Adjustment to the Purchase Price. (a) The Buyer shall review the Proposed Closing Statement within forty-five (45) days following Closing to determine if any adjustments to the Proposed Closing Statement should be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees with the Definitive Closing Statement as adjusted, the Company shall notify Buyer in writing of such disagreement (a “Dispute Notice”) within fifteen (15) days after receipt of the Proposed Closing Statement, which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with the preparation of the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjusted. (b) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Period, then any remaining disputes (and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expenses. (c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (Zayo Group LLC)
Adjustment to the Purchase Price. (a1) The Buyer As promptly as practical, but in no event more than 75 days after the Closing, the Surviving Corporation shall review prepare and deliver to Seller a calculation of Working Capital of the Proposed Closing Statement within forty-five Companies (45"Preliminary Working Capital Statement") days following Closing to determine if any adjustments as of the Closing. Working Capital shall mean current assets less current liabilities, subject to the Proposed Closing adjustments set forth on Schedule 1.2. The Preliminary Working Capital Statement should will be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees prepared on a basis consistent with the Definitive Closing Statement manner in which the Financial Statements were prepared. Schedule 1.2(a) sets forth an example (based on financial information dated as adjustedof February 28, 1999) of how the Company preliminary working capital statement shall notify Buyer in writing of such disagreement be prepared.
(a “Dispute Notice”2) within fifteen (15) Within thirty days after receipt of the Proposed Closing Preliminary Working Capital Statement, Seller shall give written notice of any objections to the Preliminary Working Capital Statement (which Dispute Notice shall specify must describe in reasonable detail the basis of such objection) (the "Objection Letter"). Seller and its accountants or auditors shall be given access to the Surviving Corporation's working papers and such other information, including without limitation, a review of and participation in, any inventory count, which were used in preparation of the Preliminary Working Capital Statement as reasonably necessary. If no such notice is given with respect to any item, then such items shall be deemed agreed upon and amounts in disputedeemed final and conclusive for purposes of determining the "Final Working Capital Statement."
(3) As soon as practicable but not later than fifteen days after the receipt of the Objection Letter, the parties shall attempt to resolve any disputed items. If the Company does parties are able to resolve all such disputed items, the Preliminary Working Capital Statement so agreed upon shall become the "Final Working Capital Statement." If such objections cannot deliver be resolved between the Surviving Corporation and Seller within the 15 days after delivery of the Objection Letter by Seller, the question or questions in dispute shall then be submitted, as soon as practicable, to a Dispute Notice within mutually acceptable firm of independent public accountants of recognized standing that is not rendering (and has not rendered in the past two years) audit services to either Buyer or Seller, the decision of which as to such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which question or questions in dispute shall be final, conclusive final and binding upon Seller and the Surviving Corporation.
(4) If the Final Working Capital Statement, after the resolution of all Partiesdisputes, indicates that the amount of Working Capital of the Companies was greater than $873,915, the Surviving Corporation shall promptly pay to Seller, in immediately available funds, with interest at 7% per annum, the amount of such excess. For If the Final Working Capital Statement, after the resolution of all disputes, indicates that the amount of Working Capital of the Companies was less than $873,915, Seller shall promptly pay to the Surviving Corporation, in immediately available funds, with interest at 7% per annum, the amount of such deficiency.
(5) Each party shall bear its own expenses in connection with preparation and analysis of the Preliminary and Final Working Capital Statement. The fees of any independent accounting firm appointed pursuant to Section 1.2(d) shall be borne equally by Seller and the Surviving Corporation; provided, however, that all costs shall be borne by a period of fifteen (15) days following Company’s receipt party if more than 50% of a Dispute Notice dispute is resolved against them.
(6) At or before submission to Seller of the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Preliminary Working Capital Statement, Buyer shall provide reasonable access submit to Seller a schedule setting forth any indebtedness, including capital lease obligations, of the Companies not included on the Preliminary Working Capital Statement (the "Closing Debt"). Subject to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with the preparation of the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjusted.
(b) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Period, then any remaining disputes (and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in same dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that resolution mechanisms set forth in a Dispute Notice as provided herein Sections 1.2(b) through (d) above, Seller shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by promptly remit to Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues funds in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate an amount of the disputed items submitted equal to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensesDebt.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
Appears in 1 contract
Adjustment to the Purchase Price. (a1) The Buyer Closing Date Financial Statements prepared in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements shall review be delivered by the Proposed Closing Statement Principal Vendors to the Purchaser within forty-five (45) days following the Closing Date. In connection therewith, the Purchaser shall co-operate with the Principal Vendors and their representatives in order to determine if any adjustments provide access to documentation necessary to finalize the Proposed Closing Statement should Date Financial Statements. The fees and disbursements for the preparation of the Closing Date Financial Statements shall be made for any differences between paid by the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer Company.
(2) The Purchaser shall prepare any proposed adjustments along with such information as is necessary for Company be entitled to review all aspects of the proposed adjustments (preparation of the “Definitive Closing Statement”)Date Financial Statements. If The Closing Date Financial Statements prepared and delivered as aforesaid shall be final and binding upon the Company disagrees with parties for all purposes hereof, unless the Definitive Closing Statement as adjusted, Purchaser notifies the Company shall notify Buyer Principal Vendors in writing of such disagreement that it disputes any amounts shown therein within ten (a “Dispute Notice”10) within fifteen (15) business days after receipt by the Purchaser of the Proposed Closing StatementDate Financial Statements.
(3) In the event that the Purchaser disputes any amount shown in the Closing Date Financial Statements, the parties will work expeditiously and in good faith in an attempt to resolve such disputes within a further period of ten (10) business days after the date of notification by the Purchaser to the Principal Vendors of such disputes, failing resolution of which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which disputes shall be finalsubmitted for determination to an independent national firm of chartered accountants mutually agreed to by the Principal Vendors and the Purchaser (and, conclusive failing such agreement between the Principal Vendors and the Purchaser within a further period of five (5) business days, such independent national firm of chartered accountants shall be selected by two such national firms, one nominated by each of the Principal Vendors and the Purchaser). The determination of such third firm of chartered accountants shall be final and binding upon all Partiesthe parties and not subject to appeal. For a The third firm of chartered accountants shall be deemed to be acting as experts and not as arbitrators. The costs and expenses of such third firm of chartered accountants shall be borne equally by the Principal Vendors and the Purchaser. The Principal Vendors and the Purchaser shall each bear their own costs in presenting their cases to such third firm of chartered accountants.
