Earnout. (a) At or prior to the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement. (b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of the Earnout Period, any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as of the date of issuance of such Earnout Shares, then such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Shares.
Appears in 1 contract
Sources: Business Combination Agreement (Atlantic Coastal Acquisition Corp.)
Earnout. (a) At or prior to Following the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Company interests acquired in connection with the Merger, within fifteen (15) five Business Days after the occurrence of a the Triggering Event during the Earnout PeriodEvent, ACAH SPAC shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior be issued to the Effective Time (other than holders of Dissenting Shares, if any, and Eligible Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Equityholders 9,000,000 SPAC Class A Ordinary Shares (which shall be equitably adjusted on account of any subdivision, for stock splitsplits, reverse stock splitsplits, stock dividenddividends, reorganizations, recapitalizations, reclassifications, combination, reclassification exchange of shares or similar equity restructuring other like change or transaction with respect to SPAC Class A Ordinary Shares occurring after the Closing) (the “Earnout Shares”) constituting the Per Share Earnout Consideration (which Earnout Shares, for the avoidance of doubt, shall be issued as SPAC Class A Ordinary Shares to all Eligible Company Equityholders), upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Agreements.
(b) For the avoidance of doubt, the Eligible Company Equityholders with respect to the Triggering Event shall be entitled to receive Earnout Shares upon the occurrence of the Triggering Event; provided, however, that in no event shall the Eligible Company Equityholders be entitled to receive more than an aggregate of 9,000,000 Earnout Shares pursuant to this Section 3.03 (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or any changes other like change or transaction with respect to SPAC Class A Ordinary Shares occurring after the Closing).
(c) If, during the Earnout Period, there is a Change of Control pursuant to which SPAC or its stockholders have the right to receive consideration implying a value per SPAC Class A Ordinary Share (as agreed in good faith by the ACAH New Common Sponsor and the board of directors of SPAC) of greater than or equal to $20.00, then, (i) immediately prior to such Change of Control, SPAC shall issue 9,000,000 SPAC Class A Ordinary Shares as a result (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of a mergershares or other like change or transaction with respect to SPAC Class A Ordinary Shares occurring after the Closing) to the Eligible Company Equityholders with respect to the Change of Control, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at thereafter, this Section 3.03 shall terminate and no further Earnout Shares shall be issuable hereunder.
(d) The SPAC Class A Ordinary Share price target set forth in the end definition of Triggering Event, and in Section 3.03(c) shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to SPAC Class A Ordinary Shares occurring after the Closing.
(e) At all times during the Earnout Period, any Earnout SPAC shall keep available for issuance a sufficient number of unissued SPAC Class A Ordinary Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders permit SPAC to satisfy in accordance with full its issuance obligations set forth in this Section 2.4 3.03 and shall take all actions reasonably required (including by convening any stockholder meeting) to increase the authorized number of SPAC Class A Ordinary Shares if at any time there shall be released insufficient unissued SPAC Class A Ordinary Shares to the Company by the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have permit such reservation. In no further event will any right to receive Earnout Shares be represented by any portion thereof. To negotiable certificates of any kind, and in no event will any holder of a contingent right to receive Earnout Shares take any steps that would render such rights readily marketable.
(f) SPAC shall take such actions as are reasonably requested by the extent that any portion Eligible Company Equityholders to evidence the issuances pursuant to this Section 3.03, including through the provision of an updated stock ledger showing such issuances (as certified by an officer of SPAC responsible for maintaining such ledger or the applicable registrar or transfer agent of SPAC).
(g) During the Earnout Period, SPAC shall use reasonable best efforts for SPAC to remain listed as a public company on, and for the SPAC Class A Ordinary Shares (including, when issued, the Earnout Shares) to be tradable over the national securities exchange (as defined under Section 6 of the Exchange Act) on which the SPAC Class A Ordinary Shares are then listed; provided, however, that subject to Section 3.03(c), the foregoing shall not limit SPAC from consummating a Change of Control or entering into a Contract that contemplates a Change of Control.
(h) Any payment of Earnout Shares issued in respect of Company Common Stock (taking into account the Conversion) to a an Eligible Company Equityholder relates hereunder shall be treated as comprised of two components, respectively, a principal component and an interest component, the amounts of which shall be determined as provided in Treasury Regulations Section 1.483-4(b) example (2) using the 3-month test rate of interest provided for in Treasury Regulations Section 1.1274-4(a)(1)(ii) employing the semi-annual compounding period. Notwithstanding anything to Exchanged Restricted Shares that remain unvested the contrary in this Agreement, as to the payment of the date of issuance of such Earnout Shares, then such Earnout Shares to each Eligible Company Equityholder (taking into account the Conversion) outstanding immediately prior to the Effective Time, Earnout Shares representing the principal component (with a value equal to the principal component) and Earnout Shares representing the interest component (with a value equal to the interest component) shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Sharesrepresented by separate share certificates.
Appears in 1 contract
Sources: Business Combination Agreement (Galata Acquisition Corp.)
Earnout. (ai) At or prior to During the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and period commencing on the Company), as escrow agent Business Combination Closing through the fifth anniversary following the Business Combination Closing (the “Escrow AgentEarnout End Date”), shall enter into an escrow agreement, effective as unless the closing price of the Effective TimeCompany’s Class A Shares (or any successor class of common shares listed on The New York Stock Exchange or The Nasdaq Stock Market) equals or exceeds $12.25 per share (as adjusted for share splits, in form and substance reasonably satisfactory to ACAH dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 consecutive trading day period or the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of its common shareholders having the right to exchange their common equity for consideration in cash, securities or other property which equals or exceeds $12.25 per share (as adjusted for share splits, dividends, reorganizations, recapitalizations and the like) (each an “Earnout Condition”), on the Earnout End Date or promptly thereafter (the “Escrow AgreementEarnout Forfeiture Date”), pursuant each BSOF Entity acknowledges and agrees that it shall surrender for no consideration any and all rights to such number of Class B Shares (including any Class A Shares into which ACAH shall issue in the name such Class B Shares are convertible) equal to 30.0% of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Class B Shares that would otherwise be subject held by such BSOF Entity immediately following the closing of the IPO (after accounting for any forfeitures required pursuant to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c1(c) hereto) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, ). For the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms avoidance of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”)doubt, the number of ACAH New Common Earnout Shares (rounded down to immediately following the nearest whole ACAH New Common Share) equal to closing of the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which IPO shall be equitably adjusted on account 157,500 Class B Shares.
(ii) Each BSOF Entity agrees that it shall not Transfer (as defined herein) any Earnout Shares until the earlier of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue the date on which one or cause more of the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) Conditions has been satisfied and (ii) at the end Earnout Forfeiture Date. For the avoidance of doubt, the foregoing lock-up provisions are in addition to the lock-up provisions applicable to each BSOF Entity’s Class B Shares contained elsewhere in this Agreement. Any attempted Transfer of Earnout Shares prior to the earlier of (i) the date on which one or more of the Earnout PeriodConditions has been satisfied and (ii) the Earnout Forfeiture Date, or any attempted Transfer of Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent pursuant to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 an agreement entered into prior to such date, shall be released to the Company by the Escrow Agent prohibited and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as of the date of issuance of such Earnout Shares, then such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Sharesvoid ab initio.
