the
number of Total Verizon Shares.
At the Effective Time (as defined in the Merger Agreement), all such shares of
Spinco Common Stock shall be converted into the right to receive shares of
Company
25
Common Stock pursuant to, and in accordance with the terms of, the Merger
Agreement, immediately following which the Agent shall distribute by book-entry
transfer in respect of the outstanding shares of Verizon Common Stock held by
(x) holders of record of Verizon Common Stock on the Record Date and (y) persons
who acquired Verizon Common Stock pursuant to the exercise of Record Date
Options, all of the shares of Company Common Stock into which the shares of
Spinco Common Stock that would otherwise be distributed in the Distribution have
been converted pursuant to the Merger.
The Agent shall make cash payments in
lieu of any fractional shares resulting from the conversion of Spinco Common
Stock into Company Common Stock in the Merger pursuant to the terms of the
Merger Agreement.
ARTICLE V
POST CLOSING ADJUSTMENTS
SECTION 5.1
POST-CLOSING ADJUSTMENTS.
(A)
WITHIN 90 DAYS AFTER THE CLOSING DATE,
VERIZON SHALL CAUSE TO BE PREPARED AND DELIVERED TO THE SURVIVING CORPORATION A
STATEMENT DERIVED FROM THE BOOKS AND RECORDS OF VERIZON AND ITS AFFILIATES (THE
"CLOSING STATEMENT"), SETTING FORTH DISTRIBUTION DATE WORKING CAPITAL, INCLUDING
REASONABLE DETAIL REGARDING THE CALCULATION THEREOF.
THE DISTRIBUTION DATE
WORKING CAPITAL SHALL BE CALCULATED IN ACCORDANCE WITH GAAP, CONSISTENTLY
APPLIED, USING THE SAME ACCOUNTING PRINCIPLES, METHODOLOGIES AND POLICIES USED
IN THE PREPARATION OF THE SPINCO AUDITED BALANCE SHEET, PRO FORMA FOR THE
COMPLETION OF THE CONTRIBUTION, AS MODIFIED BY THE PRINCIPLES, METHODOLOGIES AND
POLICIES SET FORTH IN SECTION 5.1 OF THE DISCLOSURE LETTER.
(B)
VERIZON SHALL GIVE THE SURVIVING CORPORATION
AND EACH OF ITS REPRESENTATIVES ACCESS AT ALL REASONABLE TIMES AND ON REASONABLE
ADVANCE NOTICE TO VERIZON'S BOOKS AND RECORDS TO THE EXTENT REASONABLY REQUIRED
TO PERMIT THE SURVIVING CORPORATION TO REVIEW THE CLOSING STATEMENT.
WITHIN 60
DAYS AFTER RECEIPT OF THE CLOSING STATEMENT, SURVIVING CORPORATION SHALL, IN A
WRITTEN NOTICE TO VERIZON, DESCRIBE IN REASONABLE DETAIL ANY PROPOSED
ADJUSTMENTS TO THE ITEMS SET FORTH ON THE CLOSING STATEMENT AND THE REASONS
THEREFOR (IT BEING AGREED THAT THE ONLY PERMITTED REASONS FOR SUCH ADJUSTMENTS
SHALL BE MATHEMATICAL ERROR OR THE FAILURE TO COMPUTE ITEMS SET FORTH THEREIN IN
ACCORDANCE WITH THIS ARTICLE V).
SURVIVING CORPORATION SHALL HAVE THE RIGHT TO
DISCUSS THE CLOSING STATEMENT WITH VERIZON'S ACCOUNTANTS, IT BEING UNDERSTOOD
THAT IN CONNECTION WITH SUCH DISCUSSION, SURVIVING CORPORATION WILL NOT HAVE
ACCESS TO THE WORK PAPERS OF SUCH ACCOUNTANTS.
IF VERIZON SHALL NOT HAVE
RECEIVED A NOTICE OF PROPOSED ADJUSTMENTS (PROVIDED THAT ANY AND ALL PROPOSED
ADJUSTMENTS TO THE CALCULATION OF
26
DISTRIBUTION DATE WORKING CAPITAL MUST IN THE AGGREGATE EXCEED ONE HUNDRED
THOUSAND DOLLARS ($100,000) OR MORE) WITHIN SUCH 60 DAY PERIOD, SURVIVING
CORPORATION WILL BE DEEMED TO HAVE ACCEPTED IRREVOCABLY SUCH CLOSING STATEMENT.
(C)
VERIZON AND SURVIVING CORPORATION SHALL
NEGOTIATE IN GOOD FAITH TO RESOLVE ANY DISPUTES OVER ANY