(4) Within two (2) Business Days following the ten (10) Business Day period referred to in Section 2.4(2) or the resolution of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”any dispute in accordance with Section 2.4(3), Representatives the amount held in Escrow pursuant to Section 2.3(e) shall be released to the Vendors and/or the Purchaser, as the case may be, in the manner hereinafter described. In the event that the total of Buyer and (i) the cash position of the Company at Closing, as reflected on the Closing Date Financial Statements (which for the purposes hereof shall use their reasonable best efforts include any advances made by the Company to resolve its employees/shareholders to acquire shares of the Company which advances shall be repaid forthwith after Closing), and (ii) the difference between (x) the trade accounts receivable of the Company, determined in accordance with Canadian GAAP (which, for greater certainty, shall not include any income and R&D tax credits or refunds and (y) the total liabilities of the Company reflected on the Closing Date Financial Statements (which, for greater certainty, shall include all disagreements with respect trade payables, all accruals and all short and long term debt but which shall expressly exclude any debt resulting from the payment to the Definitive Closing Statement set forth Executives of an amount not exceeding $2,700,000 in such Dispute Notice through satisfaction of the joint consultation of Buyer Stock Appreciation Rights Plan and any future income tax liabilities related to R&D tax credits, property, plant, equipment and intangible assets used in the Company. For purposes of evaluating the adjustments Business does not exceed $2,000,000.00, after all payments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used Executives in connection with the preparation release of any and all claims they may have against the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjusted.
(b) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute PeriodCompany, then any remaining disputes (and only such remaining disputes) the Purchase Price shall be resolved reduced by an independent regional or national accounting firm selected $.3635 for each $1.00 by which the Company and Buyer. If Company and Buyer shall not be able to agree on the selection total of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes (i) plus (ii) of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(sparagraph (4) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party$2,000,000.00. The Accounting Firm shall have no authority to resolve any other dispute entire amount held in escrow, or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into amount held in connection therewith. The costs, fees and expenses of escrow less the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For examplereduction of the Purchase Price, as the case may be, shall be released to the Vendors, on a pro rata basis, and an amount equal to the reduction of the Purchase Price, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000any, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expenses.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed remitted to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all PartiesPurchaser.
Appears in 1 contract
Adjustment to the Purchase Price. (a) The Buyer shall review the Proposed Closing Statement within forty-No later than five (45) days following Closing to determine if any adjustments Business Days prior to the Proposed date on which the Closing Statement should be made for any differences between is scheduled to occur, Sellers’ Representative (on behalf of Sellers) shall deliver to Purchaser a good faith estimate of the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments Balance Sheet (the “Definitive Estimated Closing Statement”). If the Company disagrees with the Definitive Closing Statement as adjusted, the Company shall notify Buyer in writing of such disagreement (a “Dispute NoticeBalance Sheet”) within fifteen (15) days after receipt of the Proposed Closing Statementprepared on a consolidated basis, which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer accordance with GAAP and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer policies, practices and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or methodologies used in connection with the preparation of the Definitive Balance Sheet and in the format used for the reference computations attached as Annex A hereto (the “Reference Computations”), and, based on such Estimated Closing StatementBalance Sheet, Sellers’ representative shall also provide Purchaser with the following, each prepared by Sellers’ Representative in good faith:
(i) an estimate of the Company’s Working Capital as of the Closing Date (the “Estimated Working Capital.”)
(ii) an estimate of the Company’s Cash as of the Closing Date (the “Estimated Cash”.)
(iii) an estimate of the amount of regulatory capital (including Cash) required to be maintained as of the Closing Date by MG Trust Company, LLC (“MG Trust”) and otherwise shall reasonably cooperate and assist MSCS Financial Services, LLC (“MSCS Financial”) ( the Company and its accountants and other Representatives to analyze “Estimated Regulatory Capital”).
(iv) an estimate of the Definitive Trust Net Capital Assets as of the Closing Statement Date (the “Estimated Trust Net Capital Assets”).
(v) an estimate of the Broker Net Capital Assets as adjustedof the Closing Date (the “Estimated Broker Net Capital Assets”).
(b) If Copies of all workpapers and other documents used in the calculation of Estimated Working Capital, Estimated Regulatory Capital, Estimated Trust Net Capital Assets and Estimated Broker Net Capital Assets as Purchaser may reasonably request in order for Purchaser to confirm to its reasonable satisfaction, the accuracy of Sellers Representative’s estimates under Section 2.3(a) and determine the adjustments, if any, to be made to the Purchase Price hereunder.
(c) The Purchase Price payable as of the Closing Date shall be adjusted as follows:
(i) increased by the amount by which Estimated Working Capital exceeds Target Working Capital, or decreased by the amount by which Estimated Working Capital is less than Target Working Capital;
(ii) increased by the amount of Estimated Cash;
(iii) decreased by the amount of Estimated Regulatory Capital;
(iv) increased by any surplus or decreased by any deficit of Estimated Trust Net Capital Assets; and
(v) increased by any surplus or decreased by any deficit of Estimated Broker Net Capital Assets.
