce the payments contemplated by this Section 2.14.
(j) The rights of the Sellers under this Section 2.14 are personal to each Seller and, notwithstanding anything to the contrary in this Agreement or otherwise, no rights or interests of any Seller under this Section 2.14, including any rights to receive the consideration set forth any Earn-Out Payment due pursuant hereto, may be sold, assigned, transferred, in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, whole or in part by any Seller (other than as specifically permitted by operation of Law or the immediately preceding sentenceLaws of descent) to any Person and any attempted sale, assignment or transfer shall be null and voidvoid ab initio.
(gk) Subject All payments pursuant to this Section 2.14 shall be treated by the Parties for applicable Tax purposes as adjustments to the limitations set forth in Article 7 (Indemnification)Total Merger Consideration, Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amountsunless otherwise required by Law.
Appears in 1 contract
Sources: Merger Agreement (Bumble Inc.)
Deferred Consideration. 4.1 Subject to receipt by the Buyer or the Company of documentation evidencing the Closing of one or more Considered Contracts and the limitation set forth in clause 4.2, the Buyer covenants and agrees to pay to the Seller by way of Deferred Consideration £75,000 in respect of each Considered Contract which is Closed within 90 days following Completion (such period to be referred to herein as the “Deferred Consideration Period”).
4.2 The total amount of Deferred Consideration payable pursuant to clause 4.1 shall not exceed £300,000.
4.3 Any and all amounts payable pursuant to clause 4.1 shall be paid by the Buyer via wire transfer of cleared funds to the account, details of which are set out in clause 3.3(a), within five (5) Business Days of a Considered Contract being Closed.
4.4 The Buyer hereby confirms, and will procure that the Company shall:
(a) Notwithstanding use reasonable commercial endeavours to effect the Closing of each Considered Contract within 90 days of Completion and that it shall not, and shall procure that the Company shall not do anything deliberately which could have the effect of delaying or preventing the Closing of any such Considered Contract; and
(b) comply with the provisions of the PL Side Letter and not vary the terms of the PL Side Letter or put in this Agreement, none of Parent, Merger Sub or place any other incentive arrangement in relation to any of their respective Affiliates the Considered Contracts other than with the prior written consent of the Seller (A) shall such consent not to be under any obligation unreasonably withheld or have any duty to act in such a manner that any delayed).
4.5 At the end of the Deferred Consideration is paidPeriod, or if payable, is maximized, (B) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or the “Aggregate Unearned Deferred Consideration Amount” shall be bound determined by an agreement or covenant subtracting the total amount of any kind, in respect of this Section 3.4 other than an obligation to comply with the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration.
(b) Within thirty (30) days after each all Deferred Consideration milestone has been achieved in accordance with Schedule 3 hereto, Parent shall deliver a notice earned pursuant to the Representative of such milestone, and within ninety (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(c).
(c) At its sole discretion, Parent may choose to pay clause 4.1 during the Deferred Consideration in Cash or in Parent Period from £300,000. For the avoidance of doubt, the Aggregate Unearned Deferred Consideration Stock or a combination of both, so long as the Parent Consideration Stock is issued in accordance with this Agreement.
(d) In no event shall the total number of Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part of the Closing Consideration or the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any options, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.
(e) The Share Recipients agree and acknowledge as to the Milestone Payment Amounts (as defined in Schedule 3 hereto) that (i) there are no representations or warranties of Parent other than those expressly set forth in this Agreement; and (ii) they have not relied and will not rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreement.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Company; (ii) shall Amount cannot be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other less than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and void0.
(g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amounts.
Appears in 1 contract
Deferred Consideration. (a) Notwithstanding anything in this Agreement, none of Parent, Merger Sub or any of their respective Affiliates (A) shall be under any obligation or have any duty to act in such a manner that any of Not later than 45 calendar days after the Deferred Consideration is paidPeriod, or if payable, is maximized, (B) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or Akerna shall deliver to the Shareholder Representative the Deferred Consideration Statement. The Deferred Consideration Statement shall be bound by an agreement or covenant of any kind, prepared in respect of this Section 3.4 other than an obligation accordance with U.S. GAAP applied consistently with Ample’s past practices (to comply the extent such past practices are consistent with the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred ConsiderationU.S. GAAP).
