{"component": "clause", "props": {"groups": [{"snippet": "As soon as reasonably practicable, the Company shall cause its auditors to prepare an audited balance sheet and income statement for the Company as of and for the year ended December 31, 1998 in accordance with \u2587\u2587\u2587\u2587\u2587\u2587\u2587\u2587 GAAP and shall calculate the Company's Adjusted Net Worth and Net Adjusted Pretax Income and the Initial Merger Consideration on the basis thereof. The Company shall deliver such financial statements and calculations to Lithia. Lithia shall have a period of 15 days after its receipt of such financial statements and calculations to make any objections it may have to the Adjusted Net Worth and Net Adjusted Pretax Income of the Company and Initial Merger Consideration as calculated by the Company. If Lithia does not give notice of objections within that period, the Adjusted Net Worth, Net Adjusted Pretax Income and Initial Merger Consideration so calculated shall be final. If Lithia does give notice of objections within that time, and Lithia and the Company are unable to resolve the matter by agreement, either side may submit the matter to PricewaterhouseCoopers LLP or another independent accounting firm selected by the Shareholders and Lithia for resolution. The decision of that accounting firm shall be binding on the parties.", "snippet_links": [{"key": "the-company-shall", "type": "clause", "offset": [35, 52]}, {"key": "audited-balance-sheet", "type": "clause", "offset": [86, 107]}, {"key": "income-statement", "type": "clause", "offset": [112, 128]}, {"key": "for-the-company", "type": "clause", "offset": [129, 144]}, {"key": "the-year", "type": "definition", "offset": [159, 167]}, {"key": "in-accordance-with", "type": "definition", "offset": [192, 210]}, {"key": "calculate-the", "type": "clause", "offset": [235, 248]}, {"key": "adjusted-net-worth", "type": "definition", "offset": [259, 277]}, {"key": "pretax-income", "type": "definition", "offset": [295, 308]}, {"key": "the-initial-merger", "type": "clause", "offset": [313, 331]}, {"key": "the-basis", "type": "clause", "offset": [349, 358]}, {"key": "financial-statements", "type": "clause", "offset": [399, 419]}, {"key": "period-of", "type": "definition", "offset": [468, 477]}, {"key": "days-after", "type": "definition", "offset": [481, 491]}, {"key": "receipt-of", "type": "clause", "offset": [496, 506]}, {"key": "of-the-company", "type": "clause", "offset": [642, 656]}, {"key": "by-the-company", "type": "clause", "offset": [704, 718]}, {"key": "notice-of-objections", "type": "definition", "offset": [744, 764]}, {"key": "and-the-company", "type": "clause", "offset": [969, 984]}, {"key": "unable-to-resolve", "type": "clause", "offset": [989, 1006]}, {"key": "by-agreement", "type": "definition", "offset": [1018, 1030]}, {"key": "pricewaterhousecoopers-llp", "type": "clause", "offset": [1069, 1095]}, {"key": "independent-accounting-firm", "type": "definition", "offset": [1107, 1134]}, {"key": "by-the-shareholders", "type": "clause", "offset": [1144, 1163]}, {"key": "the-decision", "type": "clause", "offset": [1191, 1203]}, {"key": "binding-on-the-parties", "type": "clause", "offset": [1237, 1259]}], "size": 7, "samples": [{"hash": "hEiCJuNchiX", "uri": "/contracts/hEiCJuNchiX#initial-merger-consideration", "label": "Agreement and Plan of Reorganization (Lithia Motors Inc)", "score": 18.0, "published": true}, {"hash": "c34E6QWHMbl", "uri": "/contracts/c34E6QWHMbl#initial-merger-consideration", "label": "Agreement and Plan of Reorganization (Lithia Motors Inc)", "score": 18.0, "published": true}, {"hash": "3aivOYCkzDo", "uri": "/contracts/3aivOYCkzDo#initial-merger-consideration", "label": "Agreement and Plan of Reorganization (Lithia Motors Inc)", "score": 18.0, "published": true}], "hash": "29b57eb587454b00c4ad6de383197856", "id": 1}, {"snippet": "Subject to Section 1.11 (Dissenting Shares) and Section 5.6 (Right of Set-Off), Parent shall pay as consideration for the Merger the amounts set forth in this Section 1.8 and Section 1.9.