(d) As promptly as practicable, but no later than 60 days after the Closing Date, Purchaser will cause to be prepared and delivered to Sellers’ Representative a consolidated balance sheet of Company and Company Subsidiaries as of the Buyer are unable to resolve all close of their disputes business on the Closing Date (which shall reflect fully the effectuation of the transactions contemplated by this Agreement) prepared in accordance with respect to GAAP and the Definitive policies, practices and methodologies used in connection with the preparation of the Balance Sheet and provided in the format used for the Reference Computations (the “Closing Statement within Balance Sheet”). The Closing Balance Sheet will be accompanied by a certificate of Purchaser specifying that it was prepared in accordance with the Dispute Periodprovisions of this Section and setting forth Purchaser’s calculation of Closing Date Cash, then any remaining disputes (Closing Working Capital, Closing Regulatory Capital, Closing Trust Net Capital Assets and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and BuyerClosing Broker Net Capital Assets. If Company and Buyer shall not be able to agree on the selection Sellers’ Representative disagrees with Purchaser’s calculation of an accounting firmClosing Date Cash, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountantClosing Working Capital, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination Closing Regulatory Capital, Closing Trust Net Capital Assets or Closing Broker Net Capital Assets, Sellers’ Representative may, within 45 days after Purchaser’s delivery of the applicable dispute(s) within thirty (30) days after referral of the matter Closing Balance Sheet, deliver a notice to the Accounting FirmPurchaser disagreeing with such calculation(s), which determination shall be in writing and shall set setting forth, in reasonable detail, the basis therefor. The determination Sellers’ Representative’s grounds for such disagreement, and specifying Sellers’ Representative’s calculation of the Accounting Firm such amount.
(e) If a notice of disagreement shall be conclusive duly delivered pursuant to the preceding subsection, the Purchaser and Sellers’ Representative shall, during the 15 days following such delivery, use their reasonable best efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Date Cash, Closing Working Capital, Closing Regulatory Capital, Closing Trust Net Capital Assets and Closing Broker Net Capital Assets (as the case may be), which amount shall not be less than the amount thereof shown in Purchaser’s calculations delivered pursuant to Section 2.3(c) nor more than the amount thereof shown in Sellers’ calculation delivered pursuant to Section 2.3(d). If Purchaser and Sellers’ Representative are unable to reach such agreement during such period, they shall mutually agree upon independent accountants of nationally recognized standing reasonably satisfactory to Purchaser and Sellers’ Representative (who shall not have any material relationship with the Company, Purchaser or Sellers), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Date Cash, Closing Working Capital, Closing Regulatory Capital, Closing Trust Net Capital Assets and Closing Broker Net Capital Assets (as the case may be). In making such calculation, such independent accountants shall consider only those items or amounts in the Closing Balance Sheet or Purchaser’s calculation of Closing Date Cash, Closing Working Capital, Closing Regulatory Capital, Closing Trust Net Capital Assets or Closing Broker Net Capital Assets (as the case may be) as to which Sellers have disagreed. Such independent accountants shall deliver to Purchaser and Sellers’ Representative, as promptly as practicable, a report setting forth such calculation. Such report shall be final and binding upon Purchaser and Sellers. The cost of such review and report shall be borne equally by Purchaser, on the Partiesone hand, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determineSellers, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expenseshand.
(cf) Purchaser and Sellers’ Representative agree that they will, and agree to cause their respective independent accountants and each of Company and Buyer shall revise Company Subsidiaries to, cooperate and assist in the Definitive preparation of the Closing Statement Balance Sheet and the calculation of Closing Date Cash, Closing Working Capital, Closing Regulatory Capital, Closing Trust Net Capital Assets and Closing Broker Net Capital Assets and in the Reconciling Adjustment Amount as appropriate to reflect the resolution conduct of the objections audits and reviews referred to in this Section 2.3.
(as agreed upon i) If Estimated Cash exceeds Final Cash, the Purchase Price shall be decreased by Buyer the amount of such excess, and if Final Cash exceeds Estimated Cash, the Purchase Price shall be increased by the amount of such excess.
(ii) If Estimated Working Capital exceeds Final Working Capital, the Purchase Price shall be decreased by the amount of such excess, and if Final Working Capital exceeds Estimated Working Capital, the Purchase Price shall be increased by the amount of such excess.
(iii) If Estimated Regulatory Capital exceeds Final Regulatory Capital, the Purchase Price shall be increased by the amount of such excess, and if Final Regulatory Capital exceeds Estimated Regulatory Capital, the Purchase Price shall be decreased by the amount of such excess.
(iv) If Estimated Trust Net Capital Assets exceeds Final Trust Net Capital Assets, the Purchase Price shall be decreased by the amount of such excess, and if Final Trust Net Capital Assets exceeds Estimated Trust Net Capital Assets, the Purchase Price shall be increased by the amount of such excess.
(v) If Estimated Broker Net Capital Assets exceeds Final Broker Net Capital Assets, the Purchase Price shall be decreased by the amount of such excess, and if Final Broker Net Capital Assets exceeds Estimated Broker Net Capital Assets, the Purchase Price shall be increased by the amount of such excess.
(h) Upon the completion of all of the determinations set forth in Section 2.3(g), the increases and/or decreases to the Purchase Price resulting therefrom will be netted out and (i) any resulting payment to Sellers so required shall be directed by Sellers’ Representative to be made by Purchaser to the Paying Agent at a mutually convenient place within 10 days after such completion, and (ii) any resulting payment to Purchaser so required shall be made from the Escrow Amount to Purchaser at a mutually convenient place within 10 days after such completion, in either case by wire transfer of immediately available funds.
(i) Company owns 4,000,000 shares of Series C Convertible Preferred Stock of Prima Capital Holding, Inc. (“Prima”) and certain employees of Prima (the “Prima Minority Shareholders”) own an aggregate of 2,423,232 shares of Common Stock of Prima and options to purchase 837,500 shares of Common Stock of Prima. Company and the Prima Minority Shareholders are parties to a Shareholders’ Agreement dated as of May 22, 2007 (the “Prima Agreement”) governing the capital stock of Prima, a copy of which has been furnished to Purchaser. At Closing, Purchaser shall acquire the Company or as determined Common Stock subject to the equity interests in Prima held by the Accounting Firm) Prima Minority Shareholders and deliver it the terms and conditions of the Prima Agreement, and no adjustment to each party within five (5) Business Days after the resolution Purchase Price may be based on or arise out of such objections. Such revised statement equity interest or the Prima Agreement.
