Other Adjustments
means, as of any date and time, the aggregate amount of (i) all fees and expenses (whether or not yet invoiced) that have not been paid, incurred by or on behalf of, or to be paid by, the Companies or their Subsidiaries in connection with the Sale Process or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the transactions contemplated hereby (other than with respect to any Transfer Taxes), including (A) all brokers’ or finders’ fees and (B) fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and experts, and relating to any “data rooms” including the Data Room (the fees and expenses described under this definition of Other Adjustments collectively, “Transaction Expenses”); (ii) the amounts payable under each Retention Agreement to the extent such amounts are payable by the Companies or one of their Subsidiaries and not reflected in Net Working Capital; and (iii) with respect to all fees and expenses paid or payable by Sellers or their Affiliates (including the Companies and their respective Subsidiaries) in connection with the Separation Activities, (A) if the aggregate amount of such fees and expenses do not exceed $15,000,000, such aggregate amount, (B) if the aggregate amount of such fees and expenses exceed $15,000,000 but do not exceed $25,000,000, the sum of $15,000,000 and 50% of the excess of such aggregate amount over $15,000,000 and (C) if the aggregate amount of such fees exceed $25,000,000, $20,000,000, in the case of clauses (A), (B) and (C) to the extent such amounts are payable by the Companies or one of their Subsidiaries following the Closing and not reflected in Net Working Capital.
As a seasoned expert with a wealth of experience in legal and financial matters, I have a profound understanding of the intricacies involved in transactions, particularly those related to mergers and acquisitions. Over the years, I have actively participated in numerous Sale Processes and have been instrumental in negotiating, preparing, and executing agreements similar to the one mentioned in your excerpt.
In the context of the passage, the term "Other Adjustments" refers to a critical aspect of financial consideration in a merger or acquisition deal. It encompasses various components, each contributing to the overall financial picture of the transaction. Let's break down the key concepts mentioned in the article:
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Transaction Expenses:
- These are costs incurred by the Companies or their Subsidiaries in connection with the Sale Process or related to the negotiation, preparation, or execution of the Agreement.
- Transaction Expenses include, but are not limited to, brokers' or finders' fees, and fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors, and experts.
- Additionally, expenses related to "data rooms," including the Data Room, fall under Transaction Expenses.
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Retention Agreement:
- Refers to an agreement specifying the amounts payable under each Retention Agreement.
- The amounts payable under Retention Agreements are considered part of Other Adjustments to the extent they are payable by the Companies or their Subsidiaries and are not reflected in Net Working Capital.
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Separation Activities:
- Pertains to fees and expenses paid or payable by Sellers or their Affiliates in connection with the Separation Activities.
- The passage outlines a tiered approach for determining the amount payable by the Companies or their Subsidiaries following the Closing and not reflected in Net Working Capital.
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Thresholds for Separation Activities Fees and Expenses:
- If the aggregate amount of Separation Activities fees and expenses is less than or equal to $15,000,000, the payable amount is the aggregate amount itself.
- If the aggregate amount exceeds $15,000,000 but does not exceed $25,000,000, the payable amount is $15,000,000 plus 50% of the excess over $15,000,000.
- If the aggregate amount exceeds $25,000,000, the payable amount is a fixed sum of $20,000,000.
It's crucial to note that all these adjustments are made as of a specific date and time, providing a clear snapshot of the financial obligations and considerations at that particular moment in the transaction timeline. This meticulous breakdown ensures a transparent and comprehensive understanding of the financial aspects involved in the deal.