\n(a) At Closing, Parent shall pay One Million Dollars ($1,000,000) (the \u201cInitial Payment\u201d) minus (i) the amount of all Liabilities of the Company (exclusive, however, of the Lease Liabilities and any liabilities set forth on Schedule 1.8(a)) outstanding as of the Closing (including, without limitation, any and all Transaction Expenses) (the \u201cCompany Liabilities\u201d), and (ii) the amount of consideration that would have been payable to Dissenting Stockholders who would be entitled to receive a portion of the Initial Payment if they have perfected their rights as Dissenting Stockholders as of the Closing Date (the Initial Payment as so adjusted, the \u201cInitial Merger Consideration\u201d), which shall be paid by Parent to the Persons and in the amounts as follows: (x) One Hundred Thousand Dollars ($100,000) (the \u201cEscrow Funds\u201d) to the Escrow Agent to be held in escrow to secure any indemnification obligation of the Stockholders under Section 5.2; and (y) the balance of the Initial Merger Consideration to the Payment Agent for distribution in accordance with Schedule 1.8(b) and the terms of the Payment Agreement (any portion of the Initial Merger Consideration in excess of the Escrow Funds payable to the Stockholders is sometimes referred to herein as the \u201cNet Initial Merger Consideration\u201d). Prior to the Closing, the Company shall prepare and deliver to Parent a balance sheet of the Company dated as of the Closing Date which discloses all the Company Liabilities (the \u201cClosing Date Balance Sheet\u201d), a copy of which is attached hereto as Schedule 1.8(c). The Closing Date Balance Sheet shall be prepared in accordance with GAAP (subject to the absence of footnote disclosures and changes resulting from normal year-end adjustments, but including supporting account detail for all balance sheet accounts) and consistent with and using the same methods, procedures, assumptions and adjustments employed on the Latest Balance Sheet.\n(b) The Escrow Funds shall not be distributed until six (6) months after the Effective Time and shall only be distributed in accordance with the terms and conditions of the Escrow Agreement. In the event that Parent shall have timely given a notice of a claim for indemnification pursuant to Article 5, prior to the expiration of such six-month period, the Stockholders\u2019 Representative and the Parent shall endeavor in good faith to determine a reasonable estimate of the maximum amount of such claim and shall instruct the Escrow Agent to deliver any excess amount of Escrow Funds to the Payment Agent for distribution in accordance with the Escrow Agreement.", "snippet_links": [{"key": "subject-to-section", "type": "clause", "offset": [0, 18]}, {"key": "dissenting-shares", "type": "definition", "offset": [25, 42]}, {"key": "section-56", "type": "clause", "offset": [48, 59]}, {"key": "right-of-set", "type": "clause", "offset": [61, 73]}, {"key": "consideration-for-the-merger", "type": "clause", "offset": [100, 128]}, {"key": "at-closing", "type": "clause", "offset": [192, 202]}, {"key": "liabilities-of-the-company", "type": "clause", "offset": [306, 332]}, {"key": "lease-liabilities", "type": "definition", "offset": [361, 378]}, {"key": "on-schedule", "type": "definition", "offset": [409, 420]}, {"key": "without-limitation", "type": "clause", "offset": [471, 489]}, {"key": "transaction-expenses", "type": "clause", "offset": [503, 523]}, {"key": "company-liabilities", "type": "definition", "offset": [531, 550]}, {"key": "amount-of-consideration", "type": "clause", "offset": [567, 590]}, {"key": "payable-to", "type": "definition", "offset": [612, 622]}, {"key": "dissenting-stockholders", "type": "clause", "offset": [623, 646]}, {"key": "to-receive", "type": "definition", "offset": [669, 679]}, {"key": "a-portion", "type": "definition", "offset": [680, 689]}, {"key": "the-initial-payment", "type": "clause", "offset": [693, 712]}, {"key": "as-of-the-closing-date", "type": "clause", "offset": [776, 798]}, {"key": "by-parent", "type": "clause", "offset": [893, 902]}, {"key": "the-persons", "type": "clause", "offset": [906, 917]}, {"key": "escrow-funds", "type": "definition", "offset": [999, 1011]}, {"key": "the-escrow-agent", "type": "definition", "offset": [1017, 1033]}, {"key": "held-in-escrow", "type": "clause", "offset": [1040, 1054]}, {"key": "to-secure", "type": "clause", "offset": [1055, 1064]}, {"key": "of-the-stockholders", "type": "clause", "offset": [1096, 1115]}, {"key": "section-52", "type": "clause", "offset": [1122, 1133]}, {"key": "the-initial-merger", "type": "clause", "offset": [1158, 