(j) For purposes of this Section 2.3, the following terms shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.defined as set forth below:
Appears in 1 contract
Sources: Stock Purchase Agreement (Broadridge Financial Solutions, Inc.)
Adjustment to the Purchase Price. (a) The Buyer As promptly as practical, but in no event more than 75 days after the Closing, the Surviving Corporation shall review prepare and deliver to Seller a calculation of Working Capital of the Proposed Closing Statement within forty-five Companies (45"Preliminary Working Capital Statement") days following Closing to determine if any adjustments as of the Closing. Working Capital shall mean current assets less current liabilities, subject to the Proposed Closing adjustments set forth on Schedule 1.2. The Preliminary Working Capital Statement should will be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees prepared on a basis consistent with the Definitive Closing Statement manner in which the Financial Statements were prepared. Schedule 1.2(a) sets forth an example (based on financial information dated as adjustedof February 28, 1999) of how the Company preliminary working capital statement shall notify Buyer in writing of such disagreement be prepared.
(a “Dispute Notice”b) within fifteen (15) Within thirty days after receipt of the Proposed Closing Preliminary Working Capital Statement, Seller shall give written notice of any objections to the Preliminary Working Capital Statement (which Dispute Notice shall specify must describe in reasonable detail the basis of such objection) (the "Objection Letter"). Seller and its accountants or auditors shall be given access to the Surviving Corporation's working papers and such other information, including without limitation, a review of and participation in, any inventory count, which were used in preparation of the Preliminary Working Capital Statement as reasonably necessary. If no such notice is given with respect to any item, then such items shall be deemed agreed upon and amounts in disputedeemed final and conclusive for purposes of determining the "Final Working Capital Statement."
(c) As soon as practicable but not later than fifteen days after the receipt of the Objection Letter, the parties shall attempt to resolve any disputed items. If the Company does parties are able to resolve all such disputed items, the Preliminary Working Capital Statement so agreed upon shall become the "Final Working Capital Statement." If such objections cannot deliver be resolved between the Surviving Corporation and Seller within the 15 days after delivery of the Objection Letter by Seller, the question or questions in dispute shall then be submitted, as soon as practicable, to a Dispute Notice within mutually acceptable firm of independent public accountants of recognized standing that is not rendering (and has not rendered in the past two years) audit services to either Buyer or Seller, the decision of which as to such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which question or questions in dispute shall be final, conclusive final and binding upon Seller and the Surviving Corporation.
(d) If the Final Working Capital Statement, after the resolution of all Partiesdisputes, indicates that the amount of Working Capital of the Companies was greater than $873,915, the Surviving Corporation shall promptly pay to Seller, in immediately available funds, with interest at 7% per annum, the amount of such excess. For If the Final Working Capital Statement, after the resolution of all disputes, indicates that the amount of Working Capital of the Companies was less than $873,915, Seller shall promptly pay to the Surviving Corporation, in immediately available funds, with interest at 7% per annum, the amount of such deficiency.
(e) Each party shall bear its own expenses in connection with preparation and analysis of the Preliminary and Final Working Capital Statement. The fees of any independent accounting firm appointed pursuant to Section 1.2(d) shall be borne equally by Seller and the Surviving Corporation; provided, however, that all costs shall be borne by a period of fifteen (15) days following Company’s receipt party if more than 50% of a Dispute Notice dispute is resolved against them.
(f) At or before submission to Seller of the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Preliminary Working Capital Statement, Buyer shall provide reasonable access submit to Seller a schedule setting forth any indebtedness, including capital lease obligations, of the Companies not included on the Preliminary Working Capital Statement (the "Closing Debt"). Subject to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with the preparation of the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjusted.
(b) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Period, then any remaining disputes (and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in same dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that resolution mechanisms set forth in a Dispute Notice as provided herein Sections 1.2(b) through (d) above, Seller shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by promptly remit to Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues funds in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate an amount of the disputed items submitted equal to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensesDebt.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
Appears in 1 contract
Adjustment to the Purchase Price. (a1) The Buyer As promptly as practical, but in no event more than 75 days after the Closing, the Surviving Corporation shall review prepare and deliver to Seller a calculation of Working Capital of the Proposed Closing Statement within forty-five Companies (45"Preliminary Working Capital Statement") days following Closing to determine if any adjustments as of the Closing. Working Capital shall mean current assets less current liabilities, subject to the Proposed Closing adjustments set forth on Schedule 1.2. The Preliminary Working Capital Statement should will be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees prepared on a basis consistent with the Definitive Closing Statement as adjusted, manner in which the Company shall notify Buyer in writing of such disagreement Financial Statements were prepared. Schedule 1.2(a) sets forth an
(a “Dispute Notice”2) within fifteen (15) Within thirty days after receipt of the Proposed Closing Preliminary Working Capital Statement, Seller shall give written notice of any objections to the Preliminary Working Capital Statement (which Dispute Notice shall specify must describe in reasonable detail the basis of such objection) (the "Objection Letter"). Seller and its accountants or auditors shall be given access to the Surviving Corporation's working papers and such other information, including without limitation, a review of and participation in, any inventory count, which were used in preparation of the Preliminary Working Capital Statement as reasonably necessary. If no such notice is given with respect to any item, then such items shall be deemed agreed upon and amounts in disputedeemed final and conclusive for purposes of determining the "Final Working Capital Statement."
(1) As soon as practicable but not later than fifteen days after the receipt of the Objection Letter, the parties shall attempt to resolve any disputed items. If the Company does parties are able to resolve all such disputed items, the Preliminary Working Capital Statement so agreed upon shall become the "Final Working Capital Statement." If such objections cannot deliver be resolved between the Surviving Corporation and Seller within the 15 days after delivery of the Objection Letter by Seller, the question or questions in dispute shall then be submitted, as soon as practicable, to a Dispute Notice within mutually acceptable firm of independent public accountants of recognized standing that is not rendering (and has not rendered in the past two years) audit services to either Buyer or Seller, the decision of which as to such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which question or questions in dispute shall be final, conclusive final and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer Seller and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with the preparation of the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjustedSurviving Corporation.