Appears in 1 contract
Earnout. (a) At or prior to After the Closing, ACAH subject to the terms and Continental Stock Transfer & Trust conditions set forth in this Section 4.4, the Company (or such other escrow agent mutually acceptable Shareholders as will be set forth in Exhibit H to ACAH and the Company), as escrow agent Acquisition Agreement (the “Escrow AgentEarnout Shareholders”) shall have the right to receive in the aggregate up to a maximum of an additional 4,000,000 Purchaser Class A Ordinary Shares (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”). The Earnout Shareholders’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) in the event that, between one (1) month after the Closing Date and the date that is twelve (12) months after the Closing Date, the VWAP of the Purchaser Class A Ordinary Shares over any twenty (20) Trading Days within any thirty (30) Trading Day period is greater than or equal to $15 (“Earnout Event 1”), then the Earnout Shareholders shall enter into an escrow agreementbe entitled to receive 1,000,000 Earnout Shares, effective as with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(ii) in the event that the revenue of the Effective TimePurchaser and its Subsidiaries on a consolidated basis by or before the first full fiscal year after the Closing Date, calculated based on a full fiscal year, as set forth in form and substance reasonably satisfactory the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to ACAH and the Company or exceeds $50,000,000 (the “Escrow AgreementEarnout Event 2”), pursuant then the Earnout Shareholders shall be entitled to which ACAH shall issue receive 1,000,000 Earnout Shares, with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iii) in the name event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the second full financial year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $100,000,000 (“Earnout Event 3”), then the Earnout Shareholders shall be entitled to receive 2,000,000 Earnout Shares, less any Earnout Shares previously issued in connection with Earnout Event 2, such that any Earnout Shares already issued under Earnout Event 2 shall not be reissued under this Section 4.4(a)(iii), with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iv) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the third full financial year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $200,000,000 (“Earnout Event 4”, together with Earnout Event 1, Earnout Event 2 and Earnout Event 3, the “Earnout Events” and each, an “Earnout Event”), then the Earnout Shareholders shall be entitled to receive 3,000,000 Earnout Shares, less any Earnout Shares previously issued in connection with Earnout Event 2 and/or Earnout Event 3, such that any Earnout Shares already issued under Earnout Event 2 or Earnout Event 3 shall not be reissued under this Section 4.4(a)(iv), with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(b) In the event that the applicable Earnout Event has not occurred during the applicable period, the Earnout Shareholders shall not be entitled to receive the applicable portion of the Earnout Pre-Closing Company Securityholders and deposit with Shares. For the Escrow Agent 30,000,000 ACAH New Common avoidance of doubt, each Earnout Shareholder shall be entitled to receive Earnout Shares less only upon the occurrence of each Earnout Event; provided, however, that (i) each Earnout Event may only occur once, if at all, (ii) the total number of ACAH New Common Earnout Shares shall not exceed 4,000,000, and (iii) in no event shall any Earnout Shareholder be entitled to receive, nor shall the Purchaser be obligated to issue to such Earnout Shareholder, more than the product of (1) the total amount of Earnout Shares specified in Section 4.4(a) for such Earnout Event (as adjusted) multiplied by (2) the applicable Pro Rata Portion of such Earnout Shareholder for such Earnout Event.
(c) In the event of a Change of Control Transaction, any amount of the Earnout Shares not previously issued will be vested immediately prior to such Change of Control Transaction. A “Change of Control Transaction” means: (i) the sale of all or substantially all of the consolidated assets of Purchaser and Purchaser Subsidiaries to a third-party purchaser; (ii) a sale resulting in no less than a majority of the voting power of the Purchaser being held by a Person that would otherwise be subject did not own a majority of the voting power prior to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(csuch sale; or (iii) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination recapitalization or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along reorganization of Purchaser with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in into a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Prethird-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes party purchaser that results in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end inability of the Earnout Period, any Earnout Shares that have not been issued by ACAH pre-transaction equity holders to designate or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion elect a majority of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as Board of Directors (or its equivalent) of the date of issuance of such Earnout Shares, then such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Sharesresulting entity or its parent company.
Appears in 1 contract
Sources: Reincorporation Merger Agreement (ASPAC III Acquisition Corp.)
Earnout. (a) At or prior to Following the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Company Shares acquired in connection with the Merger, within fifteen five (155) Business Days after the occurrence of a Triggering Event, Newco shall issue or cause to be issued to each applicable Eligible Company Equityholder pursuant to Section 4.11(f), with respect to each outstanding Company Share and Vested Company Option, as applicable, owned by such Eligible Company Equityholder immediately prior to the Effective Time, the applicable Per Share Earnout Consideration in connection with such Triggering Event (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to shares of Newco Class A Common Stock occurring after the Closing and upon or prior to the applicable Triggering Event), upon the terms and subject to the conditions set forth in this Agreement. For the avoidance of doubt, the Eligible Company Equityholders (excluding Eligible Company Equityholders in their capacity as holders of Unvested Company Options or Unvested Company RSUs solely to the extent they are eligible to receive Earnout RSU Shares pursuant to Section 4.11(e)) with respect to each Triggering Event shall be entitled to receive Earnout Shares upon the occurrence of such Triggering Event; provided, however, that each Triggering Event shall only occur once, if at all. Holders of Vested Company Options that are unexercised, issued and outstanding immediately before the Effective Time, holders of Unvested Company Options that hold related Converted Options that are vested as of such Triggering Event and holders of Unvested Company RSUs that hold related Converted RSUs that are vested as of such Triggering Event shall in each case receive the applicable Per Share Earnout Consideration in accordance with this paragraph and Section 4.11(f) and shall not receive Earnout RSUs pursuant to Section 4.11(e).
(b) At all times during the Earnout Period, ACAH Newco shall issue keep available for issuance a sufficient number of shares of unissued shares of Newco Class A Common Stock to permit Newco to satisfy in full its issuance obligations set forth in this Section 4.11 and shall take all actions reasonably required (including by convening any shareholder meeting and soliciting any required consents or cause approvals from shareholders) to increase the Escrow Agent authorized number of shares of Newco Class A Common Stock if at any time there shall be insufficient unissued shares of Newco Class A Common Stock to disburse permit such reservation. In no event will any right to each receive Earnout Shares or Earnout RSU Shares be represented by any negotiable certificates of any kind, and in no event will any holder of a contingent right to receive Earnout Shares or Earnout RSU Shares take any steps that would render such rights readily marketable.
(c) Newco shall take such actions as are reasonably requested by the Eligible Company EquityholderEquityholders to evidence the issuances pursuant to this Section 4.11, including through the provision of an updated register of members showing such issuances (as certified by a director or officer of Newco responsible for maintaining such register of members or the applicable registrar or transfer agent of Newco).