(b) Within thirty (30) days after each The Deferred Consideration milestone has been achieved Statement shall be accompanied by all relevant backup materials, in accordance with Schedule 3 hereto, Parent shall deliver a notice detail reasonably acceptable to the Shareholder Representative of and such milestoneother material reasonably requested by the Shareholder Representative, and within ninety (90) days after a statement setting forth the achievement amount, if any, of each Deferred Consideration milestone, Parent shall pay, or cause payable to holders of the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(c)CVRs.
(c) At its sole discretion, Parent may choose The Shareholder Representative shall have 20 Business Days to pay accept or dispute the Deferred Consideration in Cash Statement by providing written notice of such acceptance or in Parent dispute to Akerna. In the event that Akerna does not receive any written notice of acceptance or dispute of the Deferred Consideration Stock Statement from the Shareholder Representative by the expiry of such 20 Business Day period, the Shareholder Representative will be deemed to have accepted the Deferred Consideration Statement for and on behalf of all holders of CVRs. Notwithstanding the foregoing, the period for the Shareholder Representative to accept or a combination dispute the Deferred Consideration Statement shall be extended by such number of both, so long days as is equal to the Parent Consideration Stock period from: (i) the date the Shareholder Representative requests other material as contemplated under Section 2.19(b); and (ii) the date all such material is issued in accordance with this Agreementdelivered to the Shareholder Representative.
(d) In no the event the Shareholder Representative disputes the Deferred Consideration Statement, the Shareholder Representative shall provide Akerna the total number nature and basis of Parent Consideration Stock issued hereunder (includingsuch dispute, without limitation any Parent Consideration Stock issued as part and Akerna and the Shareholder Representative shall use their commercially reasonable efforts to reach agreement on the disputed amounts in order to determine the amount of the Closing Deferred Consideration payable, if any. If Akerna and the Shareholder Representative are unable to resolve the dispute within 15 Business Days, then any remaining items in dispute shall be submitted to an independent firm of professional accountants selected by Akerna and the Shareholder Representative, and if the Parties fail to or refuse to mutually select a firm within a further five Business Days after written request therefor by Akerna or the Shareholder Representative, as applicable, such independent firm shall be KPMG LLP. All determinations and calculations pursuant to this subsection 2.19(d) shall consider only those Deferred Consideration) exceed 19.9% Consideration Statement calculations on which the Parties have disagreed, shall be in writing, and shall be delivered to Akerna and the Shareholder Representative as promptly as practicable. The determination of the total outstanding capital stock independent firm of Parent as professional accountants shall be binding and conclusive upon all Parties and will not be subject to appeal, absent manifest error. The fees and expenses of the Effective Time (not including any Parent capital stock independent firm of professional accountants shall be for the account of Akerna up to a maximum amount equal to $60,000; provided that is owned all such fees and expenses in excess of such amount shall be shared equally by Parent the Shareholder Representative on the one hand, and without assuming Akerna and Purchaser on the conversion or exercise of any options, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635hand.
(e) The Share Recipients agree If Deferred Consideration is payable in accordance with the Deferred Consideration Statement, then Akerna or Purchaser shall promptly (and acknowledge as in any case within five Business Days of the acceptance or final determination of the Deferred Consideration Statement) (the “Deferred Consideration Payment Date”) deliver to the Milestone Payment Amounts (Paying Agent such number of Exchangeable Shares as defined in Schedule 3 hereto) that is equal to the quotient obtained by dividing: (i) there are no representations or warranties the dollar value of Parent other than those expressly set forth in this Agreement; and the Deferred Consideration payable, by (ii) they have not relied the 20 day volume weighted average price of the Akerna Shares (converted to Canadian dollars from US dollars using the Exchange Rate as of the Deferred Consideration Payment Date) as quoted on the NASDAQ on the last trading day immediately preceding the issuance of such Exchangeable Shares, to be held and will not rely released by the Paying Agent to the holders of CVRs in respect accordance with the terms of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this AgreementRights Indenture.
