- 5 - Offering”) which closes within sixty (60) days of the Closing Date, Read-Rite shall issue to Conner that number of shares of Common Stock $.0001 par value of Read-Rite determined by dividing $27,500,000 (subject to adjustment as provided in Section 2.2) by the per share price to the public in the Initial Public Offering. Any fractional share shall be rounded to the nearest whole share. The Asset Purchase Agreement also provided for an adjustment to the purchase price as follows: 2.2 Adjustment to Purchase Price. The $27,500,000 aggregate consideration described in Section 2.1 shall be subject to adjustment, on a dollar for dollar basis, to the extent that the aggregate net value of the Inventory and Fixed Assets at the Closing, as determined in accordance with this Section 2.2, is greater than or less than $14,000,000. Notwithstanding the foregoing, no adjustment shall be made for an aggregate deviation from $14,000,000 less than or equal to $500,000, and any adjustment shall be made only to the extent that such aggregate net value exceeds $14,500,000 or is less than $13,500,000. To the extent that the Purchase Price after such adjustment exceeds $27,500,000, Read-Rite shall pay such excess amount to Conner in cash on the Closing Date. To the extent that the Purchase Price after such adjustment is less than 27,500,000, the number of shares delivered to Conner shall be appropriately reduced. Ernst and Young appraised the inventory and fixed assets in the amount of $5,266,237. As a result, there was a net downward adjustment to the purchase price from $27,500,000 to $19,266,237. Thus, while it was originally contemplated that Conner Malaysia would exchange its assets for 2,391,304 shares of Read-Rite stock, representing approximately 8.9 percent of Read-Rite’s outstanding shares after the IPO, the actual number of Read-Rite shares that were delivered to Conner Malaysia wasPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011