(b) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Period, then any remaining disputes (and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expenses.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
Appears in 1 contract
Adjustment to the Purchase Price. (a) The Buyer shall review and Sellers agree that -------------------------------- Article II, along with Section 10.06, establishes the Proposed Closing Statement within forty-five (45) days following Closing Assets being sold to determine if any adjustments Buyer by Sellers, and the value and items of various components thereof to be received by Buyer at closing. All of the Assets listed on the Schedules prepared incident to the Proposed Closing Statement should execution of this Agreement are to be made conveyed to Buyer at closing, and except for any differences between Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables, changes in which are specifically addressed and provided for hereinafter in this Section 4.03, Buyer and Sellers acknowledge that the estimated amounts contained Assets to be conveyed to Buyer by Sellers are not expected to change from and after the date of execution of this Agreement and prior to the closing date. Nevertheless, to the extent the Assets (other than Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables) conveyed to Buyer by Sellers at closing do not include all of the Assets reflected on such schedules, the purchase price shall be reduced if such missing Assets are material, with a corresponding reduction in the Proposed Closing Statement and actual amounts as determined by cash due from Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees with the Definitive Closing Statement as adjusted, the Company shall notify Buyer in writing of such disagreement (a “Dispute Notice”) within fifteen (15) days after receipt of the Proposed Closing Statement, which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Companyat closing. For purposes of evaluating this Agreement, such missing assets shall be deemed material if their replacement cost in the adjustments aggregate to Buyer is greater than $2,000. To the extent any such missing assets have been replaced with other assets purchased by Seller subsequent to the Proposed Closing Statementdate of execution of this Agreement, Buyer the aggregate cost of such purchased assets shall provide reasonable access be netted against the aggregate replacement costs of the missing assets in determining whether a reduction of the purchase price is in order. Provided, however, to the Company and its accountants and other Representativesextent the aggregate cost of such purchased assets exceeds the aggregate replacement costs of any missing assets, there shall be no upward adjustment or increase in the purchase price or cash due from Buyer at closing. Other assets owned by Controls or located at the Premises and not previously included on Schedules attached to this Agreement shall not be the basis for any claim by Sellers that assets have been purchased or that there has not been a material change in any assets to be conveyed by Sellers to Buyer’s offices . Provided further, however, that in Las Vegasthe event the purchase price and cash due at closing from Buyer is otherwise to be reduced pursuant to the provisions of this paragraph, Nevadaand the net asset value of the Cash Equivalents, upon advance notice Inventory, Accounts Receivable and during normal business hoursAccounts Payables at the closing date exceeds the amount of $150,000, the amount by which the net asset value of Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables at the closing date exceeds the amount of $150,000 may be used to offset any financial information created such reduction in the purchase price otherwise due as a result of the provisions of this paragraph, but again, there shall not be any upward adjustment in the purchase price or used cash due from the Buyer at closing pursuant to the provisions of this paragraph on account of any reason whatsoever. Buyer and Sellers agree that the amount of Cash Equivalents, Inventory, Accounts Receivable and Accounts Payables are subject to change from and after the date of execution of this Agreement and prior to the closing date in connection with the preparation operation of the Definitive Closing StatementBusiness in the ordinary course. Buyer and Sellers have entered into this Agreement based on representations and agreements of the Sellers that the net asset value of the Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables at the closing date shall not be less than the amount of $150,000, which amount represents the approximate net asset value of the Cash Equivalents, Inventory, Accounts Receivable and Accounts Payables of Controls as of January 31, 1997. In accordance with the provisions of Section 4.02, Sellers shall deliver to Buyer updated schedules of the Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables as of the closing date. Buyer and Sellers shall further conduct a physical count of the Inventory and costing thereof as of the night prior to the closing date. All such Inventory shall be valued at its cost to Sellers, net of any applicable discounts, and otherwise the Inventory to be counted as of the closing date shall reasonably cooperate and assist include only those categories of Inventory included on the Company and its accountants and other Representatives Inventory previously provided by Sellers to analyze Buyer attached hereto as Schedule 2.01(a). Further, the Definitive Closing Statement as adjusted.
(b) If Company value of the Inventory shall only be increased by purchases of Inventory by Controls subsequent to January 31, 1997, and the value of the Inventory shall not be increased by adding other personal property or parts thereto owned by Controls or located on the Premises as of January 31, 1997 which is not included on the list of Inventory attached as Schedule 2.01(a). To the extent the net asset value of the Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables is less than $150,000 as of the closing date, Buyer shall be entitled to a dollar for dollar reduction in the purchase price and cash due at closing to the full extent the net asset value of the Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables at closing is less than $150,000. By way of example and not in limitation, if the net asset value of Cash Equivalents, Inventory, Accounts Receivables and Accounts Payable on the closing date is $145,000, the purchase price and cash otherwise due from the Buyer at closing shall be reduced by the amount of $5,000. Under no circumstances shall there be any upward adjustment in the purchase price or cash due from the Buyer at closing should the net asset value of the Cash Equivalents, Inventory, Accounts Receivables and Accounts Payables increase above the amounts hereinabove indicated on account of any reason whatsoever. Further, except as hereinafter specifically provided in this paragraph, to the extent Controls or Systems is able to negotiate lesser amounts creditors whose liabilities are unable to resolve all be assumed by Buyer incident to this Agreement are willing to accept in full or partial payment of their disputes with respect claims, the benefit of all such reductions shall inure solely to the Definitive Closing Statement within benefit of the Dispute PeriodBuyer, then any remaining disputes and the face amount of such debt or payable owed to such creditor(s) (and only not the amount Controls or Systems has negotiated to pay such remaining disputescreditor in full or partial discharge of such debt or payable) shall be resolved by an independent regional utilized in determining the net asset value of the Cash Equivalents, Inventory, Accounts Receivable, and Accounts Payables as of the closing date, even if Controls or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able Systems have paid such debt at a reduced amount prior to agree or on the selection of an accounting firmclosing date. Notwithstanding the foregoing, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 Controls shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” given credit for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included reduction in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determineamount of accounts payable owed to TCF, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than it being acknowledged that set forth in Controls has represented that Controls has previously negotiated a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company reduction in the same proportion that amount due to TCF from the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,0005,843.96 to the amount of $3,500.00, but and that such reduction in the Accounting Firm determines that amount owed to TCF by Controls is contemplated to be documented in writing prior to the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensesclosing date.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
Appears in 1 contract
Sources: Asset Purchase Agreement (Sonic Environmental Systems Inc)
Adjustment to the Purchase Price. (a) Following the Closing Date, the Seller shall prepare or cause to be prepared, at its sole expense, a balance sheet of the Business dated as of the Closing (the "Closing Balance Sheet") setting forth the net book value of the Transferred Assets (excluding amounts for depreciation and amortization expense since April 30, 1999) and the Assumed Liabilities as of the Closing (the "Final Net Assets") determined in accordance with the Seller's Accounting Principles except as set forth on the Corresponding Schedule. The Seller shall deliver the Closing Balance Sheet to the Buyer within 90 days after the Closing.
