EFTA00995272.pdf

From: Richard Joslin To: jeffrey E. <[email protected]> Subject: FW: Pillsbury fees Date: Mon, 11 Aug 2014 11:38:38 +0000 From: Richard Joslin Sent: Friday, August 08, 2014 5:39 PM To: 'Lakhdhir, David K' Cc: ; Eileen Alexanderson; Subject: RE: Pillsbury fees The amount of legal fees and premium may be sizable. IF we choose to reduce liabilities, then this would mean Artspace would be allocated a portion of the accrued commissions and this would impact the $500K cap. A bit messy all around. So I prefer the reduction of Consideration as it is neatest (and least complicated). From: Lakhdhir, David K [mak° Sent: Friday, August 08, 2014 5:30 PM To: Richard Joslin Cc: ; Eileen Alexanderson; Subject: Re: Pillsbury fees Board meeting is over and I was just on phone with Ron re small issues in contract. Only material issue that I know about is issue below. They keep current cash and are supposed to pay next week's payroll and other expenses through closing. We assume all operating liabilities (but only if specified). If we are worse off than we would have been in a merger where Pillsbury's fees were paid by the shareholders then 4.25 should come down by that amount or we leave seller with some liability that we don't care about for them to discharge. Do you agree? If so do you have a preference? IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. David K. Lakhdhir I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP Alder Castle, 10 Noble Street I London EC2V 7JU, U.K. (Direct Phone) I Direct Fax) Front: Richard Josh fmailto: Sent: Friday, August 08, 2014 10:16 PM To: Lakhdhlr David K Cc: < >• Eileen Alexanderson < >; Subject: RE: Pillsbury fees EFTA00995272 I agree with your analysis. If Artspace had not paid Pillsbury, then other operating liabilities would have been paid. As we are now assuming these liabilities (that otherwise would have been paid before closing), we can either reduce the Consideration or reduce the assumed liabilities. From: Lakhdhir, David K [mailto Sent: Friday, August 08, 2014 5:08 PM To: Richard Joslin Cc: ; Eileen Alexanderson; Subject: Re: Pillsbury fees I don't think I am following this. We aren't buying ArtSpace and under the current draft we aren't assuming any liability to Pillsbury and we aren't taking ArtSpace's cash. So the only issue is whether by paying Pillsbury ArtSpace has less cash to pay others and is thus seeking to foist on us more liabilities than would otherwise be the case. We can reduce purchase price or decline to take all liabilities (such that the Company needs to pay them out of the cash we pay at Closing). I think the economic outcome is equivalent. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. David K. Lakhdhir I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP Alder Castle, 10 Noble Street I London EC2V 7JU, U.K. Direct Phone) I (Direct Fax) From: Richard Josh fmailto: Sent: Friday, August 08, 2014 10:00 PM To: Lakhdhir, David K Cc: Keith Fox <->; Eileen Alexanderson < >; John Murphy Subject: RE: Pillsbury fees The APA currently does not have language regarding purchase price adjustments for the prepaid D&O premium and prepaid Pillsbury fees. Ron is to provide detail on his time for the deal work. To the extent it has been paid by Artspace prior to closing, it will be a purchase price adjustment. To the extent it has not been, it will fall under excluded liability under APA. From: Richard Joslin Sent: Friday, August 08, 2014 3:28 PM To: Eileen Alexanderson Cc: Keith Fox; Lakhdhir, David K Subject: RE: Pillsbury fees Good news — Catherine now understands. Ron will give an itemization of his fees for the deal and it will be a purchase price adjustment EFTA00995273 From: Eileen Alexanderson Sent: Friday, August 08, 2014 3:20 PM To: Richard Joslin Cc: Keith Fox; Lakhdhir, David K Subject: Re: Pillsbury fees Crawl I defer to you Keith. Sent from my iPhone On Aug 8, 2014, at 3:15 PM, "Richard Joslin" < > wrote: Catherine is saying that Pillsbury legal fees relating to our transaction have been paid by ArtSpace and she does not agree on a purchase price adjustment. She does agree that each party pay their own legal fees but only thinks it relates for services after closing. Ballpark deal fees are $135K — could be higher. Richard Joslin CFO Elysium Management LLC 445 Park Ave Ste. 1401 New York, NY 10022 (w) (c) (f) This message is intended only for the use of the Addressee and may contain information that is privileged and confidential. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please erase all copies of the message and its attachments and notify us immediately. EFTA00995274