(d) During the Earnout Period, Newco shall use reasonable best efforts for Newco to remain listed as a public company on, and for the shares of Newco Class A Common Stock (including, when issued, the Earnout Shares) to be tradable over the national securities exchange (as defined under Section 6 of the Exchange Act) on which the shares of Newco Class A Common Stock are then listed.
(e) Notwithstanding anything to the contrary contained herein, in lieu of receiving Earnout Shares, holders of Unvested Company Options that are unexercised, issued and outstanding and holders of Unvested Company RSUs outstanding, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in issued Earnout RSUs upon the ACAH New Common Shares as a result occurrence of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of the Earnout Period, any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders Trigging Event in accordance with this Section 2.4 4.11(e) to the extent the Converted Option related to such Unvested Company Option or the Converted RSU related to such Unvested Company RSU is outstanding and unvested as of the occurrence of a Triggering Event. If the Converted Option or Converted RSU related to such Unvested Company Option or Unvested Company RSU, as applicable, was forfeited after the Effective Time but prior to such Triggering Event, no Earnout RSUs will be issued for such Unvested Company Option or Unvested Company RSU, as applicable. The number of Earnout RSUs issued with respect to each Unvested Company Option shall be released equal to (i) Per Share Earnout Consideration multiplied by (ii) the aggregate number of Company Shares underlying the applicable Unvested Company Option (assuming payment in cash of the exercise price of such Unvested Company Option) multiplied by (iii) the percentage of the shares of Newco Class A Common Stock subject to the related Converted Option that are unvested as of the Triggering Event. The number of Earnout RSUs issued with respect to each Unvested Company RSU shall be equal to the (i) Per Share Earnout Consideration multiplied by (ii) the Escrow Agent aggregate number of Company Shares underlying the applicable Unvested Company RSU multiplied by (iii) the percentage of the shares of Newco Class A Common Stock subject to the related Converted RSU that are unvested as of the Triggering Event. Each Earnout RSU shall be subject to forfeiture if the underlying vesting conditions of the applicable Converted Option associated with the Unvested Company Option or Converted RSU associated with the Unvested Company RSU are not attained, and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders such forfeiture restrictions shall have no further right lapse with respect to receive any portion thereof. To the extent that any a pro rata portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as RSUs held by each holder of Earnout RSUs upon the satisfaction of such underlying vesting conditions of the date of issuance of such applicable Converted Option associated with the Unvested Company Option or Converted RSU associated with the Unvested Company RSU and the relevant Earnout Shares, then such Earnout RSU Shares shall be subject issued to such holder. Earnout RSUs that have been forfeited shall be reallocated pro rata to the same vesting conditions applicable to the corresponding Exchanged Restricted other holders of Converted Options and Converted RSUs then outstanding with holders of vested Converted Options and Converted RSUs receiving Earnout RSU Shares over and holders of unvested Converted Options and Converted RSUs receiving Earnout RSUs that vest pro-rata in accordance with the remaining vesting schedule of the underlying unvested Converted Option or Converted RSU.. Each Earnout RSU shall be subject to adjustment in accordance with Section 4.11(a) as if such Exchanged Restricted Earnout RSU were an Earnout Share, and shall not be entitled to dividends paid with respect to the shares of Newco Class A Common Stock during the forfeiture period.
(f) In any issuance of shares of Newco Class A Common Stock to Eligible Company Equityholders pursuant to Section 4.11(a) or 4.11(e), each Eligible Company Equityholder shall receive a number of Earnout Shares or Earnout RSU Shares, as applicable, equal to the applicable Per Share Earnout Consideration multiplied by the sum of the number of Company Shares Outstanding and the number of shares of Company Common Stock issued or exercisable upon the exercise of all Company Options and settlement of Unvested Company RSUs, as applicable, in each case held by such Eligible Company Equityholder immediately before the Effective Time, subject to further adjustment and reallocation, to the extent applicable, as a result of forfeiture of any Earnout RSUs as provided in Section 4.11(e).
(g) Any Earnout Shares received by an Eligible Company Equityholder pursuant to Section 4.11(a) shall be treated as additional shares of Newco Class A Common Stock received in the Merger for all applicable U.S. federal, state and local Tax purposes, except as otherwise required by Applicable Law pursuant to a “final determination” within the meaning of Section 1313(a) of the Code (or any similar provision of applicable U.S. state or local Applicable Law).
(h) The Parties intend that none of the rights to receive the Earnout Shares and any interest therein shall be deemed to be a “security” for purposes of any securities law of any jurisdiction. The right to receive the Earnout Shares are deemed contractual rights in connection with the Merger and the parties do not view the right to receive the Earnout Shares as an investment by the holders thereof. The right to receive the Earnout Shares will not be represented by any physical certificate or similar instrument. The right to receive the Earnout Shares does not represent an equity or ownership interest in any entity. No interest in the right to receive the Earnout Shares may be sold, transferred assigned, pledged, hypothecated, encumbered or otherwise disposed of, except by operation of law, and any attempt to do so shall be null and void. For the avoidance of doubt, (i) once issued, the Earnout Shares shall be considered a “security” for purposes of any securities law of any jurisdiction and the restrictions set forth in the foregoing sentence shall not apply to such issued Earnout Shares, and (ii) no Earnout Shares shall be included in the calculation of the aggregate number of shares of Newco Common Stock outstanding at or immediately after the Closing for purposes of this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Duddell Street Acquisition Corp.)
Earnout. (a) At or prior to Following the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH as additional consideration for the Purchase and the Company)transactions contemplated hereby, as escrow agent within five (5) Business Days after the “Escrow Agent”), shall enter into an escrow agreement, effective as determination of the Effective Time2023 EBITDA, in form and substance reasonably satisfactory to ACAH and the Company and Acquiror (the “Escrow Agreement”), pursuant to which ACAH as applicable) shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise or cause to be subject issued to Earnout RSUs issuable to all Eligible Holders each Member (in accordance with Section 2.4(cits respective Pro Rata Share) the following number of Company Common Units and shares of Acquiror Class C Common Stock (which shall be equitably adjusted on account of any subdivision, for stock splitsplits, reverse stock splitsplits, stock dividenddividends, reorganizations, recapitalizations, reclassifications, combination, reclassification exchange of shares or similar equity restructuring other like change or transaction with respect to Company Common Unit and Acquiror Class C Common Stock occurring on or any changes in after the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAHClosing) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow PropertyEquity”), in a segregated escrow account and disbursed therefrom in accordance with upon the terms of and subject to the conditions set forth in this Section 2.4 and the Escrow Agreement.:
(bi) Except as otherwise provided in Section 2.4(c), as additional consideration for If the Merger, within fifteen 2023 EBITDA is greater than $60,000,000 (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company SecurityholdersMinimum EBITDA Target”), the number a one-time issuance of ACAH New Common Shares 200,000 units and shares, as applicable, of Earnout Equity, for each $1,000,000 of EBITDA (rounded down to the nearest whole ACAH New $1,000,000) in excess of the Minimum EBITDA Target, up to a maximum of 3,000,000 units and shares, as applicable, of Earnout Equity.