(b) The Buyer shall review the Proposed Closing Statement within forty-five (45) days following Closing to determine if any adjustments to the Proposed Closing Statement should be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees with the Definitive Closing Statement as adjusted, the Company shall notify Buyer in writing of such disagreement (a “Dispute Notice”) within fifteen (15) days after receipt of the Proposed Closing Statement, which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed to have accepted the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, representatives at the Buyer’s offices 's sole expense shall have the right to observe the work performed by the Seller or its representatives in Las Vegasconnection with the preparation of the Closing Balance Sheet, Nevada, upon advance notice and during normal business hours, shall have the right to any financial information created or examine and make copies of the work papers used in connection with the preparation of the Definitive Closing StatementBalance Sheet; provided, and otherwise shall reasonably cooperate and assist however, that to the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjusted.
(b) If Company and extent such work papers are prepared by outside independent auditors, the Buyer are unable shall have the right to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Periodexamine, then any remaining disputes (and only such remaining disputes) shall be resolved by an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall but not make any other determination. Any determination copies of, such work papers, unless otherwise permitted by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensesapplicable accounting standards.
(c) Company and The Buyer shall revise have 30 days after the Definitive delivery of the Closing Statement Balance Sheet to review the Closing Balance Sheet. If within said 30-day period, the Buyer notifies the Seller in writing that it is unwilling to accept any item(s) on the Closing Balance Sheet, specifically identifying the item(s) and amount(s) in dispute and the calculation basis for such dispute, the Parties shall use their reasonable efforts to reach agreement within the 30 days following the delivery of the Reconciling Adjustment Amount Buyer's notice of dispute, or such longer period as appropriate to reflect the resolution of the objections (as may be agreed upon by Buyer and the Company or Parties, with respect to such disputed item(s). Any items on the Closing Balance Sheet not identified in writing as determined by a disputed item within the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement foregoing 30-day period as provided above shall be deemed to constitute have been accepted by the Definitive Buyer and not subject to any further review or change.
(d) If the Parties fail to reach a mutually agreeable determination with respect to the Closing StatementBalance Sheet within the foregoing 30-day period, which or such longer period as may have been agreed upon, the disputed item(s) shall be finalsubmitted to a partner having relevant expertise and practicing at the Cleveland, conclusive Ohio office of the Independent Accountant for resolution. The Independent Accountant's determination shall be made using the Seller's Accounting Principles, shall be final and binding upon on both Parties, and judgment on such determination may be entered in any court having jurisdiction, in accordance with Section 23.14. The costs and expenses of the Independent Accountant will be paid by the Party against whom the disputed item(s) are resolved, or shall be prorated between the Parties by the Independent Accountant to the extent disputed item(s) are resolved in favor of each Party based on their relative degree of success and shall be paid promptly following the Settlement Date.
(e) The resolution of any disputed item(s) shall be combined with the undisputed items from the Closing Balance Sheet to re-calculate the Closing Balance Sheet. The Parties shall request that such determination by the Independent Accountant be resolved as promptly as possible.
(f) Upon the later of the expiration of the 30-day period referred to above, during which time the Buyer may notify the Seller of any disputed item(s) in the Closing Balance Sheet, or, in the event the Buyer provides the Seller with written notice of disputed item(s) in accordance with the foregoing, the final determination of such disputed item(s), either by agreement of the Parties or a final determination by the Independent Accountant (the "Settlement Date"), the Parties shall make the adjustments, if any, to the Purchase Price provided for in subsections (g) and (h) below. Between the Closing Date and the Settlement Date, the Buyer shall, during regular business hours, afford the Seller and its representatives reasonable access to all Partiesbooks, records, correspondence, files, financial statements, operating data, and all other information with respect to the Business, and shall provide to the Seller and its representatives such operating and financial data and any other information with respect to the Business as it or they may from time to time reasonably request for the purpose(s) of preparing the Closing Balance Sheet and resolving any disputed item(s). The Buyer shall cause the personnel of the Buyer to perform such procedures and measures as are reasonably necessary to prepare the Closing Balance Sheet. The Seller and its representatives shall be provided with offices at the Business and telephones, facilities, office equipment and miscellaneous office supplies, as the Seller reasonably requests subsequent to the Closing Date until the Settlement Date. The Buyer shall make reasonably available during regular business hours the appropriate officers and employees of the Business after the Closing for purposes of the Seller or its representatives interviewing the same in connection with the preparation of the Closing Balance Sheet and resolving any disputed item(s). During the 30-day period following the initial delivery of the Closing Balance Sheet to the Buyer by the Seller, the Seller shall make reasonably available during regular business hours its relevant officers and employees to address questions regarding the preparation of the Closing Balance Sheet.