(f) Any Milestone Payment Amounts made pursuant No certificates or other entitlements to this Section 3.4 represent consideration fractional Exchangeable Shares shall be issued to any holder of CVRs, and each holder of a CVR otherwise entitled to a fractional interest in addition to the Closing Consideration. The right to an Exchangeable Share will receive the Milestone Payment Amounts: nearest whole number of Exchangeable Shares (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights with fractions equal to or other rights of holders of capital stock of the Company; (ii) shall not be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipientgreater than 0.5 being rounded up and fractions less than 0.5 being rounded down), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and void.
(g) Subject Akerna covenants and agrees that following the Effective Time and until the expiration of the Deferred Consideration Period, Akerna shall cause Ample to make commercially reasonable efforts to preserve and expand the Recurring Revenue recognized by Ample during the Deferred Consideration Period, and Akerna shall not take, or permit Ample to take, any action or series of actions with respect to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled business and affairs of Ample that are intended to set-off lower or otherwise frustrate the Ample Shareholders’ entitlement to receive all or any unpaid indemnification obligations determined pursuant to Article 7 against portion of the then unpaid Milestone Payment AmountsDeferred Consideration.
Appears in 1 contract
Sources: Arrangement Agreement (Akerna Corp.)
Deferred Consideration. 5.1 Following Completion, subject to clauses 5.2, 5.3 and 27.4 and in accordance with clause 27, the Purchaser shall pay to the Seller consideration of $10,000,000 (athe Deferred Consideration) Notwithstanding anything which will be paid in this Agreement5 equal quarterly instalments of $2,000,000 commencing nine (9) months after Completion (each, none a Deferred Consideration Date), on the first Business Day of Parentsuch quarter.
5.2 Any amount to be deducted from the Deferred Consideration payable by the Purchaser to the Seller pursuant to clause 4.1(b), Merger Sub 5.3 or any of their respective Affiliates clause 27.4 (Athe Deduction Amount) shall be under applied to the extent possible against the amount payable on the first Deferred Consideration Date, and where the Deduction Amount exceeds the amount payable on such Deferred Consideration Date, any obligation or have any duty remaining Deduction Amount shall thereafter be applied to act in such a manner the extent possible against the amount payable on the next Deferred Consideration Date (and, where applicable, to amounts payable on each subsequent Deferred Consideration Date) provided always that any the aggregate of the amounts deducted on each Deferred Consideration is paid, or if payable, is maximized, (B) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or Date shall be bound by an agreement or covenant of any kindnot exceed the Deduction Amount.
5.3 The Purchaser shall, in respect of this Section 3.4 other than an obligation to comply accordance with clause 5.2, deduct from the covenants and agreements expressly Deferred Consideration, as set forth in this Section 3.4clause 5.1 above, it being an amount equal to the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration.
(b) Within thirty (30) days after each Deferred Consideration milestone has been achieved Actual Long Service Obligation once determined in accordance with Schedule 3 hereto, Parent 8.
5.4 Any payment of Deferred Consideration shall deliver a notice be treated as an adjustment to the Representative of such milestone, Initial Consideration for all tax and within ninety (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(c).
(c) At its sole discretion, Parent may choose to pay the Deferred Consideration in Cash or in Parent Consideration Stock or a combination of both, so long as the Parent Consideration Stock is issued in accordance with this Agreement.
(d) In no event shall the total number of Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part of the Closing Consideration or the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any options, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.
(e) The Share Recipients agree and acknowledge as accounting purposes to the Milestone Payment Amounts (as defined in Schedule 3 hereto) extent permitted by Law. The parties agree that for all U.S. federal and applicable state and local Tax purposes, (i) there are no representations or warranties of Parent other than those expressly set forth in any Deferred Consideration shall be treated as additional consideration for the transactions contemplated by this Agreement; agreement, and (ii) they have not relied and will not rely in respect the parties shall treat a portion of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreement.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition Deferred Consideration as interest for such Tax purposes to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock extent required under Section 483 of the Company; (ii) Code, and each party and their respective Affiliates shall not be evidenced report consistently with such allocations on any Tax Return, in any audit or proceeding before any Tax Authority or in any report made for Tax purposes, except in each case to the extent required by a certificate or other instrument; (iii“determination” within the meaning of Section 1313(a) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and voidCode.
(g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amounts.