1176]}, {"key": "payment-agent", "type": "clause", "offset": [1198, 1211]}, {"key": "for-distribution", "type": "clause", "offset": [1212, 1228]}, {"key": "in-accordance-with", "type": "definition", "offset": [1229, 1247]}, {"key": "payment-agreement", "type": "definition", "offset": [1285, 1302]}, {"key": "to-the-stockholders", "type": "definition", "offset": [1390, 1409]}, {"key": "net-initial-merger-consideration", "type": "definition", "offset": [1450, 1482]}, {"key": "prior-to-the-closing", "type": "clause", "offset": [1486, 1506]}, {"key": "the-company-shall", "type": "clause", "offset": [1508, 1525]}, {"key": "to-parent", "type": "definition", "offset": [1546, 1555]}, {"key": "dated-as-of", "type": "definition", "offset": [1587, 1598]}, {"key": "closing-date-balance-sheet", "type": "definition", "offset": [1666, 1692]}, {"key": "a-copy-of", "type": "clause", "offset": [1696, 1705]}, {"key": "be-prepared", "type": "clause", "offset": [1788, 1799]}, {"key": "subject-to-the", "type": "definition", "offset": [1825, 1839]}, {"key": "resulting-from", "type": "definition", "offset": [1884, 1898]}, {"key": "normal-year", "type": "definition", "offset": [1899, 1910]}, {"key": "account-detail", "type": "clause", "offset": [1953, 1967]}, {"key": "consistent-with", "type": "clause", "offset": [2004, 2019]}, {"key": "latest-balance-sheet", "type": "definition", "offset": [2104, 2124]}, {"key": "after-the-effective-time", "type": "clause", "offset": [2193, 2217]}, {"key": "the-escrow-agreement", 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"e3e8561f9a375e135b8039bf45463174", "id": 2}, {"snippet": "(a) The initial aggregate consideration (the \u201cInitial Company Securities Amount\u201d) to be paid in connection with the Merger to the holders of the class A common stock, par value $0.0001 per share, of the Company (the \u201cClass A Common Stock\u201d), the holders of the class B common stock, par value $0.0001 per share, of the Company (the \u201cClass B Common Stock\u201d, and together with the Class A Common Stock, the \u201cCompany Common Stock\u201d), other than shares of Company Common Stock to be cancelled pursuant to Section 2.3(a), the Optionholders (as defined herein) and the Warrantholders (as defined herein), shall be an amount equal to the following (which amount shall be adjusted as provided herein):\n(1) $840,000,000 (the \u201cTotal Consideration\u201d); plus\n(2) the amount of cash and Cash Equivalents of the Company and the subsidiaries of the Company (collectively, the \u201cCompany Subsidiaries\u201d) on the Closing Date; plus\n(3) the amount, if any, by which the Estimated Closing Working Capital is greater than $52,000,000 (the \u201cNet Working Capital Target\u201d); minus\n(4) the amount, if any, by which the Estimated Closing Working Capital is less than the Net Working Capital Target; minus\n(5) the amount of Company Transaction Expenses; minus\n(6) all outstanding Indebtedness of the Company and the Company Subsidiaries on the Closing Date (before taking into account any repayment of Indebtedness on the Closing Date pursuant to the terms hereof), including the following (the \u201cClosing Indebtedness\u201d):\n(i) all outstanding principal and accrued and unpaid interest (but not the outstanding letters of credit issued thereunder (the \u201cLetters of Credit\u201d)) under the credit agreement, dated as of November 5, 2004, by and among D\u2587\u2587\u2587\u2587 Pet Care Company, as borrower, the Company, as guarantor, the lenders from time to time party thereto and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent and collateral agent (the \u201cExisting Credit Agreement\u201d) and any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus\n(ii) all outstanding principal and accrued and unpaid interest under the 9.750% senior subordinated notes due 2007 (the \u201c2007 Notes\u201d) of DPC and any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus\n(iii) all outstanding principal and accrued and unpaid interest under the 10.750% senior notes due 2010 of DPC (the \u201c2010 Notes\u201d and, together with the 2007 Notes, the \u201cNotes\u201d); plus\n(iv) all outstanding principal and accrued and unpaid interest under the 7.250% Ottawa County Finance Authority Industrial Revenue Bonds of DPC (the \u201cMiami Bonds\u201d) and, if the Company fails to obtain the Consent in respect of