He independently reviewed the covenants, representations and warranties of the Company but there could still be an issue if those representations (by the Company) were falsified or fraudulent.

If you are buying a bank under these same terms and the bank represents that they have $X in deposits, then it turns out that they actually have $X/2 in deposits are you saying the transaction should also be forced to proceed?

Is it meaningfully different here because X is # real users rather than dollars?

Theres a couple differences here.

First, so far its not an argument that the data is "falsified or fraudulent". Its merely that the data is incorrect. Theres a very big difference, and the 10-Q claims are so measured and non-committal that its very hard to even find anything that could be construed as falsified/fraudulent. The claims themselves even go ahead and say it might not be right, even implying they have a significant likelihood of imprecision due to the methodology employed.

In order for the claims to be falsified/fraudulent, you would have to have actual deliberate lying and coverups to get there. In other words, they found 20% but _intentionally still put 5% even though its a made up metric that they can just move the goal posts on_. It just doesn't make any sense to do that and, in my opinion, is _extremely_ unlikely to be found during discovery.

Second, if the argument being made is that he thinks its higher than 5% _and isnt arguing deliberate fraud_ then the clause I pasted above absolves Twitter because it says Musk has been afforded the opportunity to fact check it and has no reason to debate the accuracy of the claim.

Well based on the termination letter it looks like they are claiming it is deliberate since the number of known-spam accounts (blocked accounts) were not subtracted from the reported total user count.

The notice of termination said that Twitter has violated Section 6.4 and 6.11

> Section 6.4 Access to Information; Confidentiality.

> Upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford to the representatives, officers, directors, employees, agents, attorneys, accountants and financial advisors (“Representatives”) of Parent reasonable access (at Parent’s sole cost and expense), in a manner not disruptive in any material respect to the operations of the business of the Company and its Subsidiaries, during normal business hours and upon reasonable written notice throughout the period commencing on the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, to the properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement;

> Section 6.11 Financing Cooperation.

> (a) The Company shall and shall cause its Subsidiaries to, and shall use its commercially reasonable best efforts to cause each of its Representatives to, at Parent’s sole expense, provide any reasonable cooperation reasonably requested by Parent in writing in connection with (i) the arrangement of the Bank Debt Financing and any other debt financing expressly contemplated by the Bank Debt Commitment Letter...

This argument is saying that Twitter is not holding up it's end of the Merger Agreement by not providing (sufficient/useful) information and not cooperating with debt financing (by not providing information). They give examples like rate limits on developer APIs etc.

So the kernel of the question is: is Twitter providing information to the satisfaction of Merger Agreement?

I don't know the answer to that, but if is "no", would that be grounds for terminating the deal? That seems a bit extreme to me. To me a reasonable ruling would sound something like "Twitter has X days to provide all the information requested and then Musk has to perform the purchase".

Right, but theres a lot of nuance in those sections because they are taken in combination with 5.11 that I posted. In other words, if hes seeking information needed for financing then its fair game. If its to perform "due diligence" or to verify financials for his own edification and/or to build a case for pulling out then thats less kosher.

Its important to keep in mind that until he actually owns Twitter, the current management needs to still operate with an assumption that he may not end up owning Twitter. If they have reason to believe it would harm Twitter financially to give information to him in terms of him using it to undermine them later, or if it would impact business operations today, then they don't need to give it to him under these agreed upon terms.

More broadly I think its important that theres a clear distinction between pre-merger-agreement information requests and post-merger-agreement information requests. An analogy I've made before is that imagine you have 2 offers for your home which you list at $100k. You receive two offers: one is for $100k with no inspection contingency and one is for $100k _with_ an inspection contingency. All else being equal, you will always take the no inspection contingency. Now imagine one is $100k with no inspection, and the other is $500k with an inspection. Some percentage of people will take the $500k offer because they have _paid a sufficient premium for the future uncertainty of consummating the deal_ as well as _the likelihood of renegotiation if anything comes up_. This is extremely relevant to the Musk/Twitter agreement because Pandoras box has already been opened once the agreement goes public. It would be an unfair negotiation to try and _reopen_ negotiation based on things discovered in a _new round_ of "due diligence" analysis. If you wanted that right, you need to pay for it.