(b) Notwithstanding the foregoing, the Acquiror shall be permitted to satisfy its obligation to deliver Earnout Equity pursuant to the Minimum EBITDA Target by (i) delivering $12.50 cash per unit and share, as applicable, of Earnout Equity within thirty (30) calendar days of determination of the 2023 EBITDA or (ii) if the Acquiror Trading Price exceeds $14.00 per share, by delivering the number of shares of Acquiror Class A Common Share) Stock equal to (x) the product aggregate number of such units and shares, as applicable, of Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share Equity multiplied by 15,000,000 $12.50, divided by (which y) the Acquiror Trading Price; provided, that the Acquiror Trading Price shall be equitably adjusted on account of any subdivision, for stock splitsplits, reverse stock splitsplits, stock dividenddividends, combinationreorganizations, reclassification recapitalizations, reclassifications, combinations, exchanges of shares or similar equity restructuring transaction other like changes or any changes in transactions with respect to Company Common Unit and Acquiror Class C Common Stock occurring on or after the ACAH New Common Shares as a result Closing.
(c) For the avoidance of a mergerdoubt, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything the Members shall be entitled to receive Earnout Equity only with respect to the contrary contained herein2023 EBITDA, (i) and in no event shall ACAH the Members be required under this Section 2.4 entitled to issue or cause the Escrow Agent to disburse receive more than an aggregate number of 3,000,000 units and shares, as applicable, of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of the Earnout Period, any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as of the date of issuance of such Earnout Shares, then such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted SharesEquity.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Stratim Cloud Acquisition Corp.)
Earnout. (a) At or prior to Following the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the MergerMerger and the transactions contemplated hereby, within fifteen five (155) Business Days after the occurrence of a the Triggering Event during the Earnout PeriodEvent, ACAH Acquiror shall issue or cause the Escrow Agent to disburse be issued to each Eligible Company Equityholder, Equityholder as of such date (in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout in accordance with its respective Pro Rata Share multiplied by 15,000,000 Earnout Portion) an aggregate of 1,078,125 shares of Acquiror Stock (which shall be equitably adjusted on account of any subdivision, for stock splitsplits, reverse stock splitsplits, stock dividenddividends, reorganizations, recapitalizations, reclassifications, combination, reclassification exchange of shares or similar equity restructuring other like change or transaction or any changes in with respect to Acquiror Stock occurring after the ACAH New Common Shares as a result of a mergerClosing) (such shares, consolidationthe “Earnout Shares”), reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything upon the terms and subject to the contrary contained herein, (i) conditions set forth in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of the Earnout PeriodAgreement; provided that, any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled or disposed respect of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to RSA exchanged for an Exchanged Restricted Shares RSA that remain remains unvested as of the date of issuance of such Earnout Shares, then Triggering Event and any such Earnout Shares issued in connection therewith pursuant to this Section 3.12 shall vest in equal amounts (or as close as possible, with any excess shares vesting on the last vesting date) over the remaining vesting schedule of the applicable Exchanged RSA, and shall be subject to the same vesting conditions applied to such Exchanged RSA; provided, further, that any such issuance of Earnout Shares will not be made to any Eligible Company Equityholder for which a filing under the HSR Act is required in connection with the issuance of Earnout Shares, until the applicable waiting period under HSR Act has expired or been terminated.
(b) For the avoidance of doubt, (i) Eligible Company Equityholders shall be entitled to receive Earnout Shares upon the first occurrence of the Triggering Event and in no event shall the Eligible Company Equityholders be entitled to receive more than the 1,078,125 shares of Acquiror Stock pursuant to this Section 3.12; (ii) to the corresponding Exchanged Restricted extent the Triggering Event does not occur in accordance with the terms of this Agreement, then any Earnout Shares over that would otherwise be issued under this Agreement as a result of the remaining vesting schedule occurrence of such Exchanged Restricted the Triggering Event shall instead be forfeited and cancelled without the payment of any consideration in respect thereof, and (iii) until the Closing occurs, Acquiror shall have no obligations under this Section 3.12, including any obligation to issue or cause to be issued any Earnout Shares and the Eligible Company Equityholders shall have no right to receive any Earnout Shares.
(c) If, after the Closing and on or prior to the two (2) year anniversary of the Closing Date, there is a Change of Control pursuant to which Acquiror or its stockholders have a right to receive consideration implying value of Acquiror Common Stock (as agreed in good faith by the Acquiror Board) of equal to or greater than $13.00, then (i) immediately prior to such Change of Control, Acquiror shall issue the Earnout Shares to the Eligible Company Equityholders (in accordance with each Eligible Company Equityholders’ respective Pro Rata Earnout Portion) and (ii) thereafter, this Section 3.12 shall terminate and no further Earnout Shares shall be issuable hereunder.