Appears in 1 contract
Deferred Consideration. In addition to the Initial Consideration and any Earnout Consideration, Parent shall pay to the Sellers an aggregate amount of $14,000,000 (athe “Deferred Consideration Payment”), payable in twelve (12) Notwithstanding anything in this Agreement, none equal quarterly installments over a period of Parent, Merger Sub or any of their respective Affiliates thirty-six (A36) shall be under any obligation or have any duty to act in such a manner that any months immediately following the Closing Date. Each installment of the Deferred Consideration is paid, or if payable, is maximized, (B) will owe any holder of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or Payment shall be bound comprised of seventy-five percent (75%) cash (the “Deferred Cash Consideration”), payable in United States dollars, and twenty-five percent (25%) in shares of Parent Common Stock (the “Deferred Stock Consideration”), which shares shall be subject to the terms and conditions of Section 1(i)(iii) or Section 1(j), with the number of shares to be determined based on the applicable portion of the Deferred Stock Consideration divided by an agreement the Deferred Stock Consideration Stock Price. The Deferred Stock Consideration shall be allocated among the Sellers in accordance with their respective Pro Rata Shares. For the avoidance of doubt, the obligation to pay the Deferred Consideration Payment shall not be contingent upon the future performance of the Company or covenant the Business, nor upon the continued employment of any kindSeller, but are instead fixed payment obligations payable in respect of this Section 3.4 other than an obligation to comply with the covenants amounts and agreements expressly set forth in this Section 3.4, it being at the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimedtimes specified above; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing that the Deferred Consideration.
(b) Within thirty (30) days after each Deferred Consideration milestone has been achieved in accordance with Schedule 3 hereto, Parent Payment shall deliver a notice be subject to the Representative of such milestone, and within ninety (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent adjustment in accordance with Section 3.4(c1(i)(iii).
(c, set-off for finally determined indemnification obligations in accordance with Section 1(n), downward adjustment for Covered Events in accordance with Section 1(m)(i)(A) At its sole discretionand Section 1(m)(ii), Parent may choose to pay and tax withholding, if any, in accordance with Section 1(g). The Parties intend and agree that the Deferred Consideration in Cash or in Parent Consideration Stock or Payment constitutes a combination fixed obligation for the purposes of both, so long as the Parent Consideration Stock is issued in accordance with this Agreement.
(d) In no event shall the total number of Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part Subdivision 124-M of the Closing Consideration or the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time Income Tax Assessment Act 1997 (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any options, warrants or other convertible securitiesCth), unless Parent has first obtained and the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.
(e) The Share Recipients agree adjustments and acknowledge as to the Milestone Payment Amounts (as defined in Schedule 3 hereto) that (i) there are no representations or warranties of Parent other than those expressly set forth in this Agreement; set-off rights contemplated by Sections 1(i)(iii), 1(m)(i), and (ii) they have not relied and will not rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreement.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Company; (ii1(m)(ii) shall not be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more construed as rendering the Deferred Consideration Payment contingent upon the future performance of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument Company or the Business for Australian Tax purposes. The Parties shall use commercially reasonable efforts not to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, take any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection position inconsistent with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest foregoing characterization on any portion thereof; Tax Return or in any Tax proceeding, unless required by applicable law. For the avoidance of doubt, B▇▇▇▇ and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and void.
(g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to exercise set-off any unpaid indemnification obligations determined pursuant rights solely to Article 7 against the then unpaid Milestone extent expressly permitted in Section 1(i)(iii). Any set-off applied to the Deferred Consideration Payment Amountsshall be applied first to the Deferred Cash Consideration portion of the relevant installment, and to the extent such Deferred Cash Consideration is insufficient, to the Deferred Stock Consideration portion.
Appears in 1 contract
Sources: Share Purchase Agreement (Bitmine Immersion Technologies, Inc.)