(g) If the Final Net Assets exceed the net book value of the Transferred Assets and the Assumed Liabilities as of April 30, 1999 as set forth on the April 30 Balance Sheet, the Buyer shall pay to the Seller and/or the Seller Subsidiaries (as may be designated by the Seller) within three business days following the Settlement Date the amount of the excess, with interest on such amount calculated at the Prime Rate (net of any applicable tax withholding) accruing from the Closing through the Settlement Date by wire transfer of immediately available funds to an account or accounts designated in writing to the Buyer by the Seller.
(h) If the Final Net Assets are less than the net book value of the Transferred Assets and the Assumed Liabilities as of April 30, 1999 as set forth on the April 30 Balance Sheet, the Seller shall pay to the Buyer within three business days following the Settlement Date the amount of the deficit, with interest on such amount calculated at the Prime Rate (net of any applicable tax withholding) accruing from the Closing through the Settlement Date by wire transfer of immediately available funds to an account or accounts designated in writing to the Seller by the Buyer.
(i) The Parties agree and acknowledge that the Closing Balance Sheet shall be prepared solely for the purpose of determining the value of the Final Net Assets of the Business and the final
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Adjustment to the Purchase Price. (a) The Buyer shall review the Proposed Closing Statement within forty-five (45) As soon as practicable, but in no event later than 90 days following the Closing to Date, Seller shall determine if any adjustments the Business’ Closing Net Asset Value and Purchaser shall afford Seller or its representatives reasonable access to the Proposed Closing Statement should be made books, records and personnel of the Business for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closingpurpose of making such determination. Buyer Within such 90-day period Seller shall prepare any proposed adjustments along with such information as is necessary for Company deliver to review the proposed adjustments Purchaser a written statement (the “Definitive Closing Net Asset Value Statement”)) setting forth its determination of the Closing Net Asset Value along with the computation of such value. If Purchaser objects to the Company disagrees with the Definitive Closing Statement as adjustedNet Asset Value Statement, the Company such objection shall notify Buyer be made in writing of such disagreement (a “Dispute Notice”) and delivered to Seller within fifteen (15) 15 days after following Purchaser’s receipt of the Proposed Closing Net Asset Value Statement, failing which Dispute Notice such statement shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been be deemed to have been accepted by Purchaser. Any objections that are not resolved between Seller and Purchaser within 15 days following Seller’s receipt of Purchaser’s statement of objections shall be submitted to binding arbitration to be conducted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or such other independent accounting firm as may be mutually agreeable to the Definitive Closing Statementparties and selected within 30 days of the date of the submission of the statement of objections. The fees of the accounting firm shall be divided equally between Purchaser and Seller. Such arbitrating body shall make its determination within 90 days of the date the objections are first submitted for arbitration, which and such determination shall be final, conclusive non-appealable and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to the Company and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with the preparation of the Definitive Closing Statement, and otherwise shall reasonably cooperate and assist the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjustedparties.
(b) If Company and the Buyer are unable Closing Net Asset Value determined pursuant to resolve all Section 1.5(a) is equal to $30,000,000, then there shall be no adjustment to the Purchase Price. If the Closing Net Asset Value determined pursuant to Section 1.5(a) exceeds $30,000,000, then Purchaser shall, within five business days of their the earlier of the date that Purchaser accepts the Closing Net Asset Value Statement or any disputes with respect to the Definitive Closing Net Asset Value Statement within have otherwise been resolved (the Dispute Period“Acceptance Date”), pay Seller in cash the amount of such excess. If the Closing Net Asset Value determined pursuant to Section 1.5(a) is less than $30,000,000, then Seller shall, within five business days of the Acceptance Date, pay Purchaser in cash the amount of such deficiency. Interest shall accrue and be due with respect to any remaining disputes payments due by one party to the other hereunder at the rate of 7% per annum beginning on the Closing Date, and any such payments (and only such remaining disputesincluding any interest accrued thereon) shall be resolved made by bank wire transfer of immediately available funds to an independent regional or national accounting firm selected by the Company and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be account specified in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive and binding upon the Parties, and the Parties agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is by payee to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensespayor.
(c) Company and Buyer shall revise the Definitive Closing Statement and the calculation of the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer and the Company or as determined by the Accounting Firm) and deliver it to each party within five (5) Business Days after the resolution of such objections. Such revised statement shall be deemed to constitute the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties.
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Adjustment to the Purchase Price. (a1) The Buyer Closing Date Financial Statements prepared in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements shall review be delivered by the Proposed Closing Statement Principal Vendors to the Purchaser within forty-five (45) days following the Closing to determine if any adjustments to Date. In connection therewith, the Proposed Closing Statement should be made for any differences between the estimated amounts contained in the Proposed Closing Statement and actual amounts as determined by Buyer after Closing. Buyer Purchaser shall prepare any proposed adjustments along with such information as is necessary for Company to review the proposed adjustments (the “Definitive Closing Statement”). If the Company disagrees co-operate with the Definitive Closing Statement as adjusted, the Company shall notify Buyer Principal Vendors and their representatives in writing of such disagreement (a “Dispute Notice”) within fifteen (15) days after receipt of the Proposed Closing Statement, which Dispute Notice shall specify in reasonable detail the items and amounts in dispute. If the Company does not deliver a Dispute Notice within such fifteen (15) day period, then the Company will have been deemed order to have accepted the Definitive Closing Statement, which shall be final, conclusive and binding upon all Parties. For a period of fifteen (15) days following Company’s receipt of a Dispute Notice (the “Dispute Period”), Representatives of Buyer and the Company shall use their reasonable best efforts to resolve all disagreements with respect to the Definitive Closing Statement set forth in such Dispute Notice through the joint consultation of Buyer and the Company. For purposes of evaluating the adjustments to the Proposed Closing Statement, Buyer shall provide reasonable access to documentation necessary to finalize the Company Closing Date Financial Statements. The fees and its accountants and other Representatives, at the Buyer’s offices in Las Vegas, Nevada, upon advance notice and during normal business hours, to any financial information created or used in connection with disbursements for the preparation of the Definitive Closing Statement, and otherwise Date Financial Statements shall reasonably cooperate and assist be paid by the Company and its accountants and other Representatives to analyze the Definitive Closing Statement as adjustedCompany.