Appears in 1 contract
Earnout. (a) At or prior to After the Closing, ACAH subject to the terms and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company)conditions set forth herein, as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case Shareholders as of immediately prior to the Effective Time Closing who are Non-Electing Company Security Holders and the Company Shareholders as of immediately prior to the Closing who are Electing Company Security Holders shall have the contingent and non-transferrable right to receive their Pro Rata Share of up to an aggregate additional twenty five million (other than holders 25,000,000) shares of Dissenting Pubco Class A Common Stock in the case of Non-Electing Company Security Holders and Exchangeable Shares, if anyin the case of Electing Company Security Holders, plus an aggregate amount of shares of PubCo Class A Common Stock in the case of Non-Electing Company Security Holders and Exchangeable Shares, in the case of Electing Company OptionsSecurity Holders, equal to the “Additional Company Incentive Shares” provided by the Company pursuant to Section 8.18(b) (collectivelysubject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), as additional consideration based on the performance of the Pubco Class A Common Stock or achievement of certain clinical milestones during the five (5) year period after the Closing (the “Earnout Period”). Subject to the terms and conditions of this Agreement, the Company Shareholders’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) the Company Shareholders shall be entitled to receive one-third (1/3) of the Earnout Shares in the event that the VWAP of the Pubco Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier I Share Price Target”), for twenty (20) Trading Days out of any consecutive twenty (20) Trading Day period during the Earnout Period;
(ii) the Company Shareholders shall be entitled to receive an additional one-third (1/3) of the Earnout Shares in the event that either (i) the VWAP of the Pubco Class A Common Stock equals or exceeds $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier II Share Price Target”), for twenty (20) Trading Days out of any consecutive twenty (20) Trading Day period during the Earnout Period, or (ii) the Company successfully completes a Phase 1B clinical trial for multiple myeloma, meaning for this purpose, the completion of an interim data analysis which is sufficient to obtain an agreement with the FDA in which the FDA permits the Company to move forward to a phase 2 clinical study following a Type B End-of-Phase-1 meeting (the “First Clinical Milestone”); and
(iii) the Company Shareholders shall be entitled to receive the remaining one-third (1/3) of the Earnout Shares in the event that either (i) the VWAP of the Pubco Class A Common Stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Tier III Share Price Target” and, together with the Tier I Share Price Target and the Tier II Share Price Target, the “Share Price Targets”) for twenty (20) Trading Days out of any consecutive twenty (20) Trading Day period during the Earnout Pre-Closing Period, or (ii) the Company Securityholderssuccessfully completes an FDA required bridging study in healthy volunteers that proves bioequivalence between the ambulatory subcutaneous delivery pump and either a transdermal patch or an on body subcutaneous delivery pump (the “Second Clinical Milestone”, and, together with the First Clinical Milestone, the “Clinical Milestones”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata . The Share multiplied by 15,000,000 (which Price Targets shall be equitably adjusted on account of for any subdivisionconsolidation, stock split, reverse stock split, stock dividend, combination, reclassification split or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything change to the contrary contained herein, (i) in no Pubco Class A Common Stock during the Earnout Period. In the event shall ACAH be required under this Section 2.4 to issue that the applicable Share Price Target or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of Clinical Milestone is not met during the Earnout Period, any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders Shareholders shall have no further right not be entitled to receive any portion thereof. To the extent that any applicable portion of the Earnout Shares for such Share Price Target or Clinical Milestone. For the avoidance of doubt, Earnout Shares shall vest and be issued only in connection with the first achievement of a Share Price Target or Clinical Milestone during the Earnout Period, and the Company Shareholders shall not be entitled to Earnout Shares for any subsequent achievement of such Share Price Target. The achievement of any Share Price Target shall be deemed to include the achievement of any lower Share Price Target, and Pubco shall issue the Earnout Shares attributable to each Share Price Target together (upon which such lower included Share Price Targets shall be deemed achieved and no further Earnout Shares shall become payable upon subsequent achievements of such lower included Share Price Targets).
(b) Pubco’s Chief Financial Officer (“CFO”) shall monitor the VWAP of Pubco Class A Common Stock on each Trading Day during the Earnout Period, and as soon as practicable (and in any event within ten (10) Business Days) after the end of each monthly anniversary of the Closing during the Earnout Period, the CFO will prepare and deliver to the Seller Representative and the Purchaser Representative (each, a “Representative Party”) a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of Pubco Class A Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly period and (ii) whether a Share Price Target has been achieved during such monthly anniversary period. Similarly, as soon as practicable, and in any event within five (5) Business Days after a Clinical Milestone has been achieved, the CFO will send an Earnout Statement to each Representative Party indicating that a Clinical Milestone has occurred, along with the details of such Clinical Milestone. Each Representative Party will have ten (10) Business Days after its receipt of an Earnout Statement to review it, and each Representative Party and its Representatives on its behalf may make inquiries to the CFO and related Purchaser and Company Equityholder relates personnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to Exchanged Restricted Shares that remain unvested as an Earnout Statement, such Representative Party shall deliver to Pubco (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within ten (10) Business Days following the date of issuance delivery of such each Earnout SharesStatement, then such Representative Party will have waived its right to contest such Earnout Shares Statement and the calculation of the VWAP of Pubco Class A Common Stock during the applicable portion of the Earnout Period (and whether a Share Price Target has been achieved) or whether a Clinical Milestone has occurred as set forth therein. If such written statement is delivered by a Representative Party within such ten (10) Business Day period, then the Representative Parties shall be subject negotiate in good faith to resolve any such objections for a period of ten (10) Business Day thereafter. If the Representative Parties do not reach a final resolution within such ten (10) Business Day period, then upon the written request of either Representative Party the Representative Parties will refer the dispute to the same vesting conditions applicable Independent Expert for final resolution of the dispute in accordance with Section 2.5(c). For purposes hereof, the “Independent Expert” shall mean, with respect any dispute as to the corresponding Exchanged Restricted Shares over achievement of the remaining vesting schedule Share Price Targets, a mutually acceptable independent (i.e., no prior material business relationship with any party for the prior two (2) years) accounting firm appointed by the Purchaser Representative and the Seller Representative, and, with respect to any dispute as to the achievement of such Exchanged Restricted Sharesthe Clinical Milestones, a mutually acceptable expert with experience in clinical trial consulting for cancer products.
Appears in 1 contract
Sources: Business Combination Agreement (Healthwell Acquisition Corp. I)
Earnout. (a) At or prior to Following the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the MergerMerger and the transactions contemplated hereby, within fifteen five (155) Business Days after the occurrence of a Triggering Event, Acquiror shall issue or cause to be issued to the Eligible Company Equityholders (in each case, in accordance with their respective Pro Rata Shares) 7,500,000 shares of Acquiror Common Stock (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing) (such shares, the “Earnout Shares”), upon the terms and subject to the conditions set forth in this Agreement, as follows:
(i) Upon the occurrence of Triggering Event I, a one-time issuance of 2,500,000 Earnout Shares (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing); and
(ii) Upon the occurrence of Triggering Event II, a one-time issuance of 2,500,000 Earnout Shares (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing); and
(iii) Upon the occurrence of Triggering Event III, a one-time issuance of 2,500,000 Earnout Shares (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing).
(b) For the avoidance of doubt, the Eligible Company Equityholders shall be entitled to receive Earnout Shares upon the occurrence of each Triggering Event; provided, however, that each Triggering Event shall only occur once, if at all, and in no event shall the Eligible Company Equityholders be entitled to receive more than an aggregate of 7,500,000 Earnout Shares (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing); provided, further, that Triggering Event I, Triggering Event II and Triggering Event III may be achieved at the same time or on overlapping Trading Days.