Deferred Consideration. (a) Notwithstanding anything In addition to the Initial Consideration, Purchaser shall pay deferred consideration under this Agreement by payment to Seller of a total of ten deferred consideration units (each a “Deferred Consideration Unit” and, together, the “Deferred Consideration”). The amount paid for any Deferred Consideration Unit will be based upon a schedule substantially in the form of Schedule I that Purchaser shall deliver to Seller no later than 5:00 p.m., New York time, on the Business Day immediately preceding the Closing Date (the “Closing Deferred Consideration Schedule”). The Closing Deferred Consideration Schedule shall include a table setting forth (i) the Deferred Consideration Unit Price to be paid by Purchaser for a Deferred Consideration Unit, which amount will vary based upon (A) the amount of the Initial Consideration paid by Purchaser as set forth in Schedule II; and (B) the month in which Purchaser pays such Deferred Consideration Unit as set forth in Schedule II (with the parties agreeing to make proportional adjustments to the applicable Deferred Consideration Unit Prices to the extent that the Initial Consideration falls between the values set forth under “Initial Consideration” in Schedule II); (ii) the estimated total Deferred Consideration, assuming payment of five Deferred Consideration Units on and as of July 31, 2009 and payment of the remaining five Deferred Consideration Units on and as of October 30, 2009; and (iii) the estimated Purchase Price, which shall be equal to the sum of the aggregate value of the Initial Consideration and the aggregate Deferred Consideration calculated in accordance with clause (ii) above. The Purchaser shall pay at least five Deferred Consideration Units on or prior to July 31, 2009 and the Deferred Consideration shall be payable in full on or prior to October 30, 2009 pursuant to the terms of the Closing Deferred Consideration Schedule. Subject to the foregoing sentence, Purchaser may pay a Deferred Consideration Unit or Deferred Consideration Units at any time and from time to time, without penalty, provided that, except as set forth in subsection Section 5.8(c), each Deferred Consideration Unit shall be in an amount or, in any case in which such payment includes Purchaser Common Stock, have a value (determined as provided in subsection (c)(ii) below), equal to the Deferred Consideration Unit Price for the month in which the Deferred Consideration Payment Date (as defined below) occurs.
(b) The Deferred Consideration or any payment of any portion thereof shall be payable, at Purchaser’s election, in cash or in Purchaser Common Stock or a combination of cash and Purchaser Common Stock. Purchaser’s right to elect Purchaser Common Stock as the form of consideration is subject to the further limitations set forth in Sections 5.7 and 5.8 and conditioned upon the fulfillment of each of the following conditions on and as of the date of the applicable payment (the “Deferred Consideration Payment Date”):
(i) no Purchaser Material Adverse Effect shall have occurred and be continuing;
(ii) immediately after giving effect to such payment, Seller would not own more than 9.9% of the Purchaser Common Stock then outstanding;
(iii) after giving effect to such payment, Seller shall not have received more than 5,653,398 shares of Purchaser Common Stock pursuant to this Agreement, none and, except if required by the terms of ParentSection 5.18 herein, Merger Sub the filing of a Notification and Report Form pursuant to the HSR Act, no consent or approval of Purchaser’s shareholders or any governmental or regulatory authority or other Person pursuant to applicable Law or listing standards or the organizational documents of Purchaser or any contract, judgment or order by which Purchaser or any of their respective Affiliates its Subsidiaries is bound shall be required to be obtained by Purchaser in connection with such payment (after giving effect all prior payments), including pursuant to NASDAQ Rule 4350(i);
(iv) Purchaser (A) shall be under in compliance with the applicable listing criteria, procedures and guidelines of NASDAQ; (B) shall not have received notice from NASDAQ of its intent to delist the Purchaser Common Stock; and (C) shall not have taken any obligation or steps to delist the Common Stock from NASDAQ;
(v) the Purchaser Common Stock proposed to be transferred shall have any duty been authorized for listing on NASDAQ, subject only to act in such a manner that any official notice of issuance;
(vi) Purchaser shall be, and shall have been during the 90-day period immediately preceding the Deferred Consideration is paidPayment Date, subject to the reporting requirements of section 13 or if payable15(d) of the Exchange Act and shall have filed all required reports under section 13 or 15(d) of the Exchange Act (other than Form 8-K reports), is maximizedas applicable, during the 12-month period immediately preceding such Deferred Consideration Payment Date;
(vii) the price of Purchaser Common Stock as of the close of trading on the NASDAQ the last Business Day prior to the Deferred Consideration Payment Date shall not be less than $10 per share; and
(viii) Purchaser shall not be insolvent or have made a general assignment for the benefit of its creditors or any filing of a petition in commercial insolvency or reorganization; nor shall there have been (A) any filing by any other Person against Purchaser or any of its Subsidiaries, which shall not have been stayed or dismissed within 180 days after the filing date or any adjudication of Purchaser or any such Subsidiary as bankrupt or insolvent, (B) will owe any holder filing by or with the consent of Company Capital Stock Purchaser or any fiduciary such Subsidiary of any other proceeding for the appointment of a receiver, a conciliator or an auditor thereof or other custodian or similar duty in respect of this Section 3.4, official for its respective business or (C) will have any obligation, or shall be bound by an agreement or covenant of any kind, in respect of this Section 3.4 other than an obligation to comply with the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration.