(b2) If Company and the Buyer are unable to resolve all of their disputes with respect to the Definitive Closing Statement within the Dispute Period, then any remaining disputes (and only such remaining disputes) The Purchaser shall be resolved by an independent regional or national accounting firm selected by entitled to review all aspects of the Company preparation of the Closing Date Financial Statements. The Closing Date Financial Statements prepared and Buyer. If Company and Buyer shall not be able to agree on the selection of an accounting firm, the accounting firms used by Company and Buyer shall make such selection in good faith. If they cannot agree on an accountant, the arbitration procedure provided in Section 7.16 delivered as aforesaid shall be used to select the accountant. Such accounting firm shall be the “Accounting Firm” for purposes of this Agreement. Each of Buyer and the Company shall instruct the Accounting Firm to render a determination of the applicable dispute(s) within thirty (30) days after referral of the matter to the Accounting Firm, which determination shall be in writing and shall set forth, in reasonable detail, the basis therefor. The determination of the Accounting Firm shall be conclusive final and binding upon the Partiesparties for all purposes hereof, and unless the Parties agree Purchaser notifies the Principal Vendors in writing that judgment may be entered upon it disputes any amounts shown therein within ten (10) business days after receipt by the determination Purchaser of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The scope of disputes to be resolved by the Accounting Firm shall be limited to whether the items in dispute that were included in the Dispute Notice were prepared in accordance with the Accounting Principles and the Accounting Firm shall determine, on such basis, whether and to what extent the Definitive Closing Statement requires adjustment. The Accounting Firm shall not make any other determination. Any determination by the Accounting Firm regarding any matter other than that set forth in a Dispute Notice as provided herein shall not be binding on the Parties. The Accounting Firm’s decisions shall be based solely on presentations by Buyer and the Company and their respective Representatives, and not by independent review, and the Accounting Firm shall only address those issues in dispute specifically set forth on the Dispute Notice. In resolving any disputed item, the Accounting Firm shall not assign a value to any item that is greater than the greatest value for such item claimed by either Party or that is less than the smallest value for such item claimed by either Party. The Accounting Firm shall have no authority to resolve any other dispute or resolution involving the interpretation, meaning or performance by any Party under any provision of this Agreement or any other agreement entered into in connection therewith. The costs, fees and expenses of the Accounting Firm shall be allocated between Buyer and the Company in the same proportion that the aggregate amount of the disputed items submitted to the Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Accounting Firm) bears to the total amount of such disputed items so submitted. For example, if the Company challenges the calculation of the Proposed Closing Statement by an amount of $100,000, but the Accounting Firm determines that the Company has a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Accounting Firm and Company shall bear the other sixty percent (60%) of such fees and expensesDate Financial Statements.
(c3) Company In the event that the Purchaser disputes any amount shown in the Closing Date Financial Statements, the parties will work expeditiously and Buyer in good faith in an attempt to resolve such disputes within a further period of ten (10) Business Days after the date of notification by the Purchaser to the Principal Vendors of such disputes, failing resolution of which such disputes shall revise be submitted for determination to an independent national firm of chartered accountants mutually agreed by the Definitive Closing Statement Principal Vendors and the calculation of Purchaser (and, failing such agreement between the Reconciling Adjustment Amount as appropriate to reflect the resolution of the objections (as agreed upon by Buyer Principal Vendors and the Company or as determined by the Accounting Firm) and deliver it to each party Purchaser within a further period of five (5) Business Days after Days, such independent national firm of chartered accountants shall be selected by two such national firms, one nominated by each of the resolution Principal Vendors and the Purchaser). The determination of such objectionsthird firm of chartered accountants shall be final and binding upon the parties and not subject to appeal. Such revised statement The third firm of chartered accountants shall be deemed to constitute be acting as experts and not as arbitrators. The costs and expenses of such third firm of chartered accountants shall be borne equally by the Definitive Principal Vendors and the Purchaser. The Principal Vendors and the Purchaser shall each bear their own costs in presenting their cases to such third firm of chartered accountants.
(4) Within two (2) Business Days following the ten (10) Business Day period referred to in Section 2.4 or the resolution of any dispute in accordance with Section 2.4, the amount held in Escrow pursuant to Section 2.3 shall be released to the Principal Vendors and/or the Purchaser, as the case may be, in the manner hereinafter described. In the event that the total of (i) the cash position of the Company at Closing, as reflected on the Closing StatementDate Financial Statements (which for the purposes herein shall include any advances made by the Company to its employees/shareholders to acquire shares of the Company which advances shall be repaid forthwith after Closing), and (ii) the difference between (x) the trade accounts receivable of the Company, determined in accordance with Canadian GAAP (which, for greater certainty, shall not include any income and R&D tax credits or refunds) and (y) the total liabilities of the Company reflected on the Closing Date Financial Statements (which, for greater certainty, shall include all trade payables, all accruals and all short and long term debt but which shall expressly exclude any debt resulting from the payment to the Executives of an amount not exceeding $2,700,000 in satisfaction of the Stock Appreciation Rights Plan and any future income tax liabilities related to R&D tax credits, property, plant and equipment and intangible assets used in the Business) does not exceed $2,000,000.00, after all payments to the Executives in connection with the release of any and all claims they may have against the Company, then the Purchase Price shall be finalreduced by $.4690 for each $1.00 by which the total of (i) plus (ii) of this paragraph (4) is less than $2,000,000.00. The entire amount held in escrow, conclusive or the amount held in escrow less the amount of such reduction of the Purchase Price, as the case may be, shall be released to the Principal Vendors, on a pro rata basis, and binding upon all Partiesan amount equal to the reduction of the Purchase Price, if any, shall be remitted to the Purchaser.
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