the Miami Bonds contemplated by Section 5.16 prior to the Closing Date, any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus\n(v) all outstanding principal and accrued and unpaid interest under the 6.25% Oklahoma Development Finance Authority Industrial Development Revenue Bonds of DPC (the \u201cC\u2587\u2587\u2587\u2587\u2587\u2587 \u2587\u2587\u2587\u2587\u2587\u201d and, together with the Miami Bonds, the \u201cBonds\u201d) and, if the Company fails to obtain the Consent in respect of the C\u2587\u2587\u2587\u2587\u2587\u2587 \u2587\u2587\u2587\u2587\u2587 contemplated by Section 5.16 prior to the Closing Date, any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus\n(vi) the liquidation preference and all accrued and unpaid interest or dividends with respect to the 14.25% senior preferred stock (the \u201cDPC Preferred Stock\u201d) of DPC and any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions), to be calculated pursuant to Section 5(c) of the Certificate of Designations and other terms thereof (the \u201cDPC Preferred Stock Redemption Amount\u201d); plus\n(vii) all outstanding principal and accrued and unpaid interest under the loan agreement dated June 14, 2004 between A/S Arovit Petfood and FIH Erhvervsbank A/S (the \u201cFIH Loan Agreement\u201d) and, if the Company fails to obtain the Consent in respect of the FIH Loan Agreement contemplated by Section 5.16 prior to the Closing Date, any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); minus\n(7) the Escrow Amount; minus\n(8) the Reserve Amount; minus\n(9) the Rollover Amount; minus\n(10) $250,000.\n(b) At the Closing, Newco shall, or shall cause the Surviving Corporation to, pay by wire transfer of immediately available funds the following:\n(1) to the Paying Agent, an amount for distribution in accordance with Sections 2.3(b), (c) and (d) and Section 2.5 equal to the Initial Company Securities Amount;\n(2) to the Paying Agent, an amount for distribution in accordance with Section 5.14 equal to the DPC Preferred Stock Redemption Amount (together with the Initial Company Securities Amount, the \u201cInitial Merger Consideration\u201d);\n(3) to Sun Trust Bank (the \u201cEscrow Agent\u201d), an amount equal to the sum of (i) an amount equal to $5,000,000 minus the Rollover Working Capital Adjustment Amount (the \u201cWorking Capital Adjustment Escrow Amount\u201d) and (ii) an amount equal to $15,000,000 minus the Rollover Indemnity Escrow Amount (the \u201cIndemnity Escrow Amount\u201d and, together with the Working Capital Adjustment Escrow Amount, the \u201cEscrow Amount\u201d), in each case to be held for the period provided in, and to be distributed by the Escrow Agent as provided in, Section 8.3 and the terms of an escrow agreement, in form and substance reasonably satisfactory to Newco and the Stockholder Representative, to be entered into at Closing by the Surviving Corporation, the Escrow Agent and the Stockholder Representative (the \u201cEscrow Agreement\u201d);\n(4) to a reserve account established and maintained by the Stockholder Representative in connection with the Transactions (the \u201cReserve Account\u201d), an amount equal to $2,000,000 minus the Rollover Reserve Amount (the \u201cReserve Amount\u201d), which shall be held by the Stockholder Representative and used and distributed as specified in Section 2.8(b) and any other documentation or agreements executed and delivered by the holders of Company Securities in connection with the Transactions; and\n(5) to an account established and maintained by the Surviving Corporation on behalf of the holders of Rollover Shares and Rollover Options in connection with the Transactions (the \u201cRollover Account\u201d), the Rollover Working Capital Adjustment Amount, the Rollover Indemnity Escrow Amount and the Rollover Reserve Amount, which shall be held by the Surviving Corporation and used and distributed as specified in Section 2.1(f), Section 2.7(c), Section 2.8(b) and any other documentation or agreements that may be executed and delivered by the holders of Rollover Shares, Rollover Options and Newco or the Surviving Corporation.