(c) If, during the Earnout Period, ACAH there is a Change of Control pursuant to which Acquiror or its stockholders have the right to receive consideration implying a value per share of Acquiror Common Stock (as agreed in good faith by the Sponsor and the board of directors of the Acquiror) of:
(i) less than $15.00 (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control, but without giving effect to the shares of Acquiror Common Stock issuable pursuant to this Section 3.4(c)), then this Section 3.4 shall terminate and no Earnout Shares shall be issuable hereunder;
(ii) greater than or equal to $15.00 but less than $20.00 (each, as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control, but without giving effect to the shares of Acquiror Common Stock issuable pursuant to this Section 3.4(c)), then, (A) immediately prior to such Change of Control, Acquiror shall issue 2,500,000 shares of Acquiror Common Stock (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or cause other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Escrow Agent Closing and prior to disburse such Change of Control) to the Eligible Company Equityholders (in accordance with each Eligible Company Equityholder’s respective Pro Rata Share) and the Eligible Company Equityholders shall be eligible to participate in such Change of Control and (B) thereafter, this Section 3.4 shall terminate and no further Earnout Shares shall be issuable hereunder; or
(iii) greater than or equal to $20.00 but less than $25.00 (each, as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control, but without giving effect to the shares of Acquiror Common Stock issuable pursuant to this Section 3.4(c)), then, (A) immediately prior to such Change of Control, Acquiror shall issue 5,000,000 shares of Acquiror Common Stock (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control) to the Eligible Company Equityholders (in accordance with each case Eligible Company Equityholder’s respective Pro Rata Share) and the Eligible Company Equityholders shall be eligible to participate in such Change of Control and (B) thereafter, this Section 3.4 shall terminate and no further Earnout Shares shall be issuable hereunder; or
(iv) greater than or equal to $25.00 (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control, but without giving effect to the shares of Acquiror Common Stock issuable pursuant to this Section 3.4(c)), then, (A) immediately prior to such Change of Control, Acquiror shall issue 7,500,000 shares of Acquiror Common Stock (as equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to Domesticated Acquiror Common Stock occurring on or after the Closing and prior to such Change of Control) to the Eligible Company Equityholders (in accordance with each Eligible Company Equityholder’s respective Pro Rata Share) and the Eligible Company Equityholders shall be eligible to participate in such Change of Control and (B) thereafter, this Section 3.4 shall terminate and no further Earnout Shares shall be issuable hereunder.
(d) If, during the Earnout Period, (i) any liquidation, dissolution or winding up of Acquiror is initiated, (ii) any bankruptcy, dissolution or liquidation proceeding is instituted by or against Acquiror or (iii) Acquiror makes an assignment for the benefit of creditors or consents to the appointment of a custodian, receiver or trustee for all or substantial part of its assets or properties, then any Earnout Shares that have not been previously issued by Acquiror (whether or not previously earned) shall be deemed earned and due by Acquiror to the Eligible Company Equityholders (in accordance with each Eligible Company Equityholder’s respective Pro Rata Share).
(e) Notwithstanding anything in this Agreement to the contrary, any Earnout Shares issuable under this Section 3.4 to any Eligible Company Equityholder in respect of Company Options or Company RSUs held by such Eligible Company Equityholder as of immediately prior to the Effective Time shall be issued to such Eligible Company Equityholder only if such Eligible Company Equityholder continues to provide services (other than holders whether as an employee, director or individual independent contractor) to Acquiror or one of Dissenting Shares, if any, and Company Options) (collectively, its Subsidiaries through the “date of the occurrence of the corresponding Triggering Event that causes such Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to become issuable. Any Earnout Shares that are forfeited pursuant to the nearest whole ACAH New Common Share) equal preceding sentence shall be reallocated to the product of such other Eligible Company Equityholder who remain entitled to receive Earnout Pre-Closing Company Securityholders Earnout Shares in accordance with their respective Pro Rata Share multiplied by 15,000,000 Shares.
(which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). f) Notwithstanding anything to the contrary contained herein, no fraction of an Earnout Share will be issued by virtue of any Triggering Event, and each Person who would otherwise be entitled to a fraction of an Earnout Share (iafter aggregating all fractional Earnout Shares that otherwise would be received by such Person in connection with the occurrence of such Triggering Event) in no event shall ACAH be required under this Section 2.4 to issue or cause instead have the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject issued to such Person rounded up to the nearest whole Earnout RSUs in excess of 30,000,000 ACAH New Common Share.
(g) The rights to the Earnout Shares (which shall be equitably adjusted on account of any subdivisioni) are solely contractual rights, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of the Earnout Periodwill not be evidenced by a certificate, do not constitute securities or other instruments and are not readily marketable, and (iii) may not be sold, assigned, transferred, pledged, encumbered or in any Earnout Shares that have not been issued by ACAH or disbursed by the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by the Escrow Agent and cancelled other manner transferred or disposed of by the Company of, in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as of the date of issuance of such Earnout Shares, then such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Shareswhole or in part.
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Earnout. (a) At or prior to After the Closing, ACAH subject to the terms and Continental Stock Transfer & Trust Company conditions set forth herein, the Stockholders shall have the contingent right to receive additional consideration from Parent based on the performance of Parent and its Subsidiaries if the requirements as set forth in this Section 2.10 are achieved. If during the thirty-six (or such other escrow agent mutually acceptable to ACAH and 36) month period following the Company), as escrow agent Closing Date (the “Escrow AgentEarnout Period”), shall enter into an escrow agreement, effective as the closing price per share of the Effective Time, Parent Common Stock on any twenty (20) trading days in form and substance reasonably satisfactory to ACAH and the Company any thirty (30) consecutive day trading period (i) equals or exceeds Fourteen Dollars ($14.00) (the “Escrow AgreementFirst Share Price Trigger”), pursuant to which ACAH shall issue in or (ii) equals or exceeds Sixteen Dollars ($16.00) (the name of the Earnout Pre-Closing Company Securityholders and deposit “Second Share Price Trigger” and, together with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivisionFirst Share Price Trigger, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as each a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (Share Price Trigger” and collectively, the “Earnout Escrow PropertyShare Price Triggers”)) then, in a segregated escrow account and disbursed therefrom in accordance with for each Share Price Trigger that is achieved, the terms holders of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case Common Stock as of immediately prior to the Effective Time shall receive additional consideration (other than holders in accordance with their Pro Rata Share) from Parent (each, an “Earnout Release”) of Dissenting SharesTwo Million Five Hundred Thousand (2,500,000) shares of Parent Common Stock released from the Escrow Account (which shall be equitably adjusted for stock splits, if anystock dividends, combinations, recapitalizations and Company Optionsthe like that occur after the Closing and prior to the relevant Earnout Release) (collectively, the “Earnout Pre-Closing Company SecurityholdersShares”). For the avoidance of doubt and notwithstanding anything contained in this Agreement, the number holders of ACAH New Company Common Shares Stock shall have the right to receive no more than two Earnout Releases, an Earnout Release may only be achieved once with respect to any Share Price Trigger and the aggregate sum of all Earnout Releases issuable hereunder (rounded down to assuming both Share Price Triggers are achieved), shall be a maximum of Five Million (5,000,000) shares of Parent Common Stock in the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 aggregate (which shall be equitably adjusted on account of any subdivisionfor stock splits, stock splitdividends, reverse stock splitcombinations, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in recapitalizations and the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything like that occur after the Closing and prior to the contrary contained hereinrelevant Earnout Release).
(b) If, during the Earnout Period, there is a Change of Control, then any Earnout Release that has not previously been released from escrow to the Stockholder Representative (whether or not previously earned) shall be deemed earned (and the applicable Share Price Trigger(s) achieved, as applicable); provided, however, that such Earnout Release shall be deemed earned (and the applicable Share Price Trigger(s) achieved, as applicable) only (i) if such Change of Control has been approved by a majority of the independent directors on the Parent Board; and (ii) to the extent the price per share of Parent Common Stock in no event the Change of Control exceeds the applicable Share Price Trigger. Upon such Change of Control if applicable, Parent and the Stockholder Representative shall ACAH be required under this Section 2.4 to issue or cause jointly direct the Escrow Agent to disburse an aggregate release from the Escrow Account to Stockholder Representative a number of shares equal to such remaining Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess Release(s) within ten (10) Business Days following the date of 30,000,000 ACAH New Common Shares such Change of Control.
(which shall be equitably adjusted on account of any subdivisionc) If, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end of during the Earnout Period, there is a Final Determination in accordance with this Section 2.10 that the Stockholders are entitled to receive a Earnout Release, then Parent and the Stockholder Representative shall jointly direct the Escrow Agent to release from the Escrow Account to Stockholder Representative a number of shares equal to such Earnout Release within ten (10) Business Days following the date on which the applicable Share Price Trigger was met or exceeded.
(d) With respect to any Earnout Shares that have not been issued by ACAH released during the Earnout Period pursuant to this Section 2.10 within five (5) Business Days following the date that it is finally determined that the Stockholders are not entitled to or disbursed by eligible to receive any further Earnout Releases under this Agreement, Parent and the Stockholder Representative shall jointly direct the Escrow Agent to Earnout Pre-Closing Company Securityholders in accordance with this Section 2.4 shall be released to the Company by release from the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right Account to receive any portion thereof. To the extent that any portion of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as of the date of issuance of such Earnout Shares, then Parent for immediate cancellation all such Earnout Shares shall be subject to the same vesting conditions applicable to the corresponding Exchanged Restricted Shares over the remaining vesting schedule of such Exchanged Restricted Sharesthat have not been released.
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Earnout. (a) At or After the Closing, subject to the terms and conditions set forth herein, each Company Stockholder immediately prior to the Closing and each Earnout Optionholder (collectively, the “Earnout Participants”) shall have the contingent right to receive up to an additional Six Million (6,000,000) shares of SPAC Common Stock (subject to equitable adjustment for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing, ACAH and Continental Stock Transfer & Trust Company (including to account for any equity securities into which such shares are exchanged or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjustedconverted, the “Earnout Shares”) based on the VWAP of the SPAC Common Stock during the five (5) year period commencing on the Closing Date (the “Earnout Period”) in accordance with this Section 1.10(a). Unless otherwise required by Law, all issuances of Earnout Shares to the Earnout Participants other than with respect to their Company Options shall be heldtreated by the Parties as an adjustment to the Stockholder Merger Consideration received by the Earnout Participants pursuant to Article I hereof. Subject to receipt of the necessary Transmittal Documents in accordance with Section 1.12(b), along with any other the Earnout Participants’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) if the VWAP of the SPAC Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, distributions or other income on such Earnout Shares (collectivelyreorganizations and recapitalizations, the “Tier I Share Price Target ”) for any twenty (20) Trading Days within any consecutive thirty (30) Trading Day period commencing at least 150 days after the Closing Date but prior to the expiration of the Earnout Escrow PropertyPeriod, then, subject to the terms and conditions of this Agreement, the Earnout Participants shall be entitled to receive Two Million (2,000,000) Earnout Shares;
(ii) if the VWAP of the SPAC Common Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations, the “Tier II Share Price Target”)) for any twenty (20) Trading Days within any consecutive thirty (30) Trading Day period commencing at least 150 days after the Closing Date but prior to the expiration of the Earnout Period, then, subject to the terms and conditions of this Agreement, the Earnout Participants shall be entitled to receive Two Million (2,000,000) Earnout Shares; and
(iii) if the VWAP of the SPAC Common Stock equals or exceeds $20.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations, the “Tier III Share Price Target,” and each of the Tier I Share Price Target, the Tier II Share Price Target and the Tier III Share Price Target, a “Share Price Target”) for any twenty (20) Trading Days within any consecutive thirty (30) Trading Day period commencing at least 150 days after the Closing Date but prior to the expiration of the Earnout Period, then, subject to the terms and conditions of this Agreement, the Earnout Participants shall be entitled to receive Two Million (2,000,000) Earnout Shares. In the event that any of the Share Price Targets are not satisfied during the applicable period, the Earnout Participants shall not be entitled to receive any of the Earnout Shares with respect to such Share Price Target. For the avoidance of doubt, Earnout Shares shall vest and be issued only in connection with the first achievement of any Share Price Target during the Earnout Period, and the Earnout Participants shall not be entitled to Earnout Shares for any subsequent achievement of the same Share Price Target. The achievement of the Tier II Share Price Target shall be deemed to include the achievement of the Tier I Share Price Target not previously achieved, and, in a segregated escrow account such case, SPAC shall issue the Earnout Shares attributable to each such Share Price Target together (upon which such lower Tier I Share Price Target shall be deemed achieved and disbursed therefrom in accordance with no further Earnout Shares shall become payable upon subsequent achievements of any Share Price Targets previously achieved). The achievement of the terms Tier III Share Price Target shall be deemed to include the achievement of this Section 2.4 the Tier I Share Price Target and the Escrow AgreementTier II Share Price Target not previously achieved, and, in such case, SPAC shall issue the Earnout Shares attributable to each such Share Price Target together (upon which such lower Tier I Share Price Target and Tier II Share Price Target shall each be deemed achieved and no further Earnout Shares shall become payable upon subsequent achievements of any Share Price Targets so achieved).
(b) Except Notwithstanding the foregoing, in the event that during the Earnout Period (i) SPAC is subject to a Change of Control and (ii) the implied consideration per share of SPAC Common Stock pursuant to which SPAC or its stockholders have the right to receive in such Change of Control equals or exceeds the Tier I Share Price Target (or the equivalent fair market value thereof, as otherwise provided determined by the Post-Closing SPAC Board in Section 2.4(cgood faith, in the event of any non-cash consideration) (a “Qualifying Change of Control”), as additional consideration then, subject to the terms and conditions of the Agreement, the Earnout Participant shall be entitled to receive their Earnout Pro Rata Share of all Earnout Shares not previously achieved and for which the Merger, within fifteen related Earnout Shares have not previously vested (15) Business Days after the occurrence achievement of a Qualifying Change of Control or a Share Price Target, a “Triggering Event Event”).
(c) With respect to the achievement of the Share Price Targets, SPAC’s Chief Financial Officer (the “CFO”) shall monitor the VWAP of the SPAC Common Stock on each Trading Day during the Earnout Period, ACAH shall issue or cause and as soon as practicable (and in any event within ten (10) Business Days) after the Escrow Agent to disburse end of each monthly anniversary of the Closing during the Earnout Period, the CFO will prepare and deliver to each of the Seller Representative and the SPAC Representative a written statement (each, an “Earnout Statement”) that sets forth (i) the VWAP of the SPAC Common Stock on each Trading Day for such monthly anniversary period then ended and the preceding monthly period and (ii) whether a Share Price Target has been achieved for any twenty (20) Trading Days within any thirty (30) Trading Day period during such monthly anniversary period. Similarly, as soon as practicable, and in any event within five (5) Business Days after a Triggering Event, the CFO will send an Earnout Statement to each Representative Party indicating that a Triggering Event has occurred, along with the details of such Triggering Event. Each Representative Party will have ten (10) Business Days after its receipt of an Earnout Statement to review it, and each Representative Party and its Representatives on its behalf may make reasonable inquiries to the CFO and related SPAC and Company Equityholderpersonnel and advisors regarding questions concerning or disagreements with the Earnout Statement arising in the course of their review thereof, and SPAC and the Company shall provide reasonable cooperation in connection therewith. If either Representative Party has any objections to an Earnout Statement, such Representative Party shall deliver to SPAC (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within ten (10) Business Days following the date of delivery of each case Earnout Statement, then such Representative Party will have waived its right to contest such Earnout Statement and the calculation of the VWAP of the SPAC Common Stock during the applicable portion of the Earnout Period (and whether a Share Price Target has been achieved) and whether a Triggering Event has occurred as set forth therein. If such written statement is delivered by a Representative Party within such ten (10) Business Day period, then the Representative Parties shall negotiate in good faith to resolve any such objections for a period of ten (10) Business Day thereafter. If the Representative Parties do not reach a final resolution during such ten (10) Business Day period, then upon the written request of either Representative Party, the Representative Parties will refer the dispute to the Independent Expert for final resolution of the dispute in accordance with the procedures set forth in this Section 1.10(c). If a dispute with respect to an Earnout Statement is submitted in accordance with this Section 1.10(c) to the Independent Expert for final resolution, the Parties will follow the procedures set forth in this Section 1.10(c). Each Representative Party agrees to execute, if requested by the Independent Expert, a reasonable engagement letter with respect to the determination to be made by the Independent Expert. All fees and expenses of the Independent Expert, and all other out-of-pocket costs and expenses incurred by a Representative Party in connection with resolving any dispute hereunder before the Independent Expert, will be borne by the SPAC. The Independent Expert will determine only those issues still in dispute with respect to such Earnout Statement as of immediately prior the Independent Expert Notice Date and the Independent Expert’s determination will be based solely upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Expert will be based solely on presentations with respect to such disputed items by the Representative Parties to the Effective Time Independent Expert and not on the Independent Expert’s independent review; provided, that such presentations will be deemed to include any work papers, records, accounts or similar materials delivered to the Independent Expert by a Representative Party in connection with such presentations and any materials delivered to the Independent Expert in response to requests by the Independent Expert. Each Representative Party will use their reasonable efforts to make their respective presentations as promptly as practicable following submission to the Independent Expert of the disputed items, and each Representative Party will be entitled, as part of its presentation, to respond to the presentation of the other Representative Party and any questions and requests of the Independent Expert. In deciding any matter, the Independent Expert will be bound by the provisions of this Agreement, including this Section 1.10. It is the intent of the parties hereto that the activities of the Independent Expert in connection herewith are not (and should not be considered to be or treated as) an arbitration proceeding or similar arbitral process and that no formal arbitration rules should be followed (including rules with respect to procedures and discovery). The Representative Parties will request that the Independent Expert’s determination be made within forty-five (45) days after its engagement, or as soon thereafter as possible, will be set forth in a written statement delivered to the Representative Parties and will be final, conclusive, non-appealable and binding for all purposes hereunder (other than holders for fraud or manifest error).
(d) If there is a final determination in accordance with Section 1.10(c) that the applicable Earnout Participants are entitled to receive Earnout Shares for having achieved a Triggering Event, then SPAC will issue and deliver such shares to the Earnout Participants within ten (10) Business Days thereafter, with each Earnout Participant receiving its Earnout Pro Rata Share of Dissenting such Earnout Shares.
(e) Following the Closing, SPAC and its Subsidiaries, including the Target Companies, will be entitled to operate their respective businesses based upon the business requirements of SPAC and its Subsidiaries. Each of SPAC and its Subsidiaries, including the Target Companies, will be permitted, following the Closing to make changes at its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an impact on the VWAP of the SPAC Common Stock, and the ability of the Earnout Participants to earn the Earnout Shares, if anyand the Earnout Participants will not have any right to claim the loss of all or any portion of any Earnout Shares or other damages as a result of such decisions. Notwithstanding the foregoing, SPAC shall not, and Company Optionsshall cause its Subsidiaries, including the Target Companies, not to, take or omit to take any action that is in bad faith and has the purpose or intent of avoiding, reducing or preventing the achievement or attainment of the Share Price Targets.
(f) (collectively, the “Earnout Pre-Closing Company Securityholders”), the The number of ACAH New Common Earnout Shares (to be issued to any Earnout Participant pursuant to this Section 1.10 shall be rounded down to the nearest whole ACAH New Common Share) number, and such Earnout Participants shall receive in lieu of such fractional shares an amount in cash equal to the product value of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted fractional shares based on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) in no event shall ACAH be required under this Section 2.4 to issue or cause the Escrow Agent to disburse an aggregate number of Earnout Shares and ACAH New Common Shares subject to Earnout RSUs in excess of 30,000,000 ACAH New Common Shares (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) and (ii) at the end VWAP of the Earnout Period, any Earnout Shares that have not been issued by ACAH SPAC Common Stock on Nasdaq or disbursed by the Escrow Agent to Earnout Preprincipal securities exchange or securities market on which the SPAC Common Stock is then traded over the twenty (20) day trading-Closing Company Securityholders in accordance with this Section 2.4 shall be released to period immediately preceding the Company by date on which the Escrow Agent and cancelled or disposed of by the Company in the Company’s sole discretion and the Earnout Pre-Closing Company Securityholders shall have no further right to receive any portion thereof. To the extent that any portion payment of the Earnout Shares issued to a Company Equityholder relates to Exchanged Restricted Shares that remain unvested as is triggered.
(g) Without duplication of the provisions contained in the definition of the term “Earnout Shares”, if, between the Closing and the date of issuance of such any Earnout SharesShares under this Section 1.10, the outstanding shares of SPAC Common Stock shall have been changed into a different number of shares or a different class, in either case, by reason of any stock dividend, change to capitalization, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event shall have occurred, then such Earnout Shares shall any number, value (including dollar value) or amount contained herein which is based upon the number of shares of SPAC Common Stock, will be subject appropriately adjusted to provide to the Earnout Participants and SPAC the same vesting economic effect as contemplated by this Agreement; provided, however, that this Section 1.10(g) shall not (i) be construed to permit SPAC or the Company to take any action with respect to their respective Equity Securities that is prohibited by the terms and conditions applicable of this Agreement, or (ii) apply to the corresponding Exchanged Restricted Shares over Domestication or any other transactions expressly contemplated by this Agreement or any Ancillary Document to the remaining vesting schedule of extent consummated in accordance with the terms contemplated by this Agreement and/or such Exchanged Restricted SharesAncillary Document, as applicable.
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