(b) Within thirty (30) days after each Deferred Consideration milestone has been achieved in accordance with Schedule 3 hereto, Parent shall deliver a notice to the Representative of such milestone, and within ninety (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(c).
(c) At its sole discretion, Parent may choose to pay the Deferred Consideration in Cash or in Parent Consideration Stock or a combination of both, so long as the Parent Consideration Stock is issued in accordance with this Agreement.
(d) In no event shall the total number of Parent Consideration Stock issued hereunder (including, without limitation any Parent Consideration Stock issued as part of the Closing Consideration or the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any options, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.
(e) The Share Recipients agree and acknowledge as to the Milestone Payment Amounts (as defined in Schedule 3 hereto) that (i) there are no representations or warranties of Parent other than those expressly set forth in this Agreement; and (ii) they have not relied and will not rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by them, other than this Agreement.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Company; (ii) shall not be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or an immediate family memberassets, (C) the appointment by operation any court of lawcompetent jurisdiction of a receiver, a conciliator or an auditor or other custodian (permanent or temporary) of the assets of Purchaser or any such Subsidiary, or any part thereof; or (D) the institution of proceedings for a composition with creditors by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trusteeagainst Purchaser or any such Subsidiary, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each casethe case of items (A) through (D) of this subsection (viii) as applied to a Subsidiary of Purchaser, such transferee event or assignee shall provide events would also reasonably be expected to each adversely and materially affect the value of Parent and Purchaser Common Stock after the Representative, at their respective request, any evidence of applicable Deferred Consideration Payment Date (the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parentevents specified in clauses (i) through (viii) collectively, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f“Cash Payment Events”); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and void.
(g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amounts.
Appears in 1 contract
Deferred Consideration. (a) Notwithstanding anything in this Agreement, none of Parent, Merger Sub or any of their respective Affiliates Within ninety (A90) shall be under any obligation or have any duty to act in such a manner that any days after the first anniversary of the Deferred Consideration is paidClosing, or if payable, is maximized, (B) will owe any holder the Purchaser shall prepare and delivery to the Owner the Purchaser’s calculation of Company Capital Stock any fiduciary or other similar duty in respect of this Section 3.4, or (C) will have any obligation, or shall be bound by an agreement or covenant of any kind, in respect of this Section 3.4 other than an obligation to comply with the covenants and agreements expressly set forth in this Section 3.4, it being the Parties’ intention that any other covenants, agreements and/or obligations are expressly waived and disclaimed; provided, however, Parent and the Company (following the Closing) shall not take action with the primary and bad faith intention of avoiding or reducing the Deferred Consideration.First Anniversary Medicare
(b) Within thirty (30) calendar days after each of the final determination of the First Anniversary Medicare Advantage Revenue pursuant to Section 1.10(a), in the event that the First Anniversary Medicare Advantage Revenue equals or exceeds the Baseline Medicare Advantage Revenue the Purchaser or Holdings shall pay fourteen million U.S. Dollars ($14,000,000) in cash (the “Deferred Consideration milestone has been achieved in accordance with Schedule 3 hereto, Parent shall deliver a notice Consideration”) to the Representative of such milestone, and within ninety Sellers (90) days after the achievement of each Deferred Consideration milestone, Parent shall pay, or cause the Surviving Corporation to pay, the Pro Rata Share of each Share Recipient, to be paid in the method elected by Parent in accordance with Section 3.4(csame proportions as the Closing Cash Payment was paid).