\n(c) The Initial Company Securities Amount shall be distributed to holders of Company Common Stock, Company Options and Company Warrants (collectively, the \u201cCompany Securities\u201d) by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement; provided, that the Paying Agent shall not deliver to such holder of Company Securities any cash for such holder\u2019s outstanding Company Securities until such holder has delivered to the Paying Agent the appropriate Surrender Forms with respect to such Company Securities; and provided, further, that if a holder has not delivered to the Paying Agent the appropriate Surrender Forms at Closing, the Paying Agent shall hold such amount and not pay such amount to such holder until such Surrender Forms are delivered.\n(d) The DPC Preferred Stock Redemption Amount shall be distributed to holders of the DPC Preferred Stock by the Paying Agent as provided in Section 5.14 and in accordance with the Paying Agent Agreement and the certificate of designations for the DPC Preferred Stock (the \u201cCertificate of Designations\u201d); provided, however, that the Paying Agent shall not deliver to such holder of DPC Preferred Stock any cash for such holder\u2019s outstanding shares of DPC Preferred Stock until such holder has delivered to the Paying Agent the appropriate return notice (as provided in the Certificate of Designations) with respect to such shares of DPC Preferred Stock.\n(e) At the Closing, the Surviving Corporation shall pay the Company Transaction Expenses in the amounts and to the persons specified in the Company Transaction Expense Schedule.\n(f) Any amounts payable to the holders of Company Securities (other than holders of Rollover Shares and Rollover Options) after the Closing (including any Escrow Amount, any Reserve Amount, or any other amounts due and payable to the holders of Company Securities in connection with the Transactions) (collectively, the \u201cAdditional Company Securities Amount\u201d) shall be paid to the Stockholder Representative on behalf of the holders of Company Securities, and thereafter distributed by the Stockholder Representative to the holders of Company Securities in accordance with the terms of this Agreement, the other Transaction Agreements and any other documentation or agreements executed and delivered by the holders of Company Securities in connection with the Transactions. Notwithstanding the foregoing, no holder of Rollover Shares or Rollover Options shall be entitled to any portion of any Additional Company Securities Amount. Any amounts payable to holders of Rollover Shares or Rollover Options after the Closing (including any Rollover Working Capital Adjustment Amount, any Rollover Indemnity Escrow Amount, any Rollover Reserve Amount, or any other amounts due and payable to the holders of Rollover Shares and Rollover Options in connection with the Transactions) (collectively, the \u201cAdditional Rollover Securities Amount\u201d) shall be paid by the Surviving Corporation to the holders of Rollover Shares and Rollover Options in accordance with the terms of this Agreement, the other Transaction Agreements and any other documentation or agreements that may be executed and delivered by the holders of Rollover Shares and Rollover Options and Newco or the Surviving Corporation in connection with the Transactions.", "snippet_links": [{"key": "aggregate-consideration", "type": "definition", "offset": [16, 39]}, {"key": "securities-amount", "type": "definition", "offset": [62, 79]}, {"key": "in-connection-with", 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regulatory hurdles?", "What are the most common legal pitfalls or ambiguities in drafting Initial Merger Consideration clauses?", "How have courts interpreted disputes over Initial Merger Consideration in recent M&A litigation?"], "drafting_tip": "Specify the calculation method and payment timeline to ensure clarity; define adjustment mechanisms to address post-closing changes.", "explanation": "The Initial Merger Consideration clause defines the amount and form of payment that shareholders of the target company will receive at the closing of a merger. Typically, this includes specifying whether the consideration will be in cash, stock, or a combination, and outlines how the value is calculated and distributed among the shareholders. By clearly establishing the baseline terms of payment, this clause ensures all parties understand the immediate financial outcome of the merger and helps prevent disputes over compensation at closing."}, "json": true, "cursor": ""}}