(c) At its sole discretion, Parent may choose to pay The payment of the Deferred Consideration is subject to (i) the Owner’s continued employment in Cash good standing at the Purchaser on the first anniversary of the Closing Date, (ii) each Seller Parties’ continued compliance with all restrictive covenants contained in each of the Transaction Documents, and (iii) the Owner’s execution and continued compliance with that certain Compliance Attestation, attached hereto as Exhibit D. The foregoing notwithstanding, if the Owner’s employment is terminated by the Purchaser without Cause (as defined in the Owner’s Employment Agreement) or with Good Reason by the Owner (as defined in Parent Consideration Stock or a combination the Owner’s Employment Agreement), the Owner shall have been deemed to satisfy the requirements of both, so long as the Parent Consideration Stock is issued in accordance with this AgreementSection 1.10(d).
(d) In no Notwithstanding anything in this Agreement to the contrary, the Purchaser shall not make any payments in respect of the Deferred Consideration that the Purchaser is otherwise required to make, and the Purchaser may defer such payments if there exists and is continuing a default or an event shall of default under any credit agreement, guarantee or other agreement existing as of the total number Closing Date under which Purchaser or any of Parent Consideration Stock issued hereunder its subsidiaries has borrowed money as of the Closing Date (includingeach, a “Debt Agreement”) or if such payment would constitute a breach of, or result in a default or an event of default (with or without limitation any Parent Consideration Stock issued as the giving of notice or passage of time or both) on the part of the Closing Consideration Purchaser or any of its subsidiaries under any such Debt Agreement or would not be permitted under any applicable laws. If Purchaser is unable to make any payments in accordance with the Deferred Consideration) exceed 19.9% of the total outstanding capital stock of Parent as of the Effective Time (not including any Parent capital stock that is owned by Parent and without assuming the conversion or exercise of any optionspreceding sentence, warrants or other convertible securities), unless Parent has first obtained the required stockholder approval of the issuance of more than such number of Parent Consideration Stock pursuant to NASDAQ Marketplace Rule 5635.Purchaser shall make
(e) The Share Recipients agree During the period commencing on the date hereof and acknowledge as to ending on the Milestone Payment Amounts (as defined in Schedule 3 hereto) that first anniversary of the Closing Date, the Purchaser (i) there are no representations or warranties shall not change the methods of Parent other than those expressly set forth accounting for the Medicare Advantage Revenue in this Agreement; and (ii) they have not relied and will not rely in respect a manner that would adversely affect the calculation of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by themMedicare Advantage Revenue, other than this Agreement.
(f) Any Milestone Payment Amounts made pursuant to this Section 3.4 represent consideration in addition to the Closing Consideration. The right to receive the Milestone Payment Amounts: (i) does not give any Share Recipient dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Company; (ii) shall not be evidenced by a certificate or other instrument; maintain segregated financial records of the Medicare Advantage Revenue, and (iii) shall not be assignable take any action or otherwise transferrable, except by (A) will or intestate succession to an immediate family member, (B) to a trust whose beneficiaries consist exclusively omission that affects Medicare Advantage Revenue with the sole purpose of one or more avoiding the payment of the undersigned and/or an immediate family member, (C) by operation of law, (D) by instrument to an inter vivos or testamentary trust in which the Share Recipient’s right to the Milestone Payment Amounts is to be passed to beneficiaries upon the death of the trustee, (E) pursuant to a court order, (F) if such Share Recipient is a partnership, trust or a limited liability company, pursuant to (1) a permitted disposition to one or more partners or members of such Share Recipient or (2) an assignment or transfer to one or more Affiliates of such Share Recipient (excluding for purposes hereof, any portfolio company of such Share Recipient), (G) if such Share Recipient is a corporation, to an Affiliate of such Share Recipient or (H) without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; provided that, in each case, such transferee or assignee shall provide to each of Parent and the Representative, at their respective request, any evidence of the transfer or assignment that Parent or the Representative, as the case may be, may reasonably request. None of Parent, the Surviving Corporation or the Representative shall give effect to any purported assignment or transfer made in contravention of this clause (f); (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent any right other than the right to receive the consideration set forth in this Schedule 3.4. Any attempted transfer of the right to receive the Milestone Payment Amounts, other than as specifically permitted by the immediately preceding sentence, shall be null and voidDeferred Consideration.
(g) Subject to the limitations set forth in Article 7 (Indemnification), Parent shall be entitled to set-off any unpaid indemnification obligations determined pursuant to Article 7 against the then unpaid Milestone